Asset Depletion Mortgages In Ohio: Assets, Not Income

The Quick Read: Asset depletion is an underwriting method, not a loan product — it converts liquid assets into a hypothetical income figure so a lender can measure repayment ability without relying on traditional personal-income documentation or a paycheck. There’s no single federal formula; every non-QM program builds its own divisor and asset list. Ohio borrowers qualify under the same national mechanics as anywhere else, since no state law changes how assets are converted to income. This article covers the mechanics, the structures, the edge cases, and where the general rule breaks down.

Before going further, here’s a quick note on scope: this is a national explainer on how asset depletion underwriting works. Ohio doesn’t have its own asset-depletion law. The rules described here apply the same way no matter where the property sits — whether that’s Columbus or anywhere else. Lendmire’s consumer mortgage lending operates in 16 states, including Ohio. So borrowers there follow the same wholesale-network guidelines discussed below, subject to full underwriting on every file.

What “Asset Depletion” Actually Means

There’s no separate federal rule that creates an “asset depletion loan.” Instead, this method exists because the federal truth-in-lending rulebook allows room for it under repayment-capacity underwriting. The federal consumer-finance regulator’s own compliance guide confirms this: lenders can weigh assets the same way they weigh income when deciding if a borrower can repay a mortgage. Income doesn’t need to come from a salary or a full-time job to count.

Bank regulators actually give a clearer technical description than consumer-protection rules do. The OCC’s 2019 bulletin on asset dissipation underwriting defines it this way: it turns a borrower’s assets into a hypothetical cash annuity stream, adds that to any other income, and uses the total to qualify the borrower. Lenders use this most often for high-net-worth applicants — people with real wealth but not enough cash flow to qualify under standard income rules. In short: asset-rich, but income-thin on paper.

Neither regulator hands lenders a formula. The bulletin only suggests it would be prudent to tie the dissipation period to a term similar to other residential loans. That silence is exactly why every non-QM lender in the market runs its own math — there’s no agency rulebook forcing consistency.

Key Terms Defined

Asset dissipation/depletion underwriting (ADU): a method that converts a borrower’s liquid assets into a hypothetical monthly income figure for qualifying purposes, rather than relying on wages or self-employment earnings.

Divisor: the number of months a lender divides an eligible asset balance by to produce that hypothetical monthly income figure — commonly a fixed period like 36, 60, or 84 months, chosen by the individual program.

Repayment-capacity: the federal standard requiring a lender to make a reasonable, good-faith determination that a borrower can repay a mortgage before extending credit.

Reserves: liquid funds a borrower must have left over after closing, held separately from any assets used to generate qualifying income.

Assets-only qualification: a structure that skips debt-to-income math entirely and instead requires liquid assets equal to the loan amount plus closing costs.

How Underwriting Actually Treats It, Step by Step

The sequence is consistent across the non-QM market even though the numbers differ program to program.

Step 1 — Inventory eligible assets. Checking, savings, money market, brokerage, and vested retirement accounts form the core pool. Real estate equity doesn’t count, and business accounts generally sit outside the income calculation even when they can help fund a down payment.

Step 2 — Apply haircuts by asset class. Cash accounts count near full value. Market-based holdings like stocks and mutual funds get discounted for volatility. Retirement accounts get discounted further to account for taxes and early-withdrawal penalties — through select lenders in Lendmire’s wholesale network, retirement balances typically count at 70%, stepping up to 80% once a borrower reaches age 59½.

Step 3 — Subtract funds already spoken for. Anything earmarked for the down payment, closing costs, or required reserves gets carved out before the income math runs. The same dollar can’t fund the closing and generate qualifying income at the same time — this is the single most common structuring mistake practitioners flag on these files.

Step 4 — Apply the divisor. The remaining eligible balance gets divided by a set number of months to produce a monthly qualifying-income figure. Through select lenders in Lendmire’s wholesale network, this typically runs on a 36-month divisor when the resulting income supplements other income and debt-to-income sits at or below 60%, a 60-month divisor when DTI runs above that, or an 84-month divisor for a standalone asset-based file or any loan above $3,500,000.

Step 5 — Run it through DTI, or skip DTI altogether. In an asset-allowance structure, the derived monthly figure blends into a standard debt-to-income calculation alongside any other income. In an assets-only structure, DTI gets skipped entirely — the borrower instead needs liquid U.S. assets equal to the loan amount, closing costs, and, if another residential property runs at a net loss, sixty months of that shortfall.

Documentation generally means several consecutive months of verified statements — no gaps, no summarized transaction histories — plus a clear paper trail on any large or recent deposit.

The Structures and Variations

Across the non-QM landscape, three structures show up repeatedly, and they’re not interchangeable.

The asset-allowance structure is the most common option. It supplements other income instead of replacing it entirely. Most self-employed or recently retired borrowers use this version when they have some documented income, but not quite enough to clear conventional debt-to-income math on its own.

The assets-only structure removes DTI from the equation. It fits a borrower with deep, verifiable liquidity but little or no reportable income at all — a business owner who just sold a company, for example, with proceeds sitting in a brokerage account.

A profit-and-loss or bank-statement path also exists, running alongside these options for self-employed borrowers. This path works well when their bank deposits tell a stronger story than their traditional income paperwork. Through select lenders in Lendmire’s wholesale network, this works two ways. First, qualifying income can come from 12 or 24 consecutive months of bank statements. Lenders then run this through a fixed expense ratio, which changes based on staffing and business type. The ratio is lower for a service business with no employees, higher for one with a small staff, and higher still for a business with more employees or any product-based business. Second, lenders can use a profit-and-loss method, capped at a set percentage of stated income. Either way, transfers from the borrower’s own business into their personal account count in full, at 100%.

Loan sizing under these programs runs from $300,000 to $30,000,000 through two separate wholesale ladders — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that carries twelve-month-statement files to $30,000,000 on its own scale: 65% at or below $5,000,000, 60% at or below $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% or the band’s own ceiling, whichever is lower. Leverage on a primary residence steps down as the loan gets bigger — 90% at or below $1,000,000, 85% at or below $2,000,000, 80% at or below $3,000,000, and 75% at the top credit tier through $4,000,000. Above $4,000,000, every file gets reviewed case by case before submission — never assume a flat percentage applies at that size. Second homes and investment properties run roughly five points lower at every band.

Where the General Rule Breaks: Named Edge Cases

Excluded is not the same as discounted. Some assets aren’t haircut — they’re removed from the pool entirely. Business funds, gift funds, most trust structures other than a revocable living trust, unvested stock, and cryptocurrency never count, no matter how liquid they look on a statement. No haircut percentage brings an excluded asset back into eligibility.

Age changes retirement treatment. A borrower under 59½ counts retirement funds at a lower percentage than one over that threshold, because early withdrawal triggers real tax and penalty costs that reduce spendable value.

Occupancy matters more than most borrowers expect. Asset depletion, as a personal ability-to-repay tool, can be used on owner-occupied purchases, second homes and investment properties, but it qualifies the borrower’s balance sheet, not the rental property’s own cash flow. That’s a structurally different question from a business-purpose loan, and it’s worth reading the complete DSCR loans guide to see how property-income underwriting works when the subject property itself is the collateral being tested, not the borrower’s personal balance sheet.

Double-counting is a common mistake. Using the same account balance for both qualifying income and required post-closing reserves shows up repeatedly across practitioner files as the single most frequent structuring error. Through select lenders in Lendmire’s wholesale network, reserve requirements typically run 3 months of payments on loans at or below $500,000, 6 months at or below $1,500,000, and 9 months above that, plus 2 additional months per other financed property up to a 12-month cap — and cash-out proceeds can never satisfy that reserve requirement.

Above $4,000,000, nothing is assumed. Every file crosses that line into case-by-case review before it even goes to submission — leverage, documentation depth, and eligible-asset scope all get evaluated individually rather than pulled off a published grid.

The Investor Decision in Practice

Picture an investor who recently sold a business. They now hold roughly $2.4 million in liquid, non-retirement brokerage assets, but their reportable income on paper is modest. First, the lender sets aside money for closing costs and required reserves. Then the remaining eligible balance gets divided — by 36 months, 60 months or 84 months. Which one depends on whether this income needs to stand alone or just supplement other income. That result becomes the monthly qualifying income used in debt-to-income math. The exact dollar amount depends entirely on the eligible balance and which divisor is used. That’s why every file gets modeled individually — you can’t just estimate it with a rule of thumb.

Now run the same investor’s situation forward: say that same person also owns a rental property whose lease doesn’t clear a lender’s minimum coverage ratio on its own. Asset depletion, in select scenarios, can supplement — not replace — the property’s income test when a rental’s cash flow falls short of a minimum coverage threshold. That’s a narrow use case, and it’s a different conversation from qualifying a purchase purely on the strength of a personal balance sheet.

The broader market context matters here too. Asset-based and cash-flow-based qualification paths are becoming a bigger, more mainstream part of investor financing — not just a niche workaround. That’s worth knowing before you assume a conventional lender is the only option on the table.

Investors often juggle more than one type of financing at once. One example: a primary home bought using assets, plus a rental portfolio qualified on rental income. If you want to see how this works in other high-net-worth markets, check out the Boulder asset depletion breakdown and the Atherton asset depletion breakdown. Both explain the same national rules, just applied to different types of borrowers.

If you’re weighing whether a purchase should qualify on personal assets or on a rental property’s own income, Lendmire can help you compare options based on the property’s cash flow, your asset position, credit profile, and leverage goals.

For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 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.

References

1. CFPB Ability-to-Repay/QM Small Entity Compliance Guide

2. OCC Bulletin 2019-36