Asset Depletion Mortgages — The Quick Read: These loans qualify a borrower on liquid wealth instead of pay stubs or traditional personal-income documentation. A lender totals eligible accounts, applies haircuts by asset type, and divides the result over a set number of months to produce a monthly qualifying figure. No liquidation happens — the money stays invested. It’s a personal-balance-sheet tool for primary and second homes, not a way to finance a rental property.
Key Takeaways
- Asset depletion turns liquid wealth into a qualifying “income” figure without selling anything.
- The divisor — the number of months assets are spread across — is the single biggest variable in the math, and it differs by program.
- Retirement accounts, RSUs, loan-out income, and business funds each get treated differently, and some assets don’t count at all.
- Through select lenders in Lendmire’s wholesale network, this path runs on primary and second homes, capped at 80% loan-to-value.
- Investors buying rental property almost always land on a DSCR loan instead, because that program is reviewed on the property’s own rents, not the borrower’s balance sheet.
Key Terms Defined
Asset depletion (also called asset dissipation or asset utilization): an underwriting method that converts a borrower’s liquid assets into a monthly income figure, used in place of — or alongside — traditional employment income.
LTV (loan-to-value): the loan amount expressed as a percentage of the property’s value; an 80% LTV means the loan covers 80% of the price and the borrower brings the rest. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
DTI (debt-to-income): the share of a borrower’s monthly income that goes toward debt payments, including the new mortgage.
Non-QM (non-qualified mortgage): a loan that doesn’t fit the standard, tax-return-driven underwriting box that most conventional mortgages use — asset depletion loans generally live here.
DSCR (debt-service coverage ratio): for rental property loans, the ratio of a property’s rent to its full monthly payment; it’s the metric that replaces personal income documentation on an investor loan. Lendmire’s complete DSCR loans guide walks through that math in full.
Seasoning: the amount of time an asset, or a borrower’s ownership of a property, has to sit before a lender will count it.
How Underwriting Turns Assets Into a coverage figure
Here’s the mechanical answer: a lender totals eligible liquid assets, discounts certain account types for volatility or access restrictions, subtracts money earmarked for the deal, and divides what’s left by a set number of months. That monthly figure functions like income on the loan application — often stacked on top of any other documented income the borrower has.
Break it into six steps.
Step one — inventory the assets. Checking, savings, money-market accounts, CDs, brokerage holdings, and vested retirement accounts are typically eligible. Real estate equity generally isn’t, because it isn’t liquid the way a bank account is.
Step two — apply haircuts. Cash usually counts at full value. Stocks, bonds, and retirement accounts get discounted for market risk and access limits. The Office of the Comptroller of the Currency — the federal regulator that oversees this practice at national banks — describes prudent asset-based underwriting as either assuming no rate of return on the assets or a well-supported one tied to how liquid and stable that asset actually is. It’s a safety-and-soundness standard, not a fixed formula, which is exactly why the discount a stock portfolio takes at one lender can look different at another.
Step three — subtract funds already spoken for. Down payment, closing costs, and required reserves come out of the pool before the math runs. You can’t count the same dollars twice.
Step four — divide by the depletion period. This is where outcomes diverge the most. A shorter divisor spreads the same asset pool over fewer months, producing a meaningfully higher monthly qualifying figure than a longer divisor applied to the identical portfolio. Two borrowers with the same net worth can qualify for very different loan amounts purely because their lenders used different divisors.
Step five — blend with other income, if there is any. A retiree drawing modest Social Security or a pension can stack that income on top of the asset-based figure. The combined total is what drives the debt-to-income calculation.
Step six — underwrite everything else the normal way. Assets solve the income problem. Credit, reserves, and property review still happen. The federal Ability-to-Repay rule, which the Consumer Financial Protection Bureau enforces, requires lenders to consider income or assets as part of a documented ability to repay — assets have always been an approved substitute, not a loophole.
No liquidation ever occurs in this process. The portfolio stays invested. The math simply reframes it.
Two Paths Through Lendmire’s Network
Through select lenders in Lendmire’s wholesale network, asset depletion isn’t one product — it’s two, and they solve different problems.
The asset allowance path divides liquid assets by 36 months when it’s supplementing other income and the borrower’s overall DTI sits at or below 60%, or by 60 months when DTI runs above that. When the asset math has to stand entirely on its own — or the loan amount runs above $3,500,000 — the 84-month divisor applies instead. This path runs on primary residences and second homes only, capped at 80% loan-to-value.
The assets-only path drops DTI from the equation entirely. It requires U.S. liquid assets equal to the loan amount, plus closing costs, plus sixty months of coverage for any net loss on other residential property the borrower holds. This is the cleanest option for someone whose balance sheet is deep but whose income documentation tells a much smaller story.
Retirement accounts count at 70% of value, rising to 80% once the borrower is 59½ or older — the age line where early-withdrawal exposure drops off. Business funds, gift proceeds, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count on either path, full stop.
Credit sits at a 660 floor across most of this network’s programs, moving to 700 once a loan crosses into super-jumbo territory (above $3,500,000 on a primary residence, $3,000,000 on a second home). Reserve requirements scale with loan size — typically three months of reserves to $500,000, six months to $1,500,000, and nine months above that, on most files.
Where the General Rule Breaks
Retirement-account age is the first edge case, and it’s a hard line rather than a gradient. Under 59½, the account still counts, but at the lower 70% haircut — the lender is pricing in the tax and penalty exposure of an early withdrawal the borrower would face if that money were actually pulled. Cross 59½, and the same account jumps to 80%. Nothing else about the account changes; the birthday does the work.
RSUs are the second edge case, and it’s a documentation problem more than a math problem. Unvested equity compensation never counts as an asset — it isn’t liquid and it isn’t guaranteed. But vesting income that’s already landed and is actively hitting a brokerage or bank account is a different animal, and how a lender treats vesting schedules going forward is its own conversation. Lendmire has written specifically about how vesting RSU income gets counted on an asset depletion file, which is worth a look for anyone with meaningful unvested equity still on the table.
Loan-out income is the third edge case, common among entertainers, athletes, and other borrowers who get paid through a personal loan-out corporation rather than a W-2. That income doesn’t fit neatly into either a standard pay-stub file or a straight asset calculation, and it gets handled with its own documentation logic — Lendmire’s breakdown of how loan-out income counts on an asset depletion mortgage covers that specifically.
Business funds are the fourth edge case, and the rule here is simple and absolute: money sitting in a business account never counts toward the asset pool on this program, even if the borrower owns the business outright. That’s a meaningful distinction from a bank-statement loan, where deposits into a personal account from that same business would count in full. The two programs solve overlapping problems with completely different math.
Loan size above $4,000,000 is the fifth edge case, and it applies regardless of which asset path a borrower uses. Every file above that threshold gets reviewed case by case before submission, rather than running against a published grid. That review process is standard for high-balance files across this entire non-QM category, not a sign of anything unusual about a particular borrower’s assets.
Why This Isn’t a Rental-Property Tool
Asset depletion answers “can this person personally support the payment.” A rental property purchase asks a completely different question: “does the property support itself.” Through select lenders in Lendmire’s network, the asset allowance and assets-only paths described above apply to primary residences and second homes — not investment property.
That’s not a technicality. An investor buying a rental doesn’t need the lender to look at personal liquid wealth at all. A DSCR loan is reviewed primarily on the property’s own rental income covering the payment, subject to lender guidelines — no personal income documentation, no traditional personal-income documentation, no asset-depletion math required. If you’re comparing that path against a no-income-verification mortgage more broadly, DSCR loan vs. no-income-verification mortgage lays out the distinction in more depth.
The two products do occasionally overlap at the margins — verified liquid assets can sometimes satisfy a DSCR file’s reserve requirement — but they’re not interchangeable qualification paths. An investor with substantial liquid assets and modest documented income who wants to buy a primary residence is exactly the asset-depletion borrower profile. That same investor buying a rental duplex is a DSCR borrower, full stop, regardless of how much cash sits in the brokerage account. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
What the Decision Actually Looks Like
The decision usually comes down to what the borrower is buying and what their balance sheet actually looks like. A retiree with a modest pension and a seven-figure portfolio, buying a primary residence, is the textbook asset-allowance case — the pension covers part of the DTI story, and the asset math fills the rest. A recent business seller with a large liquidity event and thin recent traditional personal-income documentation, buying a second home, often fits the assets-only path better, since there’s no ongoing income to blend in anyway.
Someone weighing a divisor choice should ask their lender which path — 36, 60, or 84 months — actually applies to their DTI and loan size, since that single variable moves the coverage figure more than almost anything else in the file. And anyone holding meaningful unvested RSUs or loan-out income should get that conversation started early, because those income types route through different documentation than a standard bank statement.
For a rental purchase, the honest answer is usually simpler: stop looking at asset depletion and start with the property’s rent roll. That’s where DSCR earns its keep. Reach Lendmire at 828-256-2183, or request a quote directly, to compare how an asset-based file stacks up against a DSCR structure for a specific purchase — the right answer depends on the property, the borrower’s documentation, and the goal.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion? No. The assets stay invested and untouched; the lender is only using their value to calculate a hypothetical monthly income figure. Nothing is liquidated as a condition of the loan.
Can I combine asset depletion income with my Social Security or pension? Yes, on most files. The asset-based figure typically adds to other documented income rather than replacing it, which is the standard structure for retirees using this program.
Does my 401(k) count the same as my brokerage account? Not exactly. Retirement accounts generally carry a lower haircut than cash and are treated differently before and after age 59½, when early-withdrawal exposure drops away.
Can I use asset depletion to buy a rental property? Generally, no — through select lenders in Lendmire’s network, this path applies to primary residences and second homes. Investment property purchases typically run through a DSCR loan instead, which is reviewed on the property’s rental income rather than the buyer’s balance sheet.
Why do lenders use such different divisor periods? Because no regulator mandates one. The federal guidance on this practice sets safety-and-soundness expectations but leaves the actual formula — including the divisor — to each lender’s own risk framework, which is why shopping more than one program can change the outcome significantly.
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
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 40 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Consumer Financial Protection Bureau — What Is the Ability-to-Repay Rule
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.
