Asset Depletion Mortgages In Rosemary Beach — The Quick Read: This is an income-calculation method, not a separate loan product. A lender takes your verified liquid assets, applies a discount by account type, subtracts what you need for closing and reserves, and divides what’s left by a set number of months to produce a monthly qualifying-income figure. It’s built for investors and high-net-worth borrowers whose traditional personal-income documentation understate what they actually have. You never sell anything — the math is notional, and the assets stay invested.
Asset depletion shows up wherever a buyer’s balance sheet doesn’t match their tax return: a founder who wrote off most of last year’s profit, a retiree living on a portfolio instead of a paycheck, someone who just sold a business and has no W-2 to show for it. This piece walks through how the calculation actually runs, where lenders differ, and where the rule breaks down in ways that catch people off guard.
Key Terms Defined
Asset depletion (or asset dissipation): a way of turning liquid savings and investments into a monthly income number for loan qualification, instead of using pay stubs or traditional personal-income documentation.
Haircut: the percentage discount a lender applies to an asset before counting it — cash is trusted almost fully, retirement money less so, because of taxes and access rules.
Divisor: the number of months a lender divides your eligible assets by to get a monthly income figure. This single number decides more of the outcome than anything else in the calculation.
Liquid assets: cash, checking, savings, brokerage, and retirement balances that can actually be turned into money — home equity does not count here.
Business-purpose loan: a loan made to an investment property rather than a home you live in. These are underwritten differently than a standard owner-occupied mortgage.
How Underwriting Actually Treats It
The math runs in a fixed order: inventory the accounts, discount each one, subtract what’s needed for the deal, then divide the remainder by a set number of months.
Start with every account the borrower wants counted: checking, savings, brokerage, retirement. A tidy file with five statements from two institutions moves through underwriting far more smoothly than fifteen statements scattered across eight banks. Retirement accounts held by people under 59½ get discounted more heavily than accounts held by people past that age. That’s because early withdrawals trigger both ordinary income tax and a 10 percent penalty under IRS rules — IRS guidance on IRA early withdrawal spells this out directly. Lenders back that penalty exposure out of the eligible balance before dividing anything.
Next comes the subtraction: whatever the borrower needs for down payment, closing costs, and required post-closing reserves comes off the top. What’s left is the eligible pool. Then the divisor does its work — and this is where programs diverge the most.
A shorter divisor produces a bigger monthly income number from the same pile of assets. That’s the whole trick, and it’s also the biggest single source of variation across the non-QM world — divisors, haircuts, age thresholds, and eligible account types all differ from one lender’s guidelines to the next. There is no universal number here, and any source that tells you otherwise is oversimplifying.
One mistake shows up constantly on these files: using the same account for both the income calculation and the reserves the lender wants held back after closing. Split those two functions cleanly — reserve money in one bucket, qualifying assets in another. This avoids the most common documentation kickback on asset-based files.
Sizes And Structures Across The Wholesale Network
Across the wholesale network, this qualification method gets applied to loan amounts from $300,000 up to $30,000,000, split across two different portfolio programs — a non-QM bank-statement style program that carries files to $6,000,000, and a bank portfolio program built for larger twelve-month-statement files that runs its own leverage ladder to $30,000,000 (65% to $5,000,000, 60% to $10,000,000, 55% to $30,000,000, interest-only capped at 60% or the band ceiling, whichever comes first). These are two distinct ladders, not one continuous scale — the bank program’s tier begins above $4,000,000 and overlaps the portfolio program through $6,000,000, then stands alone above that. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Leverage on a primary residence steps down as the loan gets bigger: 90% up to $1,000,000, 85% to $2,000,000, 80% to $3,000,000, and 75% at the top credit tier through $4,000,000. Above $4,000,000, every file goes through case-by-case review before it’s even submitted — there’s no flat “up to” figure that applies past that point. Second homes and investment properties generally run about five points lower than the primary-residence numbers at every size band.
Two documented paths exist for the income side. An asset allowance divides liquid assets by 36, 60, or 84 months depending on how the file is structured — the longer 84-month divisor applies when asset income stands alone or the loan exceeds $3,500,000. An assets-only path skips debt-to-income math entirely, but requires U.S. liquid assets equal to the loan amount plus closing costs plus reserves for any negative cash flow elsewhere in the portfolio.
Credit sits at a 660 floor on the portfolio side of the network, 700 above the super-jumbo threshold. Debt-to-income can run as high as 50%. Reserves scale with loan size: three months of payment reserves up to $500,000, six months to $1,500,000, nine months above that — plus two additional months for every other financed property the borrower owns, capped at twelve months. Cash-out is unrestricted at or below 60% loan-to-value; above that, the portfolio program caps cash proceeds at $1,500,000.
Here’s some context on the regulatory backdrop. The CFPB’s Ability-to-Repay rule requires lenders to weigh eight underwriting factors, including current assets. But the rule doesn’t require one specific model for doing this. That gives asset-based programs legal room to operate. The CFPB’s later rule removing Appendix Q gave non-QM lenders even more freedom to build their own formulas instead of borrowing an agency template.
Where The General Rule Breaks
Retirement accounts count for less before age 59½, because of the tax penalty exposure described above — the same balance can produce meaningfully less qualifying income depending on the borrower’s birthdate, independent of anything else on the file.
Home equity never counts, no matter how much of it exists. The calculation runs on liquid assets only. A borrower sitting on substantial paid-off real estate but light on cash and brokerage holdings won’t see that equity show up anywhere in the depletion math — it simply isn’t eligible.
Cryptocurrency doesn’t count either, on the agency-adjacent side of this world, even after it’s converted to cash. That’s a hard exclusion, not a sliding discount, and it trips up borrowers who assume liquidity alone is the test.
Business funds, gifts, trusts other than a revocable living trust, and unvested stock also fall outside eligible assets in the wholesale guidelines used here. Retirement accounts count at 70%, stepping up to 80% once the borrower clears 59½.
Short-term rental income can’t be substituted into the standard rent-support paperwork used on investment-property files — a rent schedule is built for long-term lease income, not nightly booking rates, so a resort or vacation-rental purchase needs separate revenue documentation rather than the usual appraisal exhibit. And on larger investment-property files, crossing roughly $2,000,000 changes the appraisal requirement rather than the reserve count — files above that mark commonly need two independent appraisals, since the appraiser’s rent estimate feeds directly into the income calculation.
The Investor Decision
For a rental-property investor, asset depletion is usually a supporting tool, not the main event. It’s rarely the reason a purchase closes on its own.
DSCR loans already let borrowers qualify mainly on property-level rental income that covers the payment, subject to lender guidelines. Borrowers don’t need to provide traditional personal-income documents, W-2s, or pay stubs for this method. Asset depletion fills the gaps around that: it can help someone qualify for a personal residence while building a rental portfolio, bridge a personal-guarantee requirement, or support a purchase where a standard rent-based path doesn’t fit cleanly. DSCR loans are business-purpose investor loans for non-owner-occupied property, so lenders review them under a different framework than a standard owner-occupied mortgage.
This method fits three groups best: business owners who legally minimize adjusted gross income, people who just closed a liquidity event and now have irregular income, and high-net-worth buyers whose distributions don’t look like a steady paycheck on paper. None of these borrowers are asset-poor. They’re just tax-return-thin.
The practical upside is that nothing gets liquidated. The borrower keeps full ownership and control of every account used in the calculation — it’s a translation of the balance sheet into a number a lender can use, not a demand to cash anything out. That preserves compounding and avoids triggering a taxable event just to manufacture qualifying income. Tax treatment can still depend on how funds are used and how a property is held; investors should keep clean records and talk to a tax professional before relying on any deduction assumption.
For investors curious how loan-out or royalty-style income interacts with an asset-based file, how loan-out income counts on an asset depletion mortgage walks through that specific scenario in more detail.
Frequently Asked Questions
Do I have to actually sell my investments to qualify this way?
No. The calculation is notional — it demonstrates a theoretical ability to make payments over the loan term without requiring you to touch the underlying accounts. You keep full ownership and control of every asset used in the math.
Is there one standard divisor every lender uses?
No, and that’s the single biggest source of confusion on these files. Divisors, haircuts, and eligible account types vary by lender and program; some divide by shorter periods than others, which changes the resulting qualifying income significantly on the same asset pool.
Does home equity count toward the asset total?
No. Only liquid assets — cash, brokerage, and retirement balances — feed into the calculation. Real estate equity, no matter how substantial, isn’t eligible.
Can I use this method for an investment property instead of a DSCR loan?
It’s possible in certain structures, but most rental-property investors are better served by a DSCR loan, which qualifies primarily on the property’s own rental income rather than personal assets or traditional income documentation. Asset depletion tends to fill gaps around a DSCR file rather than replace it — for example, when qualifying for a personal residence purchase alongside a rental portfolio.
Why does age 59½ matter so much in this calculation?
Because withdrawals from retirement accounts before that age trigger a 10 percent early withdrawal penalty on top of ordinary income tax, per IRS guidance. Lenders build that penalty exposure into the discount they apply, so pre-59½ balances typically count for less than post-59½ balances of the same size.
If you’re weighing an asset-based path against a straightforward DSCR purchase or refinance, Lendmire can help compare how the leverage, documentation, and qualifying method line up against your specific portfolio and goals.
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 is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 40 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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References
1. IRS Newsroom — IRA Early Withdrawal
2. CFPB Ability-to-Repay Rule Summary
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.
