The Quick Read: An asset qualifier loan counts your eligible assets against the entire loan balance and documents no income, while an asset depletion loan divides usable assets by 60 months to build a monthly income that must pass a debt-to-income test. 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 $4,000,000, with no employment or income documented.
- Asset depletion: usable assets divided by 60 months become qualifying income, on loans from $125,000 to $3,500,000.
- Retirement accounts: count at 90% under age 59½ and 100% at 59½ or older on the qualifier path, but 70% at any age on the depletion path.
- Investment property: reachable only on the depletion path, at lower leverage.
The Honest Answer First
For a retiree whose balances are large and whose paycheck is gone, these two paths solve the same problem differently. The asset qualifier path suits someone who holds enough seasoned assets to cover the loan outright and wants nothing run through a debt-to-income test. The depletion path suits someone who has less than the full loan balance in assets but enough to generate a workable income figure, or who wants to buy an investment property.
Colorado doesn’t change any program figure. Front Range prices and mountain-town second homes do push many retirees toward larger loans, and loan size is often what decides the path. Across our wholesale network, both options are placed through select lenders. Consumer mortgage lending is licensed in 16 states, Colorado among them. Everything here is subject to underwriting, and the lender’s own calculation governs.
Side-by-Side
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Review basis | Eligible assets cover the entire loan | Assets ÷ 60 months = income, run through DTI |
| Income documented | None | Derived income; may supplement other income |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Purchase leverage | Up to 80% | Up to 80% (primary/second); 65% (investment) |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term; 60% cash-out |
| Retirement accounts | 90% under 59½; 100% at 59½+ | 70% at any age |
| Occupancy | Primary residence, second home | Primary, second home, investment property |
| Seasoning | 60 days; two months of statements per account | Statements 120+ days old plus one within 45 days |
| Reserves | None at or below 75% LTV | No published reserve months |
| Credit | 600 minimum | The lender’s matrix |
How Each Path Works
Asset qualifier. Your accounts combine, each at its credit percentage. Brokerage, CDs, money market and savings count at 100%. Say you need an $800,000 loan and hold $330,000 in brokerage accounts, $300,000 in a 401(k) while under 59½, and $200,000 in savings. The 401(k) counts at 90%, so $270,000 is usable. The total comes to $800,000 of usable assets, which matches the loan. That is illustrative only. The lender’s calculation governs.
Asset depletion. Here the haircuts are steeper. Cash and CDs count at 100%, securities 80%, private stock 75%, retirement accounts 70%, and real-estate equity 60%. Picture $1,500,000 in securities, which counts at 80%, or $1,200,000, plus $300,000 in cash. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
On both paths the assets are documented. “No income documentation” never means “no documentation.” The lender reviews statements, ownership and the source of any large deposit.
The regulatory footing is straightforward. Under Regulation Z’s ability-to-repay provision, a creditor on a consumer-purpose mortgage must consider and verify income or assets. The Federal Register preamble lists savings, retirement accounts and stocks as examples of assets a creditor may rely on. Asset-based loans are a recognized way to show repayment ability. The 60-month divisor is a program convention, not a federal rule. Lenders publish different divisors, so confirm which one a given program uses.
When the Asset Qualifier Is the Better Fit
Choose this path when the numbers are simple and the assets are liquid.
- You can cover the loan with assets. If eligible balances equal or exceed the loan, nothing else needs to be proven.
- Your wealth sits in an IRA or 401(k) and you’re 59½ or older. Those balances count at 100% here, versus 70% on the depletion path. For a retiree holding most of their wealth in retirement accounts, that gap is large.
- You want no debt-to-income test. No income is documented, so there is no ratio to fail. The lender’s ability-to-repay review rests on the assets.
- You’re buying a primary residence or second home. Mountain-town second homes and Front Range moves fit here, with up to 80% leverage on a purchase.
- You want to keep reserves simple. None are required at or below 75% loan-to-value. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
The tradeoff is rigidity. Because assets must cover the whole loan, a large loan needs a large, seasoned balance. Sixty days of seasoning and two months of statements per account mean parked-and-moved money gets reviewed. A 600 minimum credit score applies. Whether this path allows cash-out is set by the lender and isn’t published, so don’t plan around it.
When Asset Depletion Is the Better Fit
This path works when your assets are meaningful but fall short of the full loan, or when the property is a rental.
- You want an investment property. Only this path reaches investment property, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
- Your assets are below the loan amount. Income is built from the pool, so the pool doesn’t have to cover the loan.
- You have other income. Pensions and Social Security can be supplemented with asset-derived income up to a 45% debt-to-income ratio. When assets supplement income, the minimum-assets rule is waived.
- You need a cash-out refinance on a home. Primary residence and second-home cash-out is available at up to 60%. Cash-out proceeds never count as qualifying assets.
- A smaller loan fits. Loans start at $125,000.
The catch is the minimums. Depletion needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. If depletion is your only income source, you also need no less than $250,000 liquid. Retirement accounts are discounted at 70% at any age, and the loan payment still has to clear the debt-to-income test. A first-time investor on this path needs a 700 score. Statements must be at least 120 days old at application, with the latest one within 45 days. Inheritance, legal settlements and sale-of-business funds are excused from that seasoning.
Not eligible on this path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units.
One caution on investor use. Putting cash into rental equity shrinks the pool the divisor works on, so each additional purchase lowers future qualifying income. Retirees who plan several purchases should model the pool after each one.
Which One Should a Colorado Retiree Choose?
The deciding variable is your balance sheet, not your preference.
- Assets at least equal the loan, and you’re 59½ or older with a large IRA: the qualifier path usually counts more of your money.
- Assets are smaller than the loan, or you want investment property: depletion is the path that fits.
- You hold crypto, precious metals or collectibles: neither path publishes these as eligible. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
- The property is a pure rental: a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, may fit better than either asset path. Lendmire’s complete DSCR loans guide covers that route.
Be careful with one assumption. Many people believe asset depletion means selling investments. It doesn’t. Assets are counted, not liquidated, and you keep the portfolio. Property equity in the home securing the loan also can’t be counted, because the dwelling securing a loan is excluded from the assets a lender may rely on.
Key Terms Defined
Eligible assets: the verified balances a lender will count, after applying its credit percentage to each account type.
Haircut: the share of an account’s value the lender discounts, such as retirement accounts counting at 70% on the depletion path.
Seasoning: the length of time funds must sit in an account before the lender counts them.
Debt-to-income (DTI): monthly debts divided by monthly qualifying income, applied on the depletion path.
Derived income: the monthly figure produced by dividing usable assets by 60 months.
A Balanced Verdict
Neither path is better in the abstract. The qualifier path is cleaner and credits retirement money more generously, but it demands assets that cover the whole loan. Depletion stretches further, reaches investment property and allows cash-out, but it discounts retirement accounts harder and runs everything through a debt-to-income test. For many Colorado retirees buying a primary or second home with ample liquid savings, the qualifier path is the simpler fit. For those with a smaller pool, a rental purchase, or a need for cash-out, depletion is the workable route. Both are placed through select lenders, and every file is underwritten individually.
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. For jumbo-size Colorado purchases, Lendmire’s article on super jumbo loans for a retiree on asset depletion covers the larger-loan side.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion?
No. The lender counts your assets, discounted by account type, and you keep the portfolio. It converts them to a paper income figure by dividing usable assets by 60 months.
Do retirement accounts count on both paths?
Yes, at different percentages. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Can I use Social Security or a pension with asset depletion?
Yes. Asset-derived income may supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived, subject to underwriting.
Do I need to document any income on the asset qualifier path?
No employment or income is documented. The assets themselves are documented with two months of statements per qualifying account and 60 days of seasoning.
Can I buy a rental with either path?
Only the depletion path reaches investment property, at lower leverage than a home. Tax treatment varies; consult a qualified professional.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z, 12 CFR 1026.43
2. Federal Register: Ability-to-Repay and Qualified Mortgage Standards
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Document an Asset Qualifier Mortgage · Does a Retiree Using Asset Depletion Need a Super Jumbo Loan? · Maxed-Out Jumbo vs Super Jumbo Loan for a Retiree on Asset Depletion
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.