Asset Depletion Loans In Weston — The Quick Read: Asset depletion is a non-QM underwriting method that turns verified liquid assets into a monthly qualifying income figure instead of relying on traditional personal-income documentation or pay stubs. A lender divides eligible assets by a set number of months, applies haircuts to certain account types, and runs the result through a standard debt calculation. No liquidation happens. The borrower’s investments stay put, and qualification runs on financial strength instead of reported income.
This matters for anyone whose balance sheet looks nothing like their tax return — retirees living off savings, founders who just sold a company, or self-employed investors whose write-offs erase taxable income on paper.
Key Takeaways
- Asset depletion converts liquid assets into a hypothetical monthly income figure — it does not require selling anything.
- The divisor (the number of months assets get spread across) is the single biggest variable in the math, and it is not standardized across lenders.
- Retirement accounts, brokerage balances, and cash count differently depending on age, account type, and lender.
- Crypto, business accounts, and unvested equity are excluded by nearly every program.
- Fannie Mae’s version of this concept is narrow and off-limits for investment property, which is exactly why non-QM asset-based programs exist for rental buyers.
Key Terms Defined
Asset depletion (asset utilization): an underwriting method that spreads a borrower’s eligible liquid assets across a set number of months to produce a monthly income figure used in a normal debt-to-income calculation.
Haircut: the percentage a lender subtracts from an account balance before counting it. A 30% haircut on a brokerage account means only 70 cents of every dollar shows up in the math.
Divisor: the number of months a lender divides eligible assets by. Shorter divisors produce larger qualifying income; longer divisors produce smaller qualifying income.
Assets-only qualification: a different structure entirely, with no income or debt-to-income calculation at all. The borrower simply needs liquid assets equal to the loan amount plus closing costs.
Net qualifying assets: the pool left over after down payment, closing costs, and required reserves are carved out of total assets — this is the number that actually gets divided.
How Underwriting Turns Assets Into Income
The process is mechanical, and it runs in the same order almost every time. First comes the asset inventory: every liquid account, current balance, and whether it’s a retirement account or a taxable one. Age matters here too, since penalty-free withdrawal age changes how a retirement balance gets treated.
Second, haircuts get applied. Volatile or restricted asset types lose value in the math before the divisor ever touches them. Third, funds already earmarked for the deal — down payment, closing costs, required reserves — come out of the total. What’s left is the net qualifying pool.
Fourth, that pool gets divided by the program’s divisor. This is where files diverge the most. A shorter divisor produces a meaningfully larger monthly income figure than a longer one, which is why an investor comparing two lenders can get two very different qualifying outcomes from the identical bank statement. Fifth, the resulting figure runs through a standard debt-to-income calculation like any other income source. Sixth, underwriting and closing proceed normally — nothing gets liquidated, and nothing gets withdrawn. As one industry explainer puts it, the borrower demonstrates that assets could support the payment over time, not that they will actually be spent.
Underwriters also weigh asset quality, not just size. A pool that’s been sitting in the same accounts for months looks stronger than one assembled the week before application. Large recent deposits without clean sourcing tend to slow a file down or get excluded from the count entirely.
The Programs and Structures That Exist
Not every asset-based path works the same way, and conflating them is one of the more common investor mistakes. Two distinct structures show up across non-QM lending, and they solve different problems.
Asset allowance is the supplemental version. It divides liquid assets by a set number of months and adds that figure to the file’s overall income picture, or uses it as the sole qualifying income depending on the situation. Across the wholesale programs Lendmire places files with, this typically runs on a 36-month divisor when used to supplement other income and the borrower’s overall debt-to-income sits at or below 60%, a 60-month divisor when supplementing income above that debt-to-income level, or an 84-month divisor when the asset allowance stands alone as the sole qualifying income, or on any loan size above $3,500,000. This path is generally limited to primary and second homes, with LTV capped around 80% on most files, subject to lender guidelines.
Assets-only qualification skips the income calculation entirely. There’s no debt-to-income ratio to satisfy. Instead, the borrower needs U.S.-based liquid assets equal to the loan amount, plus closing costs, plus an offset for any net loss carried by other owned residential real estate. It’s a blunter tool, built for borrowers whose liquidity is simply overwhelming relative to the loan size.
Size range matters here too. Across the wholesale network Lendmire works with, loan amounts on these high-net-worth programs run from $300,000 up to $30,000,000, split across two separate ladders — a portfolio non-QM program that carries files to roughly $6,000,000, and a bank portfolio program built around twelve-month statement history that carries its own leverage schedule out to $30,000,000, stepping down from 65% at the lower end of that range to 55% at the top. Above $4,000,000, every file across these programs gets reviewed case by case before submission — there’s no flat “up to” figure that applies uniformly at that size.
Credit and reserve requirements track loan size, too. Minimum credit scores run around a 660 floor on the portfolio program and a 680 floor on the bank program, with a 700 floor once loan size crosses into super-jumbo territory. Reserve requirements scale from roughly three months of payments on smaller loans up to nine months or more on larger ones, plus additional months for each other financed property in the portfolio. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Where the General Rule Breaks
The formula sounds clean until real asset composition gets involved. Several edge cases change the math meaningfully.
Retirement account age. Age 59½ is the pivot point almost everywhere. Retirement accounts typically count at a reduced rate — around 70% of value — before that age, moving to a fuller 80% counted value once the borrower clears it. Fannie Mae’s own version of this concept, filed under Selling Guide topic B3-3.4-06, uses a stricter access test instead of a simple haircut: the borrower must have an unqualified, unlimited right to withdraw the entire balance at the time of calculation. A penalty doesn’t disqualify the account under that test — it just gets subtracted from the total (Fannie Mae Selling Guide).
Ineligible assets. Cryptocurrency, business-held accounts, unvested equity, and gift funds are excluded across nearly every program surveyed. Crypto specifically usually needs to be converted to cash and seasoned in a U.S. account for a stretch of time before it counts at all — a straight balance-sheet entry rarely works (Zeitro). Across the guidelines Lendmire works with, business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward the qualifying pool.
The business-ownership misconception. Owning 100% of a profitable company does not automatically create depletable personal wealth. Cash inside the business isn’t personal liquidity, and equity in a privately held company isn’t liquid. This trips up more high-net-worth borrowers than any other single misunderstanding on the asset-depletion path.
Double-counting. An account generating depletion income generally can’t also get separate credit for its interest or dividend income. Pick one use for the balance, not both.
Agency-to-agency divergence. Even the government-sponsored enterprises don’t agree with each other. Fannie Mae’s rule reaches only employment-related assets like severance or an accessible retirement account, while other agency guidance reaches a broader set of accumulated assets, including ordinary depository and brokerage accounts. The same balance sheet can produce two different qualifying outcomes depending on which agency framework — or which non-QM program — reviews it. That’s the core regulatory backdrop for why this space isn’t standardized: the CFPB’s Ability-to-Repay and Qualified Mortgage rule requires lenders to make a good-faith determination of repayment ability using several factors, including assets, but it doesn’t dictate one universal formula for how assets get converted into income.
Investment property is where the general rule really breaks. Fannie Mae’s asset-depletion path is explicitly off-limits for investment property — it only applies to primary and second homes. That gap is exactly why non-QM asset-based programs and DSCR loans exist for rental buyers. DSCR financing qualifies primarily on the property’s own rental income covering the payment, subject to lender guidelines, rather than on the borrower’s personal balance sheet at all — a fundamentally different tool solving a different problem. Some lenders in Lendmire’s network will layer an asset-based income equivalent onto a DSCR file that’s shy of full coverage, using assets to offset a shortfall rather than to qualify a purchase outright. Sub-1.00 coverage structures are available through select lenders in that network, though leverage and terms adjust when coverage sits below that threshold, and no-ratio qualification isn’t part of that offering. Investors weighing the two paths can review the differences between a DSCR loan and an asset depletion loan before deciding which one actually fits their file.
The Investor Decision: When This Beats the Alternatives
Picture an investor with a substantial brokerage account and a retirement portfolio, but a tax return that shows almost nothing after depreciation and business write-offs. Traditional underwriting looks at that return and sees a weak file. Asset depletion looks at the balance sheet instead and sees a strong one. The tradeoff investors should weigh honestly: shorter divisors and broader eligible-asset lists in non-QM programs generate more qualifying income than a longer agency-style divisor would, but that income comes from a non-QM instrument, with documentation depth and lender-specific overlays that differ from one wholesale program to the next. There’s no single formula an investor can assume applies across the board.
In practice, files move faster when assets have been sitting in the same accounts for months rather than assembled right before application, when large deposits have clean sourcing, and when the borrower isn’t leaning on excluded categories like crypto or unvested equity to hit a number. Founders who’ve recently sold a business sometimes assume the sale proceeds count immediately — they generally do, once the cash lands and seasons in a personal account, but pending or structured sales are a different conversation entirely.
For investors specifically eyeing rental property rather than a primary residence, the asset-based conversation often runs parallel to a DSCR conversation, not instead of it. Reviewing Lendmire’s complete DSCR loans guide is a reasonable starting point for understanding how property-level qualification compares to asset-level qualification, and how the two sometimes combine on a single file. For a look at how asset-rich buyers structure these deals in other high-value markets, Lendmire’s coverage of asset depletion financing in Sarasota walks through a similar borrower profile in more depth.
Tax treatment can depend on how 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’re asset-rich but income-light on paper and want to see whether an asset-based path or a DSCR structure fits your situation better, Lendmire can help compare options based on your assets, credit profile, leverage needs, and property goals. Reach out through Lendmire’s quote request to start that conversation.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion?
No. It’s a paper calculation used to establish debt-to-income, not a withdrawal requirement. The portfolio stays intact and keeps growing while the loan closes.
Does owning a profitable business give me depletable assets?
Not directly. Cash sitting inside a company you own isn’t personal liquidity, and equity in a private business isn’t liquid. Only cash that’s actually landed in your personal accounts counts toward the pool.
Can I use retirement accounts before age 59½?
Often, yes, but usually at a reduced counted value compared to accounts past that age. The exact treatment depends on the lender and the account type, so it’s worth confirming before assuming a specific number will count.
Can asset depletion work for a rental property purchase?
Generally not through the narrow agency version, which is restricted to primary and second homes. Investment property buyers typically look at DSCR financing instead, or a non-QM structure where asset-based income offsets a coverage shortfall on the property.
Is there one standard divisor every lender uses?
No. Divisors vary meaningfully across non-QM programs, and even government-sponsored enterprise guidance differs from one agency to another. Treating any single number as the industry standard is a common and costly assumption.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 40 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Selling Guide — B3-3.4-06, Employment Related Assets as Qualifying Income
2. Zeitro — Using Asset Depletion Income for a Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.
