Asset Depletion Mortgages In Marco Island: Assets, Not Income — The Quick Read: An asset depletion mortgage turns liquid savings, brokerage holdings, and retirement accounts into a monthly qualifying income figure instead of relying on pay stubs or traditional personal-income documentation. It’s built for buyers whose balance sheet is strong but whose traditional personal-income documentation understate what they actually earn. Underwriters divide eligible assets by a set number of months to produce that income number, and the exact divisor is the single biggest lever in the whole calculation. This piece walks through how that math actually runs, where the assumptions built into it break down, and when it makes sense next to a property-income-based option like a DSCR loan.
Key Terms Defined
Asset depletion is an underwriting method that converts a borrower’s liquid assets into a monthly income figure by dividing the qualifying balance by a set number of months.
Non-QM stands for non-qualified mortgage — a loan that doesn’t fit the standard federal qualified-mortgage box, usually because of how income is documented or how the loan is structured.
DSCR stands for debt service coverage ratio — a measure of whether a rental property’s income covers its own mortgage payment, used to qualify investment-property loans without personal income documentation.
LTV means loan-to-value — the loan amount as a percentage of the property’s value or purchase price.
Reserves are the months of mortgage payments a borrower must have left in the bank after closing, held as a cushion.
DTI, or debt-to-income ratio, compares a borrower’s monthly debt obligations to their qualifying monthly income.
What Asset Depletion Actually Solves
Asset depletion exists because a lot of financially strong borrowers don’t look strong on paper. A retiree living off a $2 million portfolio may show almost no taxable income. A business owner who legally minimizes what hits their 1040 can look, on paper, like they can’t afford the house they’re sitting in cash for. In plain terms: a lender isn’t skipping the repayment-capacity analysis by looking at assets. Beyond that legal floor, there’s no single national rulebook for how the math runs. Each non-QM lending network sets its own divisor, its own eligible-asset list, and its own discount rules. That’s why the same bank statement can produce very different qualifying numbers depending on which program it runs through.
How Underwriting Actually Runs the Math
The process is mechanical once you see the five steps. Start with the assets, end with a number DTI can use.
Step one: identify eligible assets. Checking, savings, brokerage, and retirement accounts are the usual starting list. Real estate equity is not on it — more on that below.
Step two: apply a discount by asset type. Cash usually counts at full value. Retirement funds and volatile holdings typically get haircut, since they carry withdrawal restrictions or market risk that cash doesn’t. Across the wholesale programs Lendmire places files with, retirement accounts commonly count around 70% of value, stepping up to roughly 80% once the borrower is past 59½ and can access the funds without penalty.
Step three: divide by the depletion period. This is where programs diverge hardest. Across the network, the asset allowance path typically divides the qualifying balance by 36 months when it’s supplementing other income and overall DTI sits at or below 60%, by 60 months when DTI runs higher, or by 84 months when it’s standing alone or the loan size runs above $3,500,000. Market surveys of the broader non-QM space report shorter divisors near 60 or 120 months are common across the industry (Scotsman Guide), which underscores the point: the same $1.5 million account balance produces a materially different qualifying income figure depending entirely on which lender’s divisor applies. Never assume a number quoted for one program transfers to another.
Step four: stack it with other income, if there is any. Asset depletion income can sit alongside Social Security, a pension, part-time earnings, or bank-statement self-employment income, and the combined total is what DTI measures against. This is the most common real-world use case — a retiree with modest fixed income and a large portfolio, rather than a borrower relying on assets alone.
Step five: verify with statements, not pay stubs. Documentation runs on account statements — checking, brokerage, retirement custodial statements — rather than traditional personal-income documentation, subject to lender and program guidelines. On the business-income side of the ledger, the same wholesale network typically works off 12 or 24 consecutive months of bank statements, with qualifying income calculated as eligible deposits divided by the statement months after an expense ratio. Transfers from a borrower’s own business into a personal account count in full.
The Two Paths: Asset Allowance and Assets-Only
Asset depletion isn’t just one thing. There are actually two different structures, and each one solves a different problem. The Ability-to-Repay rule is the federal rule that makes this legal — not just a convenient option. Every mortgage creditor must make a reasonable, good-faith decision that a borrower can repay the loan. Assets are one of the specific inputs allowed in that decision, along with income, employment, and credit history. Lenders verify all of this through reliable third-party records (CFPB Ability-to-Repay Summary). So this approach uses a tool the rule expressly allows (CFPB Ask CFPB — Ability-to-Repay Rule).
Asset allowance supplements an income picture that’s thin but not zero. It uses the 36-, 60-, or 84-month divisor described above, applies to primary and second homes, and typically caps around 80% LTV. This is the retiree-with-a-pension scenario, or the founder with modest declared salary and a large brokerage account.
Assets-only is a different animal entirely, built for a borrower with no income narrative at all. It doesn’t run a DTI calculation. Instead, it requires the borrower to show U.S. liquid assets equal to the full loan amount, plus closing costs, plus sixty months of any documented net loss on other residential property they hold. It’s a liquidity test, not an income-conversion formula, and it’s typically reserved for the largest, most asset-rich files.
Loan sizing on both paths, and on the broader non-QM bank-statement side of Lendmire’s wholesale network, runs from $300,000 up through $30,000,000 — carried across two separate ladders. A portfolio non-QM program covers files to $6,000,000. A bank portfolio program picks up twelve-month-statement files with its own leverage ladder above that: roughly 65% to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only available at 60% or the band’s ceiling, whichever is lower. Every file above $4,000,000 gets reviewed case by case before it’s even submitted — that’s true at every size referenced here, not a formality.
Leverage on a primary residence steps down as loan size climbs: roughly 90% on files to $1,000,000, 85% to $2,000,000, 80% to $3,000,000, and 75% at the top credit tier to $4,000,000, before moving to case-by-case review through $6,000,000 and then onto the bank program’s own ladder above that. Second homes and investment properties typically run about five points lower at every size band. None of these are guarantees — they’re ceilings, subject to full underwriting and credit tier.
Credit requirements sit around a 660 floor on the portfolio program, moving to roughly 700 above the super-jumbo threshold. DTI can run up to 50% on the income-stacking path. Reserve requirements typically scale with loan size — around 3 months of payments to $500,000, 6 months to $1,500,000, and 9 months above that, plus additional months per financed property up to a cap. Cash-out is capped near $1,500,000 above 60% LTV on the portfolio program, unlimited at or below that threshold, subject to lender guidelines.
Where the General Rule Breaks
Four edge cases trip up borrowers who assume asset depletion works on total net worth. It doesn’t.
Real estate equity never counts. This is the most consistent rule across the entire non-QM market. Equity in a house is wealth, but it isn’t liquid, and asset depletion is a liquidity calculation, not a net-worth calculation. A borrower sitting on substantial home equity but modest liquid savings typically needs a cash-out refinance or a property-income-based loan instead — the equity has to be converted to cash before it can qualify as an asset.
Retirement account age matters, and RMD rules shape the picture over time. Fannie Mae’s general guidance requires unrestricted, penalty-free access to use retirement funds as qualifying income, which is why age-based discounting shows up across the non-QM space too. On the tax side, the IRS requires most retirement account holders to begin required minimum distributions at age 73, with Roth IRAs and designated Roth accounts exempt from lifetime RMDs entirely. That distinction matters for a borrower deciding which accounts to lean on for qualifying purposes and which to preserve.
Some assets never count, full stop. Business funds held for operating purposes, gifted funds, most trusts other than a revocable living trust, unvested stock, and cryptocurrency are excluded across the wholesale programs Lendmire works with — regardless of how large the balance is. A founder with a large unvested equity grant or restricted stock position needs a different qualification strategy; that’s a distinct enough problem that it’s worth a separate conversation about how vesting income and loan-out structures get counted at all — count RSU vesting income on an asset depletion mortgage covers it in detail.
Above the super-jumbo threshold, the overlays tighten hard. Loans above roughly $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property, typically require a 700 credit floor, a clean 24-month mortgage-payment history, 48 months of seasoning past any credit event, and no non-occupant co-borrowers. Cash-out proceeds can’t be used to satisfy reserve requirements at that tier either. These aren’t soft guidelines — they’re the point where a strong asset picture stops being sufficient on its own.
Asset depletion and DSCR are not the same tool. For an investor buying a rental property that already cash flows well, a DSCR loan qualifies purely on the property’s rental income — no personal income documentation of any kind, just whether the rent covers the payment. Asset depletion answers a completely different question: can the borrower’s own balance sheet support the debt, independent of any single property’s performance. An investor whose target property clears a strong coverage ratio doesn’t need asset depletion at all. One whose property comes in light — say, borderline coverage on the rent roll — is where the two tools sometimes get layered, with the asset picture serving as a compensating factor a lender reviews alongside the property’s numbers.
What the Investor Decision Actually Looks Like
Three scenarios cover most of the real-world cases.
The retiree buying a primary or second home with a pension plus a portfolio. This is the classic asset-allowance case — Social Security or pension income stacked with a depletion-derived figure from brokerage and retirement holdings, qualifying against a DTI ceiling. It’s the most common and most straightforward use of the product.
The high-net-worth borrower whose traditional income documentation doesn’t reflect their liquidity. A business owner or investor with substantial liquid reserves but a thin taxable-income picture may use the assets-only path, showing liquidity equal to the loan amount and costs rather than running an income calculation at all. This case is similar in spirit to what Lendmire covers in asset depletion mortgages for Jupiter buyers — same mechanics, different address.
The rental-property investor whose subject property doesn’t clear the ratio a lender wants on rent alone. This is where DSCR and asset depletion sit next to each other rather than compete. A property with rent that comfortably covers the payment doesn’t need anything extra. A property that comes in tighter may get reviewed with the borrower’s liquid reserves as an added factor, subject to the specific lender’s guidelines — never a guarantee, but a real option worth raising before assuming a marginal-coverage deal is dead.
Across files like these, one theme keeps showing up. It isn’t the math — it’s the documentation discipline. Statements need to be consecutive, current, and clean. A transaction history print-out can never substitute for an actual account statement. Also, any large, unexplained deposit right before an application tends to slow a file down. This happens regardless of how strong the underlying balance sheet is.
Are you comparing property-income qualification against an asset-based path? Lendmire can help you look at both sides of that comparison. This includes leverage, reserves, credit tier, and how the numbers actually land. You can review all of this before you commit to one structure over the other. Reach Lendmire at 828-256-2183 or request a quote directly.
Frequently Asked Questions
Does the type of retirement account change how much of it counts?
Yes. Retirement accounts typically count at a lower percentage of value than cash before age 59½, since early withdrawals usually carry a penalty, and at a higher percentage once penalty-free access kicks in. Account type and access restrictions both factor into the discount a lender applies.
Can asset depletion income be combined with rental income from an investment property?
It depends on the loan structure. Asset depletion is typically used for primary or second-home qualification within the asset allowance framework; for investment property purchases, a DSCR loan qualifying on the property’s own rent is usually the more direct path, though a strong liquid asset position can sometimes serve as a compensating factor on a marginal file, subject to lender guidelines.
What happens if my investment account value drops between application and closing?
Qualifying income is generally based on current statement values at the time of underwriting, not a projection. A meaningful drop in account value before closing can change the qualifying calculation, which is one reason lenders re-verify assets close to closing on larger files.
Is asset depletion only for retirees?
No. It’s most associated with retirees because they often have strong portfolios and modest taxable income, but business owners, investors, and anyone whose conventional personal-income paperwork understate their actual liquidity can use it too — the underwriting question is about liquid assets, not life stage.
Why doesn’t home equity count toward asset depletion?
Because the calculation is built on assets that can be deployed as cash on a monthly basis, and home equity can’t be spent without selling or refinancing. A cash-out refinance or a separate financing structure is the tool for converting real estate equity into usable funds.
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. Scotsman Guide — Remove the Shroud of Mystery on These Loans
2. CFPB Ability-to-Repay Summary
3. CFPB Ask CFPB — Ability-to-Repay Rule
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.
