Asset Depletion Mortgages In Pebble Beach — The Quick Read: An asset depletion mortgage turns a borrower’s liquid savings into a qualifying income figure, so a lender can approve a loan without a W-2 or a stack of traditional personal-income documentation. The lender takes eligible cash, investments, and retirement funds, applies a divisor, and treats the result as monthly income for underwriting. It solves a specific problem: a buyer with real wealth but thin reportable income, often in a high-price coastal market where the loan size outruns what a paycheck could support. This piece walks through the mechanics, the eligible-asset rules, the edge cases, and how the tool fits alongside a DSCR loan for investors.
Key Takeaways
- Asset depletion converts liquid assets into a hypothetical income number for underwriting — it is not a withdrawal plan, and the money stays invested.
- The divisor (the number of months assets get spread across) is the single biggest lever in the calculation, and it varies sharply by program.
- Retirement funds, unvested stock, cryptocurrency, and real estate equity get treated very differently depending on the lender.
- In markets where home prices dwarf typical traditional employment income, asset-based qualification and DSCR financing often get used together on the same purchase.
- Every figure in this piece describing loan sizing, leverage, or documentation reflects select wholesale-network guidelines and is subject to full underwriting.
What Counts as Income When You Don’t Have a Paycheck?
The federal rule that governs mortgage underwriting doesn’t actually require a paycheck. Instead, it requires a lender to make a good-faith judgment that a borrower can repay the loan. The underlying factor list a lender must weigh includes “current or reasonably expected income or assets,” not income alone. That single word — “or” — is the legal room asset-based qualification lives in.
For a buyer whose wealth sits in a brokerage account, a sold business, or a retirement fund rather than a salary, that distinction matters. A retiree with several million dollars in investments may show almost no taxable income on a return. A founder who just sold a company may have a single large deposit and nothing recurring. Both can be genuinely strong credit risks. Traditional income underwriting just isn’t built to see it.
Key Terms Defined
Asset depletion is a qualification method that converts a borrower’s liquid assets into a calculated monthly income figure for underwriting purposes.
Divisor is the number of months a lender spreads an asset pool across to produce that monthly figure — a shorter divisor produces a bigger number from the same assets.
Liquid assets are funds that can be sold or accessed on a reasonable timeline: checking, savings, money market, CDs, brokerage holdings, and (with limits) retirement accounts.
Debt-to-income (DTI) is the share of a borrower’s monthly obligations against their qualifying income, whether that income comes from a paycheck or an asset calculation.
Reserves are the extra months of housing payments a borrower must have left over, undisturbed, after closing.
Non-QM stands for non-qualified mortgage — a loan built outside the standard conforming rulebook, which is why asset depletion, bank-statement, and DSCR programs all live in the non-QM world.
How the Math Actually Works, Step by Step
The calculation runs the same basic sequence across almost every program, even though the exact numbers differ.
Step 1 — Identify eligible assets. Checking, savings, brokerage, and retirement balances form the starting pool. Retirement accounts typically get discounted before they’re counted at all, since access before a certain age can trigger taxes or penalties.
Step 2 — Subtract what’s already spoken for. Down payment, closing costs, and any required reserves come off the top before the math starts. What’s left is the pool that actually gets divided.
Step 3 — Apply the divisor. This is where programs diverge the most. A shorter divisor spreads the same asset pool across fewer months, which produces a larger monthly qualifying figure. A longer divisor does the opposite. Two borrowers with identical account balances can land on very different approval outcomes purely because of which divisor their lender uses.
Step 4 — Run it through ordinary underwriting. The resulting number isn’t a stand-alone approval. It gets layered into standard debt-to-income review alongside credit history, reserves, and the property itself, and it can be combined with documented Social Security, pension, or part-time income where a program allows it.
Step 5 — Document everything. Full statement sets — every page, not summary pages — across whatever lookback period the program requires, sourcing letters for large or unusual deposits, and proof that retirement funds are actually accessible are standard across the board.
The Two Paths in Lendmire’s Network
Through select lenders in its wholesale network, Lendmire arranges asset-based qualification along two distinct structures, each built for a different borrower shape.
| Feature | Asset Allowance | Assets-Only |
|---|---|---|
| Divisor | 36 or 60 months (supplemental) or 84 months | No divisor — assets must cover the loan directly |
| DTI required | Yes, up to 60% for the shorter divisors | None — DTI is not calculated |
| Property types | Primary and second homes only, to 80% LTV | Varies by program, subject to underwriting |
| Asset threshold | Liquid assets divided by the divisor supports payment | Liquid U.S. assets must equal the loan amount, plus closing costs, plus 60 months of any net loss on other owned residential property |
The 84-month divisor generally applies on its own, or on any loan above $3,500,000, through select wholesale programs and subject to full underwriting. That’s meaningfully longer than some divisors reported elsewhere in the market. Industry reporting on published wholesale guidelines shows divisor periods across the space ranging as short as roughly 60 to 84 months on some programs. A shorter divisor produces a noticeably larger qualifying figure from the same asset pool than an 84-month calculation does. Here’s the takeaway for a borrower shopping this product: the divisor isn’t a minor technical footnote. It’s usually the difference between a file that clears and one that doesn’t.
Which Assets Count — and Which Don’t
Not every dollar on a balance sheet qualifies, and this is where a lot of borrowers get surprised.
Some assets typically count, through select wholesale programs. These include checking, savings, money market, CDs, and brokerage holdings at full value. Retirement accounts count at 70% of value. That goes up to 80% if the borrower is 59½ or older, since they can access the funds more easily without a penalty.
Some assets typically don’t count, across nearly every program in the market. These include business funds, gift funds, trusts other than a revocable living trust, unvested stock or restricted stock units, and cryptocurrency. Real estate equity and closely held business ownership generally get excluded too. The reason is simple: this approach needs an asset that can be sold or drawn down on a monthly schedule. Property equity and private business stakes don’t work that way.
Where the General Rule Breaks: Edge Cases
Cryptocurrency is close to a universal exclusion. Whatever a borrower holds in digital assets, expect it to sit outside the calculation entirely, regardless of program.
Vesting matters more than most borrowers expect. Stock options and RSUs that haven’t converted into owned, sellable shares generally don’t count, even if the paper value looks substantial.
Agency guidelines run far more conservative than the non-QM market they don’t govern. Reporting on published guide language shows Fannie Mae ties its own asset divisor to loan term — 360 months on a 30-year loan — while Freddie Mac moved its divisor from 360 to 240 months in a prior guide update after concluding the earlier calculation was too restrictive. Neither of those numbers applies to a DSCR or non-QM asset-based file; conforming and non-QM asset programs are separate rulebooks entirely.
Above certain loan sizes, everything gets a closer look, regardless of the math. On the super-jumbo side of the market, files above roughly $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property, typically carry added overlays. These include a higher credit floor, a longer credit-event seasoning window, and no cash-out proceeds counted toward reserves. Loans above $4,000,000 generally get reviewed case by case before submission, rather than fit into a standard grid.
Lendmire’s practitioner note: in a market like this, the file that struggles usually isn’t the one with modest assets and a clean story — it’s the one with a complicated one. A borrower with funds split across three trust structures, a recent business sale still in escrow, and a chunk of restricted stock will often need more time and more documentation than a borrower with a single large brokerage account, even if the total dollar figure looks smaller.
An Illustrative Case: A High-Price Coastal Market
Coastal luxury markets are where asset depletion tends to earn its keep. That’s because loan sizes routinely outrun what a documented salary would support — even for buyers who are genuinely wealthy. Pebble Beach is a useful illustration, not a national benchmark. Homes there were listed at a median price of $4.29M as of a recent snapshot, per Movoto. Meanwhile, the neighboring Del Monte Forest area posted a median sale price of $2.6M, down 24.1% year over year, per Redfin. These swings alone show why a single year of traditional personal-income documentation rarely tells the full story of a buyer’s financial strength in a market like this.
An investor thinking about buying a rental in the same area also needs to check the rules for short-term-rental permits. Don’t assume you’ll earn rental income before you do this. Several California coastal counties — including Monterey County — require a discretionary permit for stays under 30 consecutive days in certain zoning districts. This is per the County of Monterey. Short-term rental rules can vary by city, county, HOA, and property type. So investors should confirm local rules before counting on projected rental income for any purchase.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Asset Depletion vs. DSCR: Different Tools for Different Problems
They solve different documentation problems, and they’re frequently used together rather than competing. Asset depletion qualifies the person’s balance sheet for a primary or second home purchase; a DSCR loan is reviewed for the property’s rental income for an investment purchase, without touching the borrower’s personal financials at all. Investors weighing which one fits their next deal can start with Lendmire’s complete DSCR loans guide for a full breakdown of how the property-income test works.
Here’s a common pattern across Lendmire’s wholesale network: a buyer uses asset strength to cover the down payment and reserves comfortably. Meanwhile, the ongoing debt-service qualification on a rental property runs on the DSCR test instead. Neither program touches the buyer’s actual investment portfolio.
What the Investor Decision Looks Like in Practice
A borrower evaluating this path is really answering three questions.
First: is the goal a primary residence, a second home, or an investment property? Asset Allowance is built for primary and second homes only, to 80% LTV, through select wholesale programs, subject to full underwriting. An investment purchase generally routes toward a DSCR structure instead.
Second: how liquid is the asset base, and how much of it counts? A portfolio heavy in vested brokerage holdings and seasoned retirement accounts sails through easier than one loaded with restricted stock, business funds, or crypto.
Third: what’s the loan size, and does it cross into case-by-case territory? Files climbing past the roughly $3,500,000 to $4,000,000 range on a primary residence should expect closer underwriting scrutiny, longer documentation requests, and terms set individually rather than off a published grid.
Credit generally needs to clear a 660 floor on standard non-QM asset programs, rising to 700 above the super-jumbo threshold, with debt-to-income allowed up to 50% where DTI applies at all. Reserve requirements typically scale with loan size — often 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above that — through select wholesale programs, subject to full underwriting.
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.
Frequently Asked Questions
Does asset depletion mean I have to spend down my savings?
No. The calculation produces a hypothetical income figure for underwriting purposes only. It is not a withdrawal schedule, and the borrower’s portfolio stays invested and untouched through the process.
Can I use my 401(k) or IRA to qualify?
Often, yes, but not at full value. Retirement funds typically count at around 70% of balance, rising to roughly 80% for borrowers 59½ or older, through select wholesale programs, subject to underwriting.
Does cryptocurrency count as an asset for this calculation?
Generally no. Digital-asset holdings are excluded across nearly every program in the market, regardless of the total balance.
Is asset depletion the same thing as a DSCR loan?
No. Asset depletion qualifies the borrower’s balance sheet, usually for a primary or second home. A DSCR loan is reviewed for the rental property’s own income, and the two are often paired on the same investor’s overall financing plan.
What loan sizes can this actually support?
Through select wholesale programs, non-QM portfolio structures generally run from $300,000 up to $6,000,000, with a separate bank-statement portfolio ladder carrying twelve-month-statement files as high as $30,000,000 at lower leverage tiers. Every figure is subject to full underwriting.
Investors or borrowers who want to see how an asset-based path or a DSCR structure fits a specific purchase can reach Lendmire at 828-256-2183 or request a quote to compare options against credit profile, property type, and available liquidity.
Investors who want the broader program framework can review how DSCR loans work.
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.
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
1. Movoto — Pebble Beach, CA Homes for Sale
2. Redfin — Del Monte Forest/Pebble Beach Housing Market
3. County of Monterey — Short Term Rentals Permit Center Page
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.
