Asset Depletion Mortgages In Atherton — The Quick Read: an asset depletion mortgage turns a borrower’s liquid savings — brokerage accounts, retirement funds, bank balances — into an imputed monthly income figure for loan qualification, instead of relying on traditional personal-income documentation or a paycheck. Lenders divide the eligible balance by a set number of months to produce that figure. It’s built for high-net-worth borrowers whose balance sheets look strong but whose taxable income looks thin.
This is a national explainer. The underwriting logic below applies wherever a borrower has substantial liquid assets and comparatively modest reported income — the mechanics don’t change by zip code, only the size of the file does.
Key Takeaways
- Asset depletion converts a net liquid-asset balance into a monthly income figure by dividing it over a fixed period, typically 36, 60, or 84 months on the programs Lendmire’s wholesale network places.
- Retirement accounts count at a reduced rate before age 59½ because of the real tax cost of early withdrawal.
- Two separate underwriting paths exist: an asset allowance that supplements other income, and an assets-only path with no debt-to-income calculation at all.
- Loan sizes on these programs run from $300,000 to $30,000,000 through two separate wholesale ladders, with leverage stepping down as the loan amount climbs.
- Illiquid holdings — unvested equity, private business stakes, real estate equity already owned — generally don’t count toward the pool.
What Asset Depletion Actually Does
An asset depletion mortgage lets a lender qualify a borrower using the liquid wealth already sitting in accounts, rather than a W-2 or a tax return. It’s a recognized underwriting path.
This matters for a specific type of borrower. Maybe they sold a business. Maybe they retired with a large 401(k) balance. Maybe they built a taxable brokerage account. But their traditional personal-income documentation shows little income because of depreciation, write-offs, or simply not drawing a salary. Income-based underwriting often can’t see that borrower’s real capacity to pay. Asset depletion gives a lender a documented way to measure it. And it does this without forcing a sale of the very holdings that prove the borrower’s strength.
How Underwriting Treats It, Step By Step
The math is mechanical once you see it laid out. Here’s how a file actually moves through the process on the programs in Lendmire’s wholesale network.
1. Verification of the asset pool. The lender pulls statements for every account the borrower wants counted — checking, savings, brokerage, retirement. Each account has to show a documented balance history, not a screenshot.
2. Netting the balance. Funds already earmarked for the down payment, closing costs, and required post-closing reserves get subtracted first. What’s left is the eligible net balance used in the depletion math.
3. Applying the divisor. The net balance is divided by a fixed number of months to produce a monthly income figure. A shorter divisor produces a bigger monthly number; a longer divisor produces a smaller one. On the programs Lendmire places, that divisor typically runs 36, 60, or 84 months depending on the borrower’s debt-to-income position and the loan size — more on that below.
4. Adjusting for retirement-account age. Tax-deferred accounts carry a real cost if the borrower is under 59½. The IRS imposes a 10% additional tax on most early distributions taken before that age, on top of ordinary income tax. Underwriting reflects that real-world penalty. It counts retirement balances at a reduced percentage for younger borrowers, and a higher percentage once the borrower clears the age threshold.
5. Credit and reserve review. Credit history, debt-to-income, and post-closing liquidity all get layered on top of the asset math — asset depletion replaces the income line, not the entire underwriting file.
6. Property valuation happens separately. None of this changes how the lender appraises the property. A single-family rental still gets valued the standard way. A 2-4 unit property uses the comparable income-property appraisal format. This process runs on its own. It doesn’t depend on how the borrower’s ability to pay gets documented.
The Structures and Variations
Two distinct paths exist inside asset depletion, and mixing them up is the most common misunderstanding a broker hears from borrowers. Asset allowance is a supplemental path. It adds an imputed income line to whatever other income the borrower already has, and it caps out around an 80% loan-to-value ceiling on the programs Lendmire’s network places. The divisor selected depends on the borrower’s overall debt position: a 36-month divisor applies when debt-to-income sits at or below 60%, a 60-month divisor applies above that threshold, and an 84-month divisor gets used either as a standalone qualifying method or on any loan above $3,500,000. Shorter divisors produce more qualifying income per dollar of assets — which is why the DTI-driven split matters so much to how big a loan a given asset pool can support. The CFPB’s Ability-to-Repay framework lists “current or reasonably expected income or assets” as the very first factor a lender must consider before extending a covered mortgage — so assets standing in for income isn’t a workaround.
Assets-only qualification skips debt-to-income math entirely. Instead, it requires the borrower to show U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus sixty months of any documented net loss on other residential real estate the borrower holds. This path exists for the borrower whose liquid wealth is simply overwhelming relative to the loan size and who’d rather not run a DTI calculation at all.
Retirement accounts get their own haircut inside either path. They typically count at 70% of value. That rises to 80% once the borrower is past 59½. Business funds, gift funds, most trusts other than a revocable living trust, unvested stock, and cryptocurrency generally don’t count toward either pool. These assets aren’t liquid or documentable enough to satisfy a reasonable underwriter.
Loan sizing on these programs runs wide. A portfolio non-QM bank-statement program carries files to $6,000,000, and a separate bank portfolio program carries twelve-month-statement files all the way to $30,000,000 on its own ladder — 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% or the band’s ceiling, whichever is lower. Leverage on a primary residence steps down as size climbs too: up to 90% around the $1,000,000 mark, 85% near $2,000,000, 80% near $3,000,000, and case-by-case review above $4,000,000 — every figure at that size gets reviewed individually before submission, never assumed. Second homes and investment properties generally run about five points lower at every size band than a comparable primary residence.
Where the General Rule Breaks
The clean version of asset depletion — divide the balance, get a monthly figure, move on — breaks down in a handful of predictable places.
Illiquid assets don’t count, full stop. Unvested equity compensation, private or closely-held business ownership stakes, and equity in real estate the borrower already owns generally get excluded from the pool. None of those convert to cash on a predictable timeline, so a reasonable lender won’t treat them as if they were sitting in a checking account.
Retirement-account age creates a hard line. A dollar in a traditional IRA held by a 45-year-old is not economically the same as a dollar in a savings account, because pulling it out early triggers that 10% penalty plus ordinary tax. Files involving borrowers under 59½ get materially different treatment on retirement balances than files where the borrower has already cleared that threshold.
That price-to-income gap is the entire reason non-QM and DSCR programs exist for the investor who wants to use asset-based qualification on a rental purchase.
Business-purpose loans sit outside the usual rulebook entirely. DSCR loans are designed for non-owner-occupied investment properties. Because they’re business-purpose investor loans, they get reviewed differently from a standard owner-occupied mortgage — the CFPB’s business-purpose exemption under Regulation Z removes most rental-property financing from the consumer disclosure framework altogether, even though a prudent lender still verifies assets and repayment capacity voluntarily. For an investor buying rental property in an LLC, that’s often the more natural fit than a personal-name asset depletion mortgage — and it’s where the property’s own rental income, not the owner’s balance sheet, drives lender review work. Lendmire’s complete DSCR loans guide walks through how that math runs for a rental purchase.
Key Terms Defined
Asset allowance — a qualification method that turns liquid assets into a supplemental monthly income figure, added to whatever other income the borrower already reports, subject to a debt-to-income calculation.
Assets-only qualification — a path that requires liquid assets equal to the loan amount plus closing costs and skips a debt-to-income calculation entirely.
Divisor (or depletion period) — the fixed number of months a net asset balance gets divided by to produce a monthly qualifying income figure; shorter divisors produce more usable income per dollar of assets.
Net documented assets — the eligible balance left after subtracting funds already committed to the down payment, closing costs, and required reserves.
Business-purpose loan — financing for a non-owner-occupied investment property, reviewed under different underwriting rules than a personal-residence mortgage because the borrower is investing, not living there.
Running the Numbers: A Practical Scenario
Consider an investor sitting on a substantial brokerage account and a modest 401(k). They sold a business a few years back and now report very little taxable income. Their traditional personal-income documentation won’t support a conventional mortgage for a second home purchase. Under an asset allowance path with an 84-month divisor — used when the loan sits above $3,500,000 or when the borrower elects it as a standalone method — the brokerage balance converts into a monthly qualifying figure that stands in for a paycheck. This is calculated net of funds needed for the down payment and reserves. Reserves get layered on top: typically 3 months of payments on loans to $500,000, 6 months to $1,500,000, and 9 months above that, plus additional months for each other financed property the borrower carries, up to a 12-month ceiling. Credit typically needs to clear a 660 floor on the portfolio program. That rises to 700 above the super-jumbo line near $3,500,000 on a primary residence or $3,000,000 on a second home or investment property. None of these figures are guarantees. Every file gets underwritten on its own facts, and program parameters shift by lender.
Frequently Asked Questions
Does asset depletion mean I have to sell my investments?
No. The calculation converts a documented balance into an imputed monthly figure for qualification purposes only — it isn’t evidence that the borrower has to liquidate anything to make payments. The assets stay invested; the lender just verifies and considers them, the same way the CFPB’s underwriting framework treats income or assets as an equally valid factor.
Do retirement accounts count the same as cash?
No, and the gap is bigger before age 59½. Because early withdrawals trigger a real tax penalty, retirement balances typically count at a reduced percentage for younger borrowers and a higher percentage once the borrower clears that age. A dollar in an IRA and a dollar in a checking account aren’t underwritten as equivalent.
Can asset depletion be used to buy an investment property?
Non-QM programs fill that gap, and on the asset allowance and assets-only paths in Lendmire’s wholesale network, the ceiling typically runs to 80% loan-to-value on primary and second homes. Investors buying pure rental property more often land on a DSCR loan instead, which qualifies primarily on the property’s own rental income covering the payment, subject to lender guidelines.
How is the monthly qualifying income actually calculated?
The net eligible balance — after subtracting down payment, closing costs, and required reserves — gets divided by a fixed number of months. On the programs Lendmire places, that divisor is typically 36 or 60 months for a supplemental asset allowance depending on the borrower’s overall debt position, or 84 months when it’s used as a standalone method or on loans above $3,500,000.
What credit score do I need for an asset depletion mortgage?
Typically a 660 floor on the portfolio program in Lendmire’s network, rising to 700 above the super-jumbo threshold near $3,500,000 on a primary residence. These are typical ranges on select wholesale-network guidelines, not universal minimums — every file gets reviewed individually.
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.
Do you have strong liquid assets but a tax return that doesn’t show it? Lendmire can help. We’ll compare asset depletion structures against a straightforward DSCR path. We match the property, the credit profile, and the balance sheet to the program that actually fits. For rental purchases specifically, check the coverage math and leverage tables in Lendmire’s asset depletion coverage for Jupiter, Florida investors. It walks through a comparable file from the other side of the country.
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 focused on investor financing, arranging DSCR loans in 39 states plus Washington, D.C. — 40 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. IRS — Retirement Topics: Exceptions to Tax on Early Distributions
2. CFPB — Ability-to-Repay Summary
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.
