The Quick Read: The two paths answer different questions. The asset qualifier path asks whether your eligible assets cover the entire loan, with no income documented. The asset depletion path turns your assets into monthly income, then tests that income against the housing payment and your other debts. A borrower is reviewed on one path at a time, subject to underwriting.
- Asset qualifier: eligible assets must equal or exceed the whole loan. Up to 80% on a purchase and 75% on a refinance, through select programs.
- Asset depletion: usable assets divided by 60 months become qualifying income. It also covers investment property, at lower leverage.
- Retirement money counts differently: on the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% after. On the depletion path, it counts at 70% at any age.
- Both paths document the assets. “No income documentation” never means “no documentation.” Think no traditional personal-income documentation, pay stubs or employment verification.
- Names vary by lender. Compare the divisor and the test, not the label.
The Honest Answer: Who Each Path Is For
If your portfolio is large relative to the loan, the asset qualifier path is usually the cleaner fit. Your assets cover the loan outright, and nobody asks about pensions, Social Security or RMDs. If your portfolio is large but the loan is larger, or you are buying an investment property, the asset depletion path is the one that works. It converts assets into income, so the loan only has to fit a debt-to-income test.
Think of it as two questions. Can your assets cover this entire loan? Or can your assets generate enough monthly income to carry this payment?
Across our wholesale network, we see retirees land on the qualifier path when they are downsizing, buying a second home with sale proceeds, or sitting on a big brokerage account. They land on the depletion path when the loan is large compared with liquid assets, or when the property is a rental.
This page is for a California borrower, but the program figures below do not change by state. California appears here as your situation: high-priced coastal counties, large loan sizes, and retirees who often hold more in a home and a 401(k) than in cash.
Side-by-Side
The qualifier column reflects the program in Lendmire’s guidelines. Terminology varies across the industry, so some lenders use these labels differently. Every figure is subject to underwriting and is available only through select programs.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Review basis | Eligible assets cover the whole loan | Assets ÷ 60 months = income, tested by DTI |
| Income documented | None | Derived from assets (can supplement real income) |
| Property types | Principal residence, second home | Principal residence, second home, investment property |
| Leverage | Up to 80% purchase, 75% refinance | 80% purchase or rate-and-term, 60% cash-out (residence/second home); 65% and 60% (investment) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Retirement accounts | 90% under 59½, 100% at 59½+ | 70% at any age |
| Seasoning | 60 days; two months of statements per account | Statements 120+ days old plus one within 45 days |
| Credit | 600 minimum | The lender’s matrix |
| Reserves | None at or below 75% LTV | No published reserve months |
| Minimum assets | Assets must cover the loan | Lesser of $1,000,000 or 1.25x the loan; never below $250,000 liquid if sole income |
How Each Path Actually Works
Asset qualifier. The lender adds up your eligible balances after the credit percentages. If the total equals or exceeds the entire loan, you qualify on assets alone. Brokerage, CDs, money market and savings count at 100%. Accounts combine.
Here is an illustration. Say the loan is $800,000. You hold $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That is $800,000 of usable assets, which covers the loan. The lender’s own calculation governs.
Asset depletion. The lender applies haircuts, divides what is left by 60 months, and treats the result as monthly income. That income then carries the full housing payment and your other debts through the debt-to-income test.
Illustration: $1,500,000 in securities at 80% is $1,200,000. Add $300,000 in cash at 100%. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. The lender’s own calculation governs.
Your assets are not sold or frozen on either path. They are counted, not spent. Cash-out proceeds from the loan never count as qualifying assets.
When Asset Qualifier Is the Better Fit
Choose the qualifier path when:
- The loan is small next to your portfolio. Assets must meet or exceed the whole loan, so this path rewards deep balances.
- Your money sits in a 401(k) or IRA. Retirement accounts count at 90% under age 59½ and 100% once you reach 59½. That beats the 70% haircut on the depletion path.
- You want no income conversion at all. No employment or income is documented, which helps if your income is irregular or shrinking by design.
- You have no debt-ratio room. The depletion path runs through a debt-to-income test. The qualifier path does not document income, so the lender’s ability-to-repay review rests on the assets.
- You are borrowing at 75% loan-to-value or less. On the qualifier path, no reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
The tradeoffs are real. Leverage tops out at 80% on a purchase and 75% on a refinance. Cash-out terms on this path are set by the lender, so do not plan around them. And the assets must be seasoned: 60 days in the account, with two months of statements for each one.
When Asset Depletion Is the Better Fit
Choose the depletion path when:
- The loan is bigger than your liquid assets. Dividing by 60 months can support a payment that outright coverage cannot.
- You are buying an investment property. This is the only one of the two paths that covers it, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
- You want a cash-out refinance on a home. Up to 60% on a principal residence or second home, subject to underwriting.
- You also have Social Security, a pension or RMDs. Asset income can supplement documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived.
- Your assets are more varied. The depletion path counts securities at 80%, private stock at 75%, and real-estate equity at 60%.
The tradeoffs: a 70% haircut on retirement accounts at any age, minimums of the lesser of $1,000,000 or 1.25 times the loan (and never below $250,000 liquid when it is your only income), and a first-time investor needs a 700 score. Several asset types are not eligible: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies.
Cryptocurrency, precious metals and collectibles are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
A California Retiree Walkthrough
Picture a retiree in a high-priced coastal county, age 62, with a brokerage account, a rollover IRA, and a savings balance, plus Social Security. The question is which path fits.
On the qualifier path, the IRA counts at 100% because she is past 59½, and the brokerage and savings count in full. If the total clears the entire loan, she is done: no income conversion.
If the total falls short, she shifts to the depletion path. Now the IRA counts at 70%, securities at 80%, and cash at 100%. The usable total divides by 60 months. Her Social Security can sit alongside it, up to a 45% debt-to-income ratio.
She is on one path at a time, never a blend. A retiree under 59½ sees the 90% qualifier credit instead of 100%, which shifts the math.
Across the programs we place files with, the typical surprise is the haircut on retirement money. A large IRA can look like the biggest asset and still produce the smallest depletion income.
The Naming Problem
Neither term is a regulated product. Both are underwriting methods in non-QM lending, meaning loans outside the standard qualified-mortgage box. Federal ability-to-repay rules require lenders to verify the income or assets they rely on using third-party records. They do not set a divisor or a formula.
That is why one lender’s asset qualifier is another’s asset depletion. The rule leaves wide room. Many borrowers hear different names for the same math, or the same name for different math.
When you compare, ask four things:
1. What divisor converts assets to income?
2. What percentage does each account type count at, and does age matter for retirement money?
3. Which ratio is tested: debt-to-income, or asset coverage of the loan?
4. How many assets must remain after closing?
Names alone do not tell you. The answers do.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, must cover the entire loan. No income is documented.
Asset depletion: a path that divides usable assets by 60 months to produce monthly qualifying income, then tests that income against debts.
Haircut: the share of a balance a lender does not count, because the asset can lose value or is hard to reach.
Seasoning: how long funds must have sat in an account before they count.
Debt-to-income ratio (DTI): monthly debts, including the new housing payment, divided by monthly income.
Non-QM: a mortgage that falls outside the qualified-mortgage box, which lets lenders use methods like assets-only underwriting.
Verdict: Match the Path to the Constraint
Neither path is better in general. Ask which constraint binds you.
If you hold deep, seasoned balances and the loan is modest by comparison, the qualifier path is simpler and credits retirement money more generously. If the loan is large, the property is a rental, or you want cash-out, the depletion path is the one that can work. The asset-based mortgage is a consumer loan, and a wholesale network can place either path with a lender whose guidelines fit your statements.
If a rental purchase should qualify on the property’s rent instead, a separate business-purpose investor loan may fit better. It is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Do I have to sell my investments?
No. Both paths count your balances without liquidating them. Closing funds come out of the pool first, and cash-out proceeds from the new loan never count as qualifying assets. Your portfolio stays invested, subject to underwriting.
Do retirement accounts count?
Yes, on both paths, but differently. The qualifier path counts a 401(k) or IRA at 90% under age 59½ and 100% at 59½ or older. The depletion path counts retirement accounts at 70% at any age.
Can I use both paths together?
No. A borrower is qualified on one path at a time, and the tables never blend. You can, however, supplement documented income with asset-derived income on the depletion path, up to a 45% debt-to-income ratio.
Does “no income documentation” mean “no documentation”?
No. Your assets are documented on both paths with account statements, and federal rules require lenders to verify the assets they rely on, per the CFPB’s ability-to-repay summary. Loans where the lender verifies neither income nor assets cannot be qualified mortgages. What is skipped is income paperwork on the qualifier path, not proof of assets.
Can I buy a rental with these?
Only on the depletion path, at up to 65% on a purchase and 60% on a cash-out. The qualifier path covers principal residences and second homes. If the rent comfortably covers the payment, a DSCR loan may fit better.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Phone: 828-256-2183.
Lendmire’s asset-based mortgage in California page presents the program for California borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB, Ability-to-Repay and Qualified Mortgage Rule Summary
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Buy a California Rental Property on Asset Depletion Income? · Can You Get an Asset Depletion Loan While Paying Alimony? · How to Buy Before You Sell in Indiana Using an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in California
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.