Asset Depletion Mortgage Requirements — The Quick Read: After a business sale, stock liquidation, or inheritance, a lender can convert your liquid assets into monthly qualifying income instead of asking for two years of traditional personal-income documentation. Underwriting focuses on where the money came from, how long it has sat in your account, and how much of it is actually liquid and yours. Requirements vary widely by lender because this is a non-QM structure, not a federal program — divisors, haircuts, and eligible account types differ from one guideline set to the next.
Somebody just sold a company, exercised a block of options, or received a settlement, and now has a bank balance that dwarfs their W-2. Conventional underwriting doesn’t know what to do with that. Asset depletion underwriting does.
Key Terms Defined
Asset depletion (or asset dissipation): a method where a lender divides your eligible liquid assets by a set number of months to produce a monthly income figure used for qualification — no liquidation required.
Seasoning: the length of time funds must sit in an account, in your name, before a lender will count them without extra scrutiny.
Sourcing: the paperwork trail proving where a large deposit came from — a sale agreement, a settlement letter, a distribution notice.
Non-QM (non-qualified mortgage): a loan that doesn’t follow the standard repayment-capacity checklist used by conventional lenders, which is what allows asset-based income calculations to exist in the first place.
DTI (debt-to-income): the percentage of your monthly income that goes toward debt payments, including the new mortgage.
How Does Underwriting Actually Treat a Liquidity Event?
Underwriting doesn’t just add up your account balance and call it income. It works through a sequence: isolate what’s usable, verify where it came from, subtract what’s spoken for, then apply a divisor. Skip any step and the file stalls.
Step one: isolate the eligible assets. Not every dollar in an account counts. The funds need to be held in your own name, with no legal restriction on pulling them out. A brokerage account you control outright is clean. A trust account, or a balance still sitting inside a business entity you own, is not — at least not yet.
Step two: source the deposit. Any balance jump that doesn’t match your normal pattern gets flagged. If your account suddenly shows a large lump sum, the underwriter wants a paper trail — a bill of sale, a closing statement, an inheritance letter — tying that deposit to a specific, verifiable event. This is standard fraud-prevention logic across mortgage lending generally, not a program-specific quirk, and it’s part of why the federal consumer-finance regulator’s repayment-capacity/qualified-mortgage Small Entity Compliance Guide directs lenders to verify the assets they’re relying on, even though it stops short of dictating exactly how.
Step three: let the money season. Funds that just landed get treated more skeptically than money that’s been sitting quietly for a while. Most lenders want to see the deposit reflected across at least two statement cycles before they’ll rely on it without additional documentation.
Step four: subtract what isn’t actually available. Before any divisor gets applied, your down payment, closing costs, and required post-closing reserves come out of the total pool first. This is the single most common mistake practitioners see — running the divisor against the full account balance instead of what’s left after the deal actually closes.
Step five: apply the divisor. The remaining eligible balance gets divided by a set number of months to produce a monthly qualifying-income figure. You don’t sell anything. The portfolio stays invested, and the calculation is a paper conversion for underwriting purposes only.
Step six: check for double-counting. If an account is already being used to generate qualifying income through depletion, the interest or dividends that same account throws off generally can’t be counted a second time as separate income.
What Structures and Variations Actually Exist?
There isn’t one asset depletion formula — there are several, and the one that fits depends on how big the liquidity event was and how the rest of the file looks. Across the wholesale network Lendmire places files with, two structures cover most post-liquidity-event scenarios: an asset allowance that supplements other income, and an assets-only path that replaces income entirely.
Asset allowance. Liquid assets get divided by 36 months when the file’s overall DTI runs at or below 60%, or by 60 months when DTI runs above that. For files above $3,500,000, or for anyone who wants a standalone calculation rather than a supplement to other income, the 84-month divisor applies instead. This structure is available on primary residences and second homes, up to 80% loan-to-value on most files, subject to underwriting.
Assets-only. This path drops DTI from the equation entirely. Instead, the file needs U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus 60 months of any net loss carried on other residential real estate the borrower owns. It’s a higher liquidity bar, but it’s built for exactly the profile that just walked away from a sale — asset-rich, and not interested in reconstructing a traditional income story.
Account-type haircuts. Not every dollar counts the same. Retirement accounts typically count at 70% of value, stepping up to 80% once the borrower has crossed 59½ — the age where penalty-free access kicks in. Business funds still sitting inside the entity, gifted money, assets held in most trust structures (aside from a revocable living trust), unvested stock, and cryptocurrency generally don’t count at all in this framework, regardless of the total balance.
Documentation. Most files run on 12 or 24 consecutive months of bank or brokerage statements, all pages included — gaps trigger follow-up requests every time. Business owners who move sale proceeds or ordinary distributions from a company account into a personal account get to count those transfers in full, once they’ve actually landed and seasoned personally.
Where this sits on the size spectrum. These structures show up across a lending range that runs from roughly $300,000 up to $30,000,000 through two overlapping wholesale channels — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that carries 12-month-statement files up its own ladder: 65% at the lower end, stepping down to 60% by $10,000,000 and 55% by $30,000,000, with interest-only capped at 60% or the ladder’s ceiling for that band, whichever is lower. Above $4,000,000, every file goes through case-by-case review before it’s even submitted — that’s not a soft caveat, it’s how the largest files actually move through underwriting.
Leverage generally steps down as size goes up. On a primary residence, most files see something close to 90% at the $300,000-$1,000,000 range, tightening to roughly 85% by $2,000,000, 80% by $3,000,000, and 75% at the strongest credit tier through $4,000,000 — case-by-case review from there. Second homes and investment properties typically run about five points lower at every size band along the same curve. Credit floors move too: 660 is the general floor on the portfolio program, 680 on the bank program, and 700 once a file crosses into the super-jumbo range above roughly $3,000,000-$3,500,000 depending on occupancy.
Reserves scale with loan size, not just DTI. Most files need three months of reserves up to $500,000, six months up to $1,500,000, and nine months above that — plus two additional months for each other financed property the borrower carries, up to a 12-month ceiling. First-time investors are generally held to the full 12 months regardless of loan size.
Where Does the General Rule Break?
The clean divisor-and-haircut math above assumes a straightforward liquidity event: cash, sourced, seasoned, sitting in a personal account. Real files aren’t always that clean, and several situations break the general pattern entirely.
Vested RSUs aren’t a liquidity event — they’re income. Restricted stock units that have vested but haven’t been sold are often treated as ongoing income rather than a depletable asset, following conventions closer to agency-style income averaging. That typically means a multi-year vesting history and proof the payments are likely to continue, capped at a limited share of total qualifying income. Confusing a completed stock sale (an asset) with unvested or recently vested RSUs (income) is one of the most common miscommunications after an equity-heavy liquidity event.
Stock options are usually a non-starter. Unlike RSUs, options generally aren’t treated as qualifying income by mortgage underwriters at all, vested or not.
Retirement money gets an age discount, not a blanket haircut. The 70%/80% split tied to age 59½ exists because funds pulled before that threshold carry an early-withdrawal penalty — the discount reflects that friction, not a judgment on the account itself.
Business cash isn’t personal cash until it moves. Even a founder who owns 100% of the company can’t count the company’s operating balance until it’s actually transferred into a personal account and seasoned there. This trips up more post-sale entrepreneurs than almost anything else in this process — proceeds sitting in an escrow holdback or still inside the entity simply aren’t available for the calculation yet.
Gifts and inheritances get more scrutiny than a paycheck ever would. A sudden six-figure deposit from a relative or an estate doesn’t get waved through — it needs the same documentation trail as a business sale, and unseasoned windfalls are often discounted or excluded rather than counted at full face value the moment they land.
“90-day seasoning” isn’t a federal law. It’s an industry convention, not a statute — the CFPB’s ATR/QM guidance doesn’t mandate a blanket seasoning window, which is exactly why individual lenders set their own timelines and why those timelines vary as much as they do.
Does Any of This Apply to a Rental Property Purchase?
Often, no — and that’s the part investors miss. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, so a rental-property buyer coming off a liquidity event frequently doesn’t need an asset depletion calculation at all for the loan itself. Read Lendmire’s complete DSCR loans guide for how that qualification path works end to end.
Where the liquidity event still matters on a DSCR file is the money, not the income math. Sale proceeds or a distribution check still has to be sourced and seasoned to fund a down payment or reserves — the same scrutiny described above applies in full, even though there’s no divisor being calculated against it. An investor who just closed a business sale and wants to deploy that cash across several rental purchases will run into the exact same sourcing conversations a primary-residence borrower does; it just shows up on the reserves side of the file instead of the income side.
Because DSCR loans are business-purpose products, they sit outside TRID’s consumer disclosure requirements entirely — there’s no Loan Estimate or Closing Disclosure timeline to track, since the exemption applies from the start.
What Does the Decision Actually Look Like?
Across files with a real liquidity event behind them, the recurring pattern is timing. Investors who move sale proceeds into a personal account early — before they even start shopping for a property — clear the sourcing and seasoning conversation before it ever becomes a problem. Investors who wait until underwriting is already underway end up producing bill-of-sale documents and letters of explanation under deadline pressure, which is avoidable friction more than it is a hard obstacle.
Tax treatment also shapes how much of that windfall is actually available to qualify with. Long-term capital gains are taxed at 0%, 15%, or 20% depending on total taxable income, with the income thresholds adjusting periodically — see IRS Topic No. 409 and Kiplinger’s coverage of the 2026 threshold update for the current brackets. An investor modeling how much of a business-sale check survives to closing needs to account for that bite before assuming the full deposit is available for a down payment or a depletion calculation — tax treatment can also depend on how funds are used and how a property is held, so it’s worth a conversation with a qualified tax professional before relying on any specific outcome.
For most post-liquidity-event investors, the real appeal of asset-based qualification is that it avoids a forced sale. Cashing out further to prove monthly income defeats the purpose — the whole point is that the portfolio stays invested while the statements do the qualifying work.
Frequently Asked Questions
Do I have to sell my investments to qualify with asset depletion?
No. The divisor calculation converts your balance into a monthly income figure on paper — you keep the portfolio invested and don’t need to liquidate anything to close.
How long does money need to sit in my account before it counts?
Most lenders want to see it reflected across at least two statement cycles, generally in the 60-to-90-day range, though the exact window depends on the program and the size of the deposit.
Does my 401(k) count the same as a brokerage account?
Not exactly — retirement funds typically count at a reduced percentage of their value, with a higher percentage available once you’ve crossed the age where early-withdrawal penalties no longer apply.
Can I use money still sitting inside my business?
Not until it’s actually transferred into a personal account and seasoned there. Ownership alone doesn’t make company cash personally available for underwriting.
Is asset depletion the same thing as a DSCR rental loan?
No. DSCR loans qualify off the property’s rental income, not your personal assets, so a rental-property investor coming off a liquidity event may not need an asset depletion calculation for the loan at all — though the same sourcing rules still apply to any cash used for the down payment.
If you’re weighing an asset-based purchase against a rental property purchase after a liquidity event, Lendmire can help you compare options across loan sizes, leverage, and documentation paths based on your specific asset profile and goals. Reach out to talk through which structure actually fits the file.
Investors who want the broader program framework can review how DSCR loans work.
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 built around DSCR investor lending, with programs available in 40 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. IRS – Topic No. 409, Capital Gains and Losses
2. Kiplinger – IRS Updates Capital Gains Tax Thresholds for 2026
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.
