Asset Depletion Mortgage Requirements For High-net-worth Borrowers — The Quick Read: Asset depletion underwriting turns liquid assets — cash, brokerage holdings, retirement accounts — into a monthly qualifying-income figure instead of relying on traditional personal-income documentation. Lenders subtract funds needed for the down payment, closing costs, and reserves, then divide what’s left by a set number of months. The result gets added to any other documented income and run through a standard debt-to-income calculation.
This method exists because traditional personal-income documents often understate what a wealthy borrower can really afford. A founder who just sold a company, a retiree living off a portfolio, or a real estate investor claiming heavy depreciation can look thin on paper. Yet they may sit on millions in liquid assets. Asset depletion — sometimes called asset dissipation or asset amortization — gives these borrowers a way to qualify without selling anything.
What Counts as an Eligible Asset?
Cash, brokerage accounts, and retirement funds generally qualify; business assets, gifts, most trusts, unvested stock, and cryptocurrency generally do not. The specifics matter more than the general rule, because different asset classes get treated differently once the math starts.
Across the wholesale programs Lendmire’s network works with, retirement accounts count at 70% of value for borrowers under 59½ and 80% for borrowers 59½ or older. That split isn’t arbitrary — it tracks the IRS rule that early withdrawals before age 59½ trigger regular income tax plus a 10% additional penalty, with narrow exceptions. Money that costs a penalty to access is worth less to an underwriter than money that doesn’t, so the discount reflects real friction, not guesswork.
Business funds, gifted money, most trust assets (a revocable living trust is the exception), unvested stock, and cryptocurrency never count in this network’s programs. If most of a borrower’s net worth sits in one of those buckets, asset depletion probably isn’t the right tool — a different qualification path, or a combination of paths, makes more sense.
How Does the Depletion Math Actually Work?
Eligible assets are counted, discounted by class, reduced by funds earmarked for the deal, then divided by a set number of months to produce a monthly income figure. That figure gets added to any other documented income before the lender runs a debt-to-income calculation.
There are two distinct asset-based paths in the programs Lendmire’s network places files with, and they work differently:
Asset allowance divides liquid assets by 36 months when used as supplemental income with debt-to-income at or below 60%, by 60 months when supplemental with DTI above 60%, or by 84 months when it’s the standalone qualifying method or the loan sits above $3,500,000. This path applies to primary and second homes only, capped at 80% loan-to-value.
Assets-only qualifies with no DTI calculation at all — but it requires U.S. liquid assets equal to the full loan amount, plus closing costs, plus 60 months of any net loss on other residential property the borrower owns. This is the path for someone who wants zero income calculation in the file, at the cost of needing significantly more liquidity parked and verified.
The Office of the Comptroller of the Currency (OCC) supervises national banks. It describes this method as turning assets into “a hypothetical cash annuity stream, which is added to the applicant’s other income when evaluating the applicant’s ability to make mortgage payments.” This language comes from its formal 2019 bulletin on asset dissipation underwriting. The OCC is clear about who this helps: borrowers with significant liquid assets who “do not have sufficient cash flow to qualify for a mortgage under standard income attribution criteria.”
One point worth repeating because it trips people up constantly: the borrower is never required to actually spend the assets down. The depletion figure is imputed for qualification purposes. Nobody drains a brokerage account to close a loan.
Key Terms Defined
Asset dissipation underwriting — a qualification method that converts a borrower’s liquid assets into a hypothetical monthly income figure instead of using W-2 or tax-return income.
Depletion period (divisor) — the number of months a lender divides an asset balance by to produce the monthly qualifying-income figure; in the programs Lendmire’s network places files with, this runs 36, 60, or 84 months depending on structure and loan size.
Asset allowance — a supplemental or standalone qualification path where discounted liquid assets, after subtracting transaction costs, get divided by the applicable depletion period.
Assets-only qualification — a no-DTI path requiring liquid U.S. assets equal to the loan amount plus closing costs plus 60 months of any net loss on other owned residential property.
Retirement-account haircut — the reduced percentage of a retirement account’s value counted toward qualifying assets, driven largely by early-withdrawal tax exposure before age 59½.
What Are the Hard Requirements?
Program parameters vary by lender, but the ranges below reflect what Lendmire typically sees across its wholesale network, subject to full underwriting on every file.
- Loan sizes run from $300,000 to $30,000,000 through two distinct wholesale programs: a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that carries twelve-month bank-statement files to $30,000,000 on its own separate size ladder (65% to $5,000,000, stepping to 60% to $10,000,000, and 55% to $30,000,000).
- Credit floors run 660 on the portfolio program, 700 above the super-jumbo line (roughly $3,500,000 on a primary residence, $3,000,000 on a second home or investment property).
- Debt-to-income can run up to 50% on most files.
- Reserves scale with loan size: typically 3 months of payments to $500,000, 6 months to $1,500,000, and 9 months above that, plus roughly 2 additional months per other financed property, up to a 12-month ceiling. First-time investors often need 12 months regardless of size.
- Leverage steps down as loan size climbs. On a primary residence, the ladder in this network runs roughly 90% at $300,000-$1,000,000, down to 80% around $2,000,000-$2,500,000, and 75% at the $3,000,000-$3,500,000 tier for top credit borrowers — with every figure above $4,000,000 reviewed case by case, never advertised as a flat “up to.”
Second homes and investment properties typically cost about five percentage points more than primary-residence loans of the same size. For cash-out on an investment property, the cap is 70% if the property is a short-term rental. It’s up to 75% for a standard long-term rental. These limits are subject to lender guidelines.
Above $4,000,000, nothing is a flat percentage. Every file at that size goes through case-by-case review before it’s even submitted, and super-jumbo overlays kick in above $3,500,000 on a primary residence or $3,000,000 on a second home or investment property: a 700 credit floor, clean housing history, 48-month seasoning on any credit event, U.S. citizen or permanent resident status, no non-occupant co-borrowers, no rural property, a ten-acre maximum, and cash-out proceeds that cannot be used to satisfy reserve requirements. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Where Does the General Rule Break Down?
The general asset-depletion rule — divide assets, add to income, run DTI — breaks in several predictable places. Knowing these edge cases in advance saves a borrower a wasted application.
Retirement accounts under 59½. The tax exposure described in the IRS guidance on IRA withdrawals — ordinary income tax plus a 10% penalty on early distributions, with limited exceptions — is exactly why retirement funds get discounted more heavily than a taxable brokerage account for a borrower who hasn’t hit that age threshold. Two borrowers with identical net worth can qualify for very different loan amounts purely based on age and account type.
Sole-source versus supplemental use changes everything. A borrower using asset allowance as the only qualifying income faces the 84-month divisor. A borrower layering asset income on top of documented pension or investment income gets a shorter divisor — 36 or 60 months — but that shorter divisor only applies within certain DTI bands. The structural choice of “is this my only income or a supplement” changes the entire calculation before a single number gets plugged in.
Combining asset depletion with DSCR for a real estate investor. These two underwriting methods solve completely different problems. Asset depletion looks at the borrower’s balance sheet; a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines — not personal income or personal assets at all. A high-net-worth investor might use asset depletion to buy a primary residence while using a DSCR loan, structured through Lendmire’s DSCR programs, to finance a rental property in the same portfolio. Because DSCR loans are business-purpose investor loans, they’re reviewed differently from a standard owner-occupied mortgage, and the two paths don’t compete — they run on entirely separate logic.
Business assets rarely count. A borrower whose net worth is mostly tied up in a closely-held business, rather than personal liquid accounts, generally can’t use those funds toward asset depletion. That borrower’s better fit is often a bank-statement program that is reviewed on the business’s cash flow instead — a path covered in more depth in Lendmire’s guide to qualifying without tax returns.
Agency asset-depletion products aren’t this product. Fannie Mae and Freddie Mac publish their own asset-depletion-style calculations for conventional loans, but those are agency products with agency-specific rules, entirely separate from the non-QM programs described here. Where rental income (not assets) qualifies a one-unit investment property in the conventional space, the appraiser uses Fannie Mae’s Form 1007 rent schedule — a naming convention worth knowing but unrelated to how non-QM asset depletion actually works.
What Does the Decision Look Like in Practice?
If you’re deciding whether asset depletion fits your situation, you’re really asking one question: does my documented income reflect my true ability to pay, or does my balance sheet tell the real story? Most high-net-worth borrowers who need this program fall into a few groups. Some have recent business-sale proceeds sitting in brokerage accounts. Some are retirees drawing from a portfolio instead of a paycheck. Others are real estate investors whose depreciation and pass-through losses erase taxable income, even as their liquid net worth keeps growing.
Picture an investor who set up a rental portfolio to save on taxes. They use heavy depreciation and cost segregation, so their taxable profit stays low. But they also hold several million dollars in brokerage and retirement accounts. Standard income underwriting would never approve a large mortgage based on this investor’s traditional personal-income documents alone. Asset depletion changes that. It builds a qualifying-income figure from real, verifiable liquidity. The investor doesn’t need to sell appreciated stock and trigger capital gains. They also avoid early retirement withdrawals that would trigger tax penalties.
This matters beyond any single transaction. An investor who avoids selling assets to manufacture qualifying income keeps that capital compounding and working elsewhere. At the same time, they can still get financing for a primary residence, second home, or portfolio move. It’s genuinely useful to understand how a lender’s discount schedule treats cash versus brokerage holdings versus retirement funds. This knowledge helps you plan which accounts to keep liquid before a purchase or refinance.
Across files Lendmire’s network sees, the deposits-and-assets conversation usually starts the same way: a borrower with strong liquidity and a self-employed or investor income profile that doesn’t match their actual cash position. The stronger files tend to pair a clean asset picture — no staged deposits, no last-minute transfers — with realistic expectations about where the loan lands on the leverage ladder once size and property type are factored in. Files that assume a flat percentage regardless of loan size are usually the ones that need a second look before submission.
Are you self-employed and do your bank deposits tell a stronger story than your traditional income documents? Then a bank-statement jumbo path may work better for you than pure asset depletion. If you want to compare asset-based options side by side, Lendmire’s complete guide to asset-qualifier mortgages breaks down the differences.
The non-QM category that includes both asset depletion and DSCR products has been growing fast. Trade coverage from Scotsman Guide points to asset-rich households and DSCR-focused investors as two of the core groups driving that growth. It notes that asset depletion “can turn idle brokerage and retirement balances into attributed income” for affluent borrowers, including a growing wave of retirees. This growing interest from investors and the secondary market tends to support wider product availability across the space.
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.
Frequently Asked Questions
Do I have to actually spend down my assets to use this program? No. The depletion calculation is a hypothetical income figure used for qualification purposes only. Nothing is liquidated, and the account balances stay exactly where they are, subject to seasoning and sourcing verification.
Can I combine asset depletion with a DSCR loan on the same portfolio? Yes, but they qualify different properties under different logic. Asset depletion looks at personal liquid assets to qualify a primary or second home, while a DSCR loan is reviewed for an investment property based on that property’s own rental income covering the payment, subject to lender guidelines.
Does my age affect how much of my retirement account counts? Yes. Retirement funds typically count at 70% of value for borrowers under 59½ and 80% for borrowers 59½ or older, reflecting the tax exposure on early withdrawals described by the IRS.
What if most of my net worth is tied up in my business rather than personal accounts? Business assets generally don’t count toward asset depletion in these programs. A bank-statement program that is reviewed on the business’s own cash flow is usually a better fit in that situation.
Is there a maximum loan amount for asset depletion borrowers? Loan sizes in this network run from $300,000 up to $30,000,000 across two separate wholesale programs, with leverage stepping down and underwriting review intensifying as size increases — everything above $4,000,000 is reviewed case by case before submission. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
If you are buying or refinancing a property and want to see how asset-based or income-based qualification stacks up against your specific numbers, Lendmire can help compare loan options based on assets, credit profile, leverage, and investor goals. Reach Lendmire’s team at 828-256-2183 to walk through a scenario.
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 — is a mortgage brokerage specializing in DSCR investor loans, helping arrange financing across 40 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 2025 and 2026.
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. IRS — What if I Withdraw Money From My IRA
2. OCC Bulletin 2019-36 — Asset Dissipation Underwriting
3. Scotsman Guide — Which Groups Are Driving Non-QM Lending
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.
