Asset Depletion Mortgages In Franklin — The Quick Read: These loans let a lender treat your liquid assets as if they were income, dividing the balance by a set number of months to produce a monthly qualifying figure. No traditional personal-income documentation. No W-2s. Just statements. They exist for people whose bank balance tells a truer story than their tax return — retirees, founders between exits, and investors with capital parked in brokerage or retirement accounts.
Key Takeaways
- Asset depletion converts liquid assets into a monthly income number using a divisor, not a spending plan.
- Retirement funds usually count at a discount — commonly 70%, rising to 80% once you clear age 59.5, through select lenders in the wholesale network.
- The loan size range through select wholesale programs runs from roughly $300,000 to $30,000,000, with leverage stepping down as the loan gets larger.
- This is a primary-residence and second-home tool. Rental property investors typically use DSCR financing instead, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
- Above $4,000,000, every file gets reviewed case by case before it goes to submission — there’s no flat “up to” number at that size.
What an Asset Depletion Mortgage Actually Is
An asset depletion mortgage takes your liquid net worth and turns it into a substitute for income documentation. Instead of pay stubs or two years of traditional personal-income documentation, the underwriter looks at your checking, savings, brokerage, and retirement statements. From there, they run the math.
This matters most for people whose real financial life doesn’t show up on a 1040. A retiree living off a seven-figure portfolio might report almost no taxable income. A founder who just sold a company might have a huge balance sheet and a thin tax history the year after the sale. Traditional income underwriting punishes both of them. Asset depletion doesn’t.
The name is a little misleading. Nobody is required to spend the money down. The calculation is hypothetical — it imputes income for qualification purposes while the actual portfolio stays invested, untouched, and growing.
Key Terms Defined
Asset depletion — a method of converting liquid assets into a monthly qualifying-income figure by dividing the balance by a set number of months.
Divisor — the number of months a lender uses to divide your qualifying assets; a shorter divisor produces a bigger monthly income figure, a longer divisor produces a smaller one.
Non-QM — short for “non-qualified mortgage,” meaning a loan that sits outside the standard federal qualified-mortgage box and is underwritten on its own set of rules.
Expense ratio — a haircut applied to business bank-statement deposits to account for the cost of running the business before the remainder counts as income.
DSCR — debt-service coverage ratio, a measure of whether a rental property’s own income covers its full monthly obligation, used to qualify investment-property loans without personal income documentation.
LTV — loan-to-value, the loan amount expressed as a percentage of the property’s value; lower LTV means more money down.
How Underwriting Actually Treats Your Assets, Step by Step
The mechanics are more structured than the marketing makes them sound. Here’s the order underwriting actually follows.
Step 1 — Count what’s real and liquid. Checking, savings, CDs, brokerage accounts, and eligible retirement accounts go into the pool. Assets tied to lawsuits, inheritance, or a pending home sale generally don’t qualify — they’re one-time and unverifiable in the same way recurring deposits are.
Step 2 — Apply the discount. Volatile or restricted asset classes rarely count at full face value. Through select lenders in the wholesale network, retirement accounts typically count at 70% of value, rising to 80% once the borrower clears age 59.5 — the age line matters because it reflects penalty-free access. Business funds, gift funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency generally don’t count at all.
Step 3 — Subtract what’s already spoken for. Money earmarked for the down payment, closing costs, and required post-closing reserves comes out of the pool before the income math runs.
Step 4 — Divide by the program’s timeline. This is where programs genuinely differ from each other. A shorter divisor produces more monthly qualifying income from the same asset base; a longer divisor is more conservative. Bank regulators don’t mandate a specific number here — the OCC Bulletin 2019-36 explicitly leaves discount and divisor design to each lender’s own risk governance, so long as it’s analytically supported and reflects the asset’s liquidity and volatility.
Step 5 — Layer it into standard debt-to-income underwriting. The resulting figure gets treated like any other income line. It can stand alone or combine with documented pension or Social Security income, depending on the specific structure.
Documentation is lighter than a conventional file in one direction and heavier in another: current statements across multiple months to establish a pattern, proof of account ownership and unrestricted access rights, and — for accounts already in distribution — a 1099-R or distribution letter. No pay stubs. That trade-off is the entire point of the product.
The Structures That Exist Inside Asset Depletion
Not every asset-based program runs the same math, and lumping them together is a mistake. Through the wholesale network Lendmire places files through, there are two distinct paths worth knowing by name.
Asset allowance. Liquid assets get divided by 36 months when used as supplemental income at or below 60% debt-to-income, by 60 months when supplemental income runs above 60% DTI, or by 84 months when it’s the standalone qualifying method or the loan exceeds $3,500,000. This path applies to primary residences and second homes only, and it tops out at 80% loan-to-value.
Assets-only. No DTI ratio gets calculated at all. Instead, the borrower needs U.S.-based liquid assets equal to the loan amount, plus closing costs, plus 60 months of any documented net loss on other residential property. It’s the most asset-heavy path in the lineup, built for borrowers who would rather prove capacity through raw liquidity than through a calculated monthly figure.
Sizing runs from roughly $300,000 up through $30,000,000 across two separate wholesale ladders — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that takes twelve-month-statement files up to $30,000,000 on its own scale (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% loan-to-value or the band’s ceiling, whichever is lower).
Leverage on a primary residence steps down as the loan gets bigger: 90% up to $1,000,000, 85% up to $2,000,000, 80% up to $3,000,000, and 75% at the top credit tier up to $4,000,000. Past that point, every file is reviewed case by case before it’s submitted — there’s no published “up to” figure above $4,000,000, and the bank program’s own ladder takes over from there. Second homes and investment property 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 has real edges, and knowing them keeps an investor from assuming one qualification path covers every property.
It’s built around owner-occupied lending, not rental property. The historical design center for this product — retirees buying a primary residence, high-net-worth borrowers whose traditional income documentation understate reality — is occupancy-based. Asset allowance specifically applies to primary residences and second homes, not investment property. If you’re buying a rental, this is the wrong tool by design.
Real estate equity never counts. Home equity, a HELOC balance, or unrealized appreciation in another property isn’t liquid in the way the divisor math requires, so it stays out of the calculation entirely.
Cryptocurrency is excluded. Custody, volatility, and verification issues keep digital assets out of the eligible pool across the wholesale network.
Age changes the retirement-account math. The jump from 70% to 80% counted value at age 59.5 isn’t arbitrary — it lines up with penalty-free withdrawal access, which is exactly the kind of liquidity test the OCC’s guidance points at.
The super-jumbo line changes everything above it. Once a primary residence file crosses $3,500,000 — or $3,000,000 on a second home or investment property — overlays tighten: a 700 credit floor, clean housing history, 48-month seasoning on any credit event, U.S. citizens and permanent residents only, no non-occupant co-borrowers, no rural property, and cash-out proceeds can’t be used to satisfy reserve requirements. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Cash-out has a ceiling. On the portfolio program, cash-out proceeds are unlimited at or below 60% loan-to-value, but capped at $1,500,000 cash-in-hand above that line. On short-term-rental collateral specifically, cash-out tops out around 70% LTV; on a standard long-term rental the ceiling sits closer to 75% — a distinction worth knowing before assuming one number applies to both. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Asset Depletion vs. DSCR: Which Fits Your Portfolio
For a real estate investor, the honest answer is usually both — just on different properties, at different times. Asset depletion is a personal-balance-sheet tool for a home you’ll live in. DSCR financing works differently: it qualifies primarily on the property’s own rental income covering the payment, subject to lender guidelines. That makes it the more direct path for a rental purchase.
| Factor | Asset Depletion | DSCR Loan |
|---|---|---|
| Reviewed on | Personal liquid assets | Property’s rental income |
| Occupancy | Primary residence, second home | Non-owner-occupied investment property |
| Documentation | Asset statements, no conventional personal-income paperwork | Rent schedule, no personal income docs |
| Best for | Retirees, exited founders, high-net-worth buyers | Investors scaling a rental portfolio |
DSCR loans are designed for non-owner-occupied investment properties. Because they’re business-purpose investor loans, they’re reviewed differently from a standard owner-occupied mortgage.
Say an investor has a strong brokerage account and wants to buy a personal residence. That investor might run asset depletion on that purchase while financing the next rental acquisition through DSCR. These are two separate tracks with two separate underwriting frameworks, but the same borrower. Sub-1.00 coverage scenarios on the rental side are also available through select lenders in the network. However, leverage and terms adjust when the property’s income doesn’t fully clear the payment on its own.
Want the fuller mechanics of how DSCR lender review actually runs? This covers the rent schedule, the coverage math, and the property types that work best. Lendmire’s complete DSCR loans guide walks through it end to end. Are you comparing asset-based purchase financing against equity-in-place scenarios in higher-priced coastal and mountain markets? You may also find the asset depletion breakdown for Islamorada or the Atherton asset depletion analysis useful. Both walk through super-jumbo overlay territory in more depth.
The Practitioner Read: What Files Actually Look Like
Across the files that land in this lane, the smoothest ones usually share one thing: the borrower already knows which asset accounts they’re using before the file gets built, rather than trying to add accounts mid-process. Retirement accounts split by custodian and access rights create friction late in underwriting far more often than the divisor math itself does. For example, a 401(k) still tied to a former employer with restricted withdrawal terms doesn’t behave the same as a fully-vested IRA. Both may show up as “retirement assets” on a statement at first glance, but they’re not the same.
What the Investor Decision Looks Like in Practice
If you’re buying a home to live in and your balance sheet is stronger than your tax return, asset depletion is worth exploring — the credit floor sits at 660 on the portfolio program (700 on the bank program, and 700 across the board once you’re above the super-jumbo line), debt-to-income can run up to 50%, and reserve requirements scale with loan size: 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above that, plus 2 months per additional financed property up to a 12-month cap.
If you’re buying a rental, the better first question is whether the property’s own rent covers the payment — that’s DSCR territory, not asset depletion. Business bank-statement deposits, where relevant, run through an expense ratio before they count: a lower ratio for a service business with no employees, a moderate ratio for one with a small staff, and a higher ratio for larger staffs or product businesses, or an accountant-supplied ratio. Transfers from your own business into a personal account count in full.
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. And short-term rental income rules can vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income in either scenario.
This article covers consumer mortgage lending, specifically the asset depletion product. It runs through licensed operations in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. DSCR investor financing works differently. It runs on a separate, wider footprint of 40 markets, including Washington, D.C. This happens through select lenders in Lendmire’s wholesale network.
For deeper background on the mechanics discussed here, see CFPB Ability-to-Repay Summary.
Frequently Asked Questions
Do I have to actually spend down my accounts to use asset depletion?
No. The divisor math is a qualification exercise only. Your portfolio stays invested and intact — nothing gets liquidated to close the loan.
Can I use asset depletion to buy a rental property?
The asset allowance path applies to primary residences and second homes only, not investment property. Rental purchases typically move to DSCR financing instead, which qualifies primarily on the property’s own rental income.
Does my home equity count as an asset?
No. Equity in real estate isn’t liquid in the way the divisor calculation requires, so it stays out of the eligible asset pool entirely.
What happens if my loan amount is above $4,000,000?
Every file above that size gets reviewed case by case before submission. There’s no flat published leverage number at that level — it depends on credit profile, reserves, asset quality, and the specific property.
Does cryptocurrency count toward my qualifying assets?
Generally, no. Custody, volatility, and verification concerns keep digital assets out of the eligible pool across the wholesale network Lendmire works with.
If you’re weighing an asset-based purchase against a rental acquisition, Lendmire can help you compare how the numbers actually run — property income, credit profile, leverage, and what each program requires — before you commit to one path. Reach the team at 828-256-2183 to talk through where your file fits.
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 non-QM mortgage broker serving real estate investors in 40 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
2. CFPB Ability-to-Repay Summary
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.
