Asset Depletion Loans In Martha’s Vineyard — The Quick Read: These loans let a lender turn your liquid savings, brokerage accounts, and retirement funds into a monthly qualifying income number, instead of relying on pay stubs or traditional personal-income documentation. Nothing has to be withdrawn or sold — it’s a math exercise, not a withdrawal plan. Buyers in vacation and second-home markets, where wealth often sits in investments rather than a paycheck, are the exact profile this product was built for. The mechanics, the divisor a lender uses, and the leverage you get all shift depending on the size of the loan and whether the property is a primary residence, second home, or rental.
Key Terms Defined
Asset depletion (or asset dissipation): an underwriting method that divides your verified liquid assets by a set number of months to produce a monthly income figure for qualifying purposes.
DTI (debt-to-income ratio): the percentage of your monthly gross income — real or imputed — that goes toward debt payments, including the new mortgage.
Haircut: a discount a lender applies to certain asset types before counting them, because retirement funds or stocks carry more volatility or tax exposure than cash sitting in a checking account.
Business-purpose loan: a loan made for an investment or rental property rather than personal use — these are underwritten on the property’s income, not the borrower’s.
DSCR (debt-service coverage ratio): a business-purpose loan structure that qualifies a rental property based on whether its rent covers its own payment, without touching the owner’s personal income or assets at all.
What Is an Asset Depletion Loan, Actually?
An asset depletion loan is reviewed around what you own, not what you earn on paper. It exists because plenty of financially strong buyers — retirees, founders between liquidity events, trust beneficiaries, investors living off portfolio income — show thin income on a tax return despite sitting on a large net worth.
The loan itself looks like a normal mortgage. Same closing process, same title work, same appraisal. The only thing that’s different is how the lender calculates your qualifying income line. Instead of pulling that number from a W-2 or a Schedule C, the lender pulls it from your bank and brokerage statements.
This isn’t a return to the “stated income” products that helped sink the market before the last downturn. Every dollar counted has to be verified and documented — statements, account ownership, sourcing. Verified assets, run through a documented formula, are a completely different animal from an unverified claim on an application.
How the Calculation Actually Works, Step by Step
The math is simple once you see it. It runs on five steps, and the same five steps apply whether the loan is $400,000 or $8 million.
Step 1 — Identify what counts. Checking, savings, money-market funds, CDs, brokerage accounts, and vested retirement balances are the usual eligible pool. Real estate equity, unvested stock, cryptocurrency, business-owned cash, and funds from a trust other than a revocable living trust generally don’t count toward the calculation — they’re either illiquid, restricted, or too hard to verify cleanly.
Step 2 — Apply the haircut. Cash counts close to full value. Retirement accounts are typically discounted — across the programs I place files with, that discount usually lands around 70% of the balance, stepping up closer to 80% once the account holder is past 59½, since early-withdrawal penalties stop being a factor at that age.
Step 3 — Subtract what’s already spoken for. Down payment, closing costs, and any required post-close reserves come off the top before the math runs. A lender doesn’t want the same dollar functioning as both your source of funds and your source of income.
Step 4 — Divide by the depletion period. This is the number that decides everything, and it’s entirely program-specific. Across the wholesale network I work with, the asset allowance calculation divides your remaining eligible liquidity by 36 months when it’s supplementing other income and your overall debt load sits at or below 60% DTI, 60 months when it’s supplementing income above that DTI threshold, or 84 months when the asset calculation is standing on its own — or on any loan above $3,500,000 regardless of what else is going on in the file. A shorter divisor produces a bigger monthly number; a longer one produces a smaller, more conservative figure. There’s no regulatory standard divisor in this corner of lending — every investor sets its own.
Step 5 — Underwrite everything else normally. Credit, reserves, occupancy, and property type get reviewed on top of the depletion figure, not instead of it. This is a full-documentation loan wearing a different income calculation, not a shortcut around underwriting.
One mechanical point trips up almost every borrower hearing about this for the first time: nothing has to leave the account. The formula is arithmetic, not a withdrawal schedule. The lender confirms the balance exists and is accessible to you, then does the division. Your portfolio stays exactly where it is.
The Structures and Variations You’ll Actually Run Into
Not every asset-based file uses the same structure, and knowing the difference matters before you start collecting statements. The Consumer Financial Protection Bureau has been explicit on this point: loans where a lender doesn’t actually verify income or assets can’t meet the government’s ability-to-repay standard, full stop.
Asset allowance (supplemental). This is the most common version — liquid assets, run through the 36- or 60-month divisor depending on your overall DTI, get added on top of any other qualifying income you already have. In the network I work in, this path applies to primary residences and second homes, generally maxing out around 80% loan-to-value.
Asset allowance (standalone). Same math, longer divisor — 84 months — used when the asset calculation is the only income source in the file, or automatically on any loan above $3,500,000 regardless of what else is documented.
Assets-only, no DTI calculated at all. This is the deepest end of the pool. Instead of converting assets into a monthly figure and running a debt ratio, the file is reviewed on pure liquidity: your U.S.-based liquid assets need to equal the loan amount, plus closing costs, plus sixty months of any net loss on other residential real estate you own. No ratio gets calculated, because there’s nothing to divide against — the liquidity itself is the qualification.
Where this sits on the size ladder. These programs run from roughly $300,000 up through $30,000,000, split across two separate wholesale channels. One portfolio program carries files to $6,000,000. A second bank-portfolio program, built around twelve months of statements, takes over the larger end of the ladder with its own leverage bands — 65% loan-to-value to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% LTV or the band’s ceiling, whichever is lower. Above $4,000,000, every file gets reviewed case by case before it’s even submitted — there’s no flat “up to” figure that applies uniformly at that size. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Leverage steps down as the loan gets bigger. On a primary residence, you’ll typically see 90% loan-to-value on smaller loans, stepping down to 85% around the $1-2 million mark, 80% near $3 million, and down to roughly 75% at the top of the standard credit tier before the deal works into case-by-case review territory. Second homes and investment properties generally run about five points lower than primary-residence numbers at every size band — worth keeping in mind if you’re weighing a Vineyard-style vacation purchase against a straight rental buy.
Where the General Rule Breaks: Five Edge Cases
The divisor swings the outcome more than anything else in the file. Two borrowers with identical account balances can qualify for very different loan amounts depending on whether their lender’s program uses a 36-month, 60-month, or 84-month divisor. There’s no industry-standard number — this is the single detail worth asking about before you pick a lender.
Those produce much smaller monthly figures than the non-QM versions described above. If a borrower hears “asset depletion” from a conventional lender and from a non-QM broker in the same week, they’re hearing about two structurally different calculations, not two prices on the same product.
Joint accounts get divided, not assumed. If an account is held jointly with someone who isn’t on the loan, the lender typically needs written permission confirming the borrower can access the full balance — otherwise the usable amount gets split proportionally among account holders, which can quietly shrink your coverage figure.
Business-purpose loans skip this calculation entirely. DSCR loans are designed for non-owner-occupied investment properties. Because they’re business-purpose investor loans, they’re reviewed differently from a standard owner-occupied mortgage — the property’s own rental income drives lender review, and none of the asset-depletion math applies. Trade coverage has tracked this shift directly: DSCR is now one of the larger slices of the broader non-QM securitization market, alongside standard bank-statement and asset-utilization loans (Scotsman Guide). If you’re buying a property purely as a rental, DSCR — covered in Lendmire’s complete DSCR loans guide — is usually the more direct path than trying to run your personal portfolio through an asset calculation.
Real estate equity never counts. The formula needs liquid, spendable assets. Sitting on substantial home equity doesn’t help this calculation at all — a cash-out refinance or a DSCR-based purchase is the right tool for putting that equity to work instead.
Asset Depletion vs. DSCR: Which One Actually Fits Your Deal?
If the property is a pure rental, DSCR usually wins on simplicity — it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and skips the personal-asset math altogether. If the property is a personal or seasonal second home and your income doesn’t reflect your actual net worth, asset depletion is the tool built for exactly that gap.
| Factor | Asset Depletion | DSCR |
|---|---|---|
| Reviewed on | Borrower’s liquid assets | Property’s rental income |
| Occupancy fit | Primary residence, second home | Non-owner-occupied investment property |
| Personal income needed | No — assets substitute | No — rent substitutes |
| Best borrower profile | Retiree, high-net-worth, thin tax-return income | Landlord or rental investor |
A retiree buying a personal vacation property with a seven-figure brokerage balance and modest reported income is a textbook asset-depletion file. An investor buying the same style of property purely to rent it out is a textbook DSCR file. The two products solve different problems, and mixing them up wastes documentation effort on the wrong path. For a side-by-side breakdown of how the two calculations actually diverge, Lendmire’s DSCR loan vs. asset depletion loan comparison walks through it in more depth.
What Documentation Actually Looks Like
Expect to hand over recent statements for every account you’re counting — typically the most recent one to two statement cycles, plus proof of ownership if an account is titled jointly or through a trust. Credit floors on these programs generally start around 660 on the portfolio-size product, stepping up to 700 once loan size crosses into super-jumbo territory. Reserve requirements scale with loan size too — commonly three months of payments on smaller loans, six months in the mid-range, and nine months or more once the loan gets larger, plus additional reserves for each other financed property you own. Debt-to-income, where it’s calculated at all, typically runs up to 50% on most files.
Across the files I see move through this corner of non-QM, the documentation burden isn’t heavier than a standard mortgage — it’s just different. Statements replace pay stubs, and account verification replaces employer verification. Borrowers who keep clean, consolidated accounts (rather than money scattered across a dozen small holdings) tend to move through underwriting with far less back-and-forth.
The Investor Decision in Practice
Run the math before you assume anything about eligibility. Add up your liquid, eligible assets, apply a rough haircut on retirement and brokerage holdings, subtract what you’ll need for down payment and reserves, and divide by whichever timeframe your lender’s program uses. That number — not your tax return — is what a lender will actually be looking at.
If you’re weighing a personal second home against a rental purchase, decide that first. It changes everything downstream: which product applies, what leverage you’ll see, and what documentation gets collected. A seasonal or vacation-market buyer with a strong balance sheet and light reported income is squarely in asset-depletion territory. An investor chasing rental cash flow belongs in a DSCR conversation instead.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
If you are buying or refinancing a property and want to see how the numbers work for your situation, Lendmire can help you compare asset-based and DSCR loan options based on your assets, credit profile, leverage, and goals.
For deeper background on the mechanics discussed here, see Doss Law, PC – Business Purpose Exemption Simplified.
Frequently Asked Questions
Do I have to actually withdraw money from my accounts to use asset depletion?
No. The calculation is arithmetic used to produce a qualifying income figure — it doesn’t require moving, spending, or liquidating anything. The lender verifies the balance exists and is accessible, then divides it by the program’s timeframe.
Can I use my 401(k) or IRA for this calculation?
Generally yes, though retirement accounts usually get discounted before they’re counted — commonly around 70% of the balance, stepping up closer to 80% once you’re past 59½. Program rules vary, so the exact treatment depends on the lender and your account type.
Is asset depletion the same thing as a no-income-verification loan?
No. Every dollar counted has to be documented and verified through statements — the calculation replaces the income line, not the verification requirement. Loans with no verification of income or assets don’t meet current ability-to-repay standards.
Why would a rental property investor use DSCR instead of asset depletion?
Because DSCR skips the personal-finance question entirely. It is reviewed on whether the property’s rent covers its own payment, which is usually faster to document than pulling together months of personal and investment account statements.
Does a bigger loan mean I get less leverage on an asset-depletion loan?
Generally yes. Leverage typically steps down as loan size increases, and loans above roughly $4,000,000 are reviewed case by case rather than against a flat published maximum. Exact terms depend on credit profile, property type, and occupancy.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 40 markets — 39 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide – Alternative lending offers new pools for lenders to wade in
2. Doss Law, PC – Business Purpose Exemption Simplified
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.
