Asset Depletion Mortgage LTV By Occupancy And Loan Tier — The Quick Read: Leverage on an asset depletion mortgage depends on two things at once: what you’re buying (primary, second home, or investment property) and how big the loan is. Through select lenders in Lendmire’s wholesale network, asset-based qualification paths typically max out at 80% loan-to-value on primary and second homes, with investment property handled through a different structure. Bigger loans compress every number — leverage, credit floor, and reserves all tighten as the balance climbs past the $2 million and $4 million marks.
There’s no single published table for this anywhere in the industry. Each lender sets its own divisor, its own asset haircuts, and its own LTV ceiling by occupancy. That’s the gap this article fills.
Key Terms Defined
Asset depletion (asset allowance): a qualification method that converts liquid assets into monthly income by dividing the asset total by a set number of months, instead of using pay stubs or traditional personal-income documentation.
Divisor: the number of months a lender divides your qualifying assets by. A shorter divisor produces more monthly income on paper; a longer divisor produces less.
Assets-only qualification: a path with no debt-to-income calculation at all, where the borrower simply proves enough liquid U.S. assets to cover the loan amount, closing costs, and a set number of months of any net loss on other owned property.
Occupancy: whether the property will be the borrower’s primary residence, a second home, or a non-owner-occupied investment property. This single variable does more to move LTV than almost anything else in the file.
Loan tier: the size band the loan falls into. Leverage steps down as the tier climbs, and above roughly $4 million, files move to case-by-case review rather than a published ceiling.
How The Math Actually Runs
Every asset-based file follows the same steps, no matter the lender. First, count the eligible assets. Then apply a haircut based on the asset type. Next, subtract what’s needed for the transaction. Finally, divide by the program’s divisor to get monthly qualifying income. That imputed income then works like a standard income input. This is similar to how a DSCR loan is reviewed mainly on property-level rental income covering the payment, subject to lender guidelines. The figure still has to meet the lender’s underwriting standards — it doesn’t skip them.
Retirement accounts get discounted more than cash or brokerage holdings across the industry, and access rules matter here too. Fannie Mae’s B3-3.4-06 guideline requires the borrower to have an unqualified, unlimited right to withdraw funds before a retirement account can count at all. This access test shows up in some form across the non-QM market too, not just in agency lending.
Through select lenders in Lendmire’s wholesale network, retirement accounts count at 70% of value, rising to 80% once the borrower is 59.5 or older. Business funds, gift funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward the depletion calculation on these programs. That last exclusion catches a lot of high-net-worth borrowers by surprise — a large crypto position simply doesn’t move the needle on qualifying income, no matter how liquid it feels.
Three Divisor Options, Not One
The divisor is the single variable that changes the outcome the most. A shorter divisor produces more monthly income from the same asset pool; a longer one produces less. Market surveys report divisors ranging anywhere from 60 months to 360 months depending on the lender and program type — that’s a six-fold spread on identical assets. Through select lenders in Lendmire’s wholesale network, the asset allowance path runs on three specific divisors:
| Path | Divisor | Max LTV | Eligible occupancy |
|---|---|---|---|
| Allowance, supplemental, DTI ≤60% | 36 months | 80% | Primary, second home |
| Allowance, supplemental, DTI >60% | 60 months | 80% | Primary, second home |
| Allowance, standalone or loan >$3.5M | 84 months | 80% | Primary, second home |
| Assets-only, no DTI calculated | N/A — dollar match | Varies by tier | Primary, second, investment |
The 36-month divisor is the one worth knowing about if the rest of the file is strong. It only applies when the borrower’s overall debt-to-income, including the imputed asset income, sits at or below 60% — meaning the asset math is doing supplemental work, not carrying the whole file. Once DTI runs higher than that, or the loan itself passes $3,500,000, the divisor stretches to 60 or 84 months and the qualifying income shrinks accordingly.
Assets-only skips the ratio question entirely. The borrower needs liquid U.S. assets equal to the loan amount, plus closing costs, plus sixty months of any net loss carried on other owned residential property. No income is calculated because none is needed — the file is reviewed on liquidity alone.
LTV By Occupancy: Why Investment Property Isn’t Just “A Few Points Lower”
Primary residences get the most flexibility, second homes get a bit less, and investment property has the tightest rules of the three. But the gap between them isn’t the same at every price point — it grows as the loan size grows. Both federal agency programs leave out non-owner-occupied property from asset-based qualification entirely. A Homebuyer.com breakdown of Freddie Mac’s Guide Section 5307.1 explains this. It notes that eligibility covers only purchase loans, no-cash-out refinances, and Freddie’s Enhanced Relief Refinance. Cash-out refinances are excluded outright, because they reduce the very assets being counted.
That agency gap is exactly the space non-QM asset depletion was built to fill. Through select lenders in Lendmire’s wholesale network, the standard asset allowance path stays limited to primary and second homes at 80% maximum LTV. Investment property asset-based qualification works differently and is reviewed on a file-by-file basis. In this network, the assets-only path is the only one that reaches non-owner-occupied collateral at all. This matters for investors who assume “asset depletion” means one single product — it doesn’t. Occupancy decides which door you walk through, even before loan size enters the conversation.
LTV By Loan Tier: Where Leverage Compresses
Leverage doesn’t step down evenly. It compresses fastest right around the $2 million and $4 million marks, and above $4 million every file moves to case-by-case review before submission. This holds true across occupancy types, though investment property and second homes trail primary residence by roughly five points at most sizes.
| Loan tier | Primary purchase | Second home purchase | Investment purchase |
|---|---|---|---|
| $300K–$1M | 90% | 85% | 85% |
| $1.5M–$2M | 85% | 80% | 80% |
| $3M–$3.5M | 75% | 65% | 60% |
| $4M–$5M (case-by-case) | 65% | 65% | 65% |
| $10M–$20M | 55% | 50% | 50% |
Notice the $3M–$3.5M row: primary residence purchase holds at 75%, while investment property drops all the way to 60%. That’s not a rounding difference — it’s a fifteen-point gap on the same loan tier, driven entirely by occupancy. Above $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property, additional overlays apply: a 700 credit floor, a clean 0x30x24 housing history, 48-month seasoning on any credit event, and a ten-acre property limit. Cash-out proceeds can’t be used to satisfy reserve requirements at this level either. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Some borrowers must decide whether to structure a large purchase as a second home or a straight investment property. For them, it’s worth checking the leverage gap between these two occupancy types. Lendmire’s occupancy-specific LTV breakdown covers this in detail — take a look before you lock in a purchase contract.
Where The General Rule Breaks
A few edge cases don’t follow the pattern above, and missing them is where files get delayed.
Business-purpose review changes the frame entirely. Investment property loans are treated as business-purpose transactions, which is a different regulatory category from an owner-occupied mortgage — they’re underwritten with that framing in mind, not as consumer lending.
Reserves scale with size, not just occupancy. Through select lenders in Lendmire’s wholesale network, reserve requirements run 3 months of payments up to $500,000, 6 months up to $1,500,000, and 9 months above that — plus 2 additional months for each other financed property, capped at 12 months. First-time investors need 12 months regardless of loan size. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Cash-out on an asset-qualified file is limited. The portfolio program caps cash-in-hand proceeds at $1,500,000 above 60% LTV, and cash-out proceeds cannot be counted toward meeting reserve requirements on super-jumbo files. Investors planning a cash-out strategy should look at qualifying primarily through property income rather than assets — the complete DSCR loans guide covers how that qualification path works and where it fits alongside asset-based programs. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Property type carries its own ceiling, separate from occupancy. Warrantable condos go to 85%, non-warrantable condos to 80%, condotels to 75% on purchase and 65% on cash-out, and rural property caps at 80% on ten acres or less and never above $3,000,000 regardless of occupancy or asset strength.
Files with stable, seasoned assets move through underwriting with far fewer conditions. This means the funds have sat in the same accounts for months, not just arrived the week of application. Files with fresh, unexplained deposits face more scrutiny. This isn’t just a technicality: a large deposit that landed the month before application usually needs full sourcing before it counts at all. This documentation gap is the most common reason an asset-qualified file stalls in underwriting.
What The Decision Actually Looks Like
Picture an investor with a strong liquid portfolio and a second home purchase in the $1.5M–$2M tier. On the network’s ladder, that lands at 80% purchase leverage, with the asset allowance path available at up to 80% LTV using either the 36-month or 60-month divisor depending on where the overall file’s debt-to-income lands. If the borrower’s DTI including the imputed asset income comes in at 55%, the 36-month divisor applies and produces the stronger qualifying-income figure — meaningfully better than the same assets run through 60 or 84 months. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Now shift the same borrower into an investment property purchase at the same price point. Leverage stays at 80% at that tier too, but the standard asset allowance path doesn’t reach non-owner-occupied property at all in this network — the file would need to route through the assets-only structure or qualify on the property’s own rental income instead. That’s often where an asset-depletion-versus-DSCR comparison becomes the more useful question than the LTV table alone: does the property’s rent cover the payment on its own, or does the borrower’s balance sheet need to carry the file?
DSCR loans qualify mainly on property-level rental income that covers the payment, subject to lender guidelines. For an investment property that already cash-flows, this is often the simpler path. It also avoids the occupancy restrictions built into most asset-based programs. Asset depletion works well as a backup option. When the rent roll falls short, a documented balance sheet can save a deal that wouldn’t otherwise pass underwriting on rental income alone.
Frequently Asked Questions
Does a bigger down payment offset the loan-tier compression?
Not entirely. Leverage ceilings by tier are set regardless of how much cash a borrower brings beyond the minimum — a $5 million purchase reviewed case-by-case doesn’t return to 80% just because the borrower puts more down than required. The tier ceiling reflects loan size and risk, not just available cash.
Can retirement assets alone qualify a file?
Yes, but at a discount. Retirement accounts count at 70% of value through select lenders in this network, rising to 80% once the borrower reaches 59.5. A file relying heavily on retirement assets alone will show meaningfully less qualifying income than one built on cash or brokerage holdings at full value.
Why do agency asset programs exclude investment property but non-QM sometimes reaches it?
Agency programs, including Freddie Mac’s Guide Chapter 5307, were built around owner-occupied qualification and explicitly restrict eligible occupancy and loan purpose. Non-QM programs were designed with more flexibility, though even within non-QM, investment property asset-based qualification typically runs through a narrower structure than the primary-and-second-home allowance path.
Is there a minimum asset amount required across the board?
No universal figure exists industry-wide, and minimum thresholds vary meaningfully by lender and program. Through select lenders in Lendmire’s wholesale network, the assets-only path requires liquid assets equal to the loan amount plus closing costs plus sixty months of any net loss on other owned residential property — a file-specific calculation, not a flat number.
Does asset depletion work for a cash-out refinance?
It’s more limited than a purchase. Agency asset-based programs exclude cash-out refinancing entirely, and on the wholesale non-QM side, cash-out proceeds are capped and can’t be used to satisfy reserve requirements on larger files. Investors focused on pulling equity out of a rental property often find Lendmire’s cash-out refinance guidance — wait, that’s outside budget — more relevant to review before assuming an asset-based path will cover a cash-out goal. (Note: consult Lendmire directly for cash-out structuring on asset-qualified files.)
Are you trying to decide between an asset-based loan and a property-income loan for your purchase or refinance? Lendmire can help you compare the options. We’ll look at leverage, occupancy, and loan size based on your actual balance sheet and the property in question.
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
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 40 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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References
1. Fannie Mae Selling Guide B3-3.4-06 — Employment-Related Assets as Qualifying Income
2. Homebuyer.com — Freddie Mac 5307.1 Guidelines: Assets as a Basis for Repayment of Obligations
3. Freddie Mac Single-Family Seller/Servicer Guide, Chapter 5307
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.
