The Quick Read: An asset qualifier loan tests whether your eligible assets cover the entire loan with no income documented, while asset depletion turns those assets into monthly income that must pass a debt-to-income test, and a borrower is reviewed on only one path at a time. A retiree picks between them based on whether the portfolio can cover the loan outright or has to act like a paycheck. Both are consumer mortgages placed through select lenders, subject to underwriting.
- Asset qualifier: your usable assets must equal or exceed the whole loan. Purchases go up to 80% and refinances up to 75%, on a principal residence or second home.
- Asset depletion: usable assets divided by 60 months become qualifying income. That income must carry the housing payment and your other debts.
- Documentation: neither path is no-doc. Your accounts are verified on both, and only income documentation drops away or gets replaced by the formula.
- Rentals: investment property is available only on the depletion path. A pure rental purchase usually fits a DSCR loan better.
Lendmire is a mortgage broker. It arranges these loans through its wholesale network, and consumer mortgage lending is licensed in 16 states, New Mexico among them. The program figures below do not change by state. They are ceilings and floors, not offers, and the lender’s own calculation governs every file.
Side-by-Side
The two paths differ on what the lender measures. One asks whether your assets cover the loan. The other asks whether your assets, converted to income, can carry the payment. These are the figures most programs in the network work from, subject to lender guidelines.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Review basis | Assets alone cover the full loan | Usable assets ÷ 60 months = income |
| Income documented | None | Derived income; other income can add |
| Property types | Principal residence, second home | Those plus investment property |
| Purchase leverage | Up to 80% (primary, second home) | 80% primary/second; 65% investment |
| Refinance leverage | Up to 75% (primary, second home) | Cash-out 60%; investment 65% R&T |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Seasoning | 60 days; 2 months of statements | Statements 120+ days old, one within 45 days |
| Reserves | None at or below 75% LTV | No published reserve months |
Two notes on that table. Rate-and-term is shortened to R&T, and on the depletion path it runs up to 80% on a primary residence or second home. The lender sets whether cash-out proceeds are allowed on the qualifier path, so no figure is published for it.
Loans to an entity are a lender-level question on both paths. These are personal consumer loans, and underwriting reviews the individual’s assets and credit.
Key Terms Defined
- Asset qualifier: a path where eligible assets, after the credit percentages, must equal or exceed the entire loan amount.
- Asset depletion: a path that divides usable assets by 60 months to create monthly income for the debt-to-income test.
- Debt-to-income (DTI): your monthly debts, including the new housing payment, divided by your monthly income.
- Seasoning: how long money must sit in an account before the lender counts it.
- Haircut: the share of an account’s balance a lender discounts because the asset could fall or be hard to reach.
Terminology is not standardized across the industry. Some lenders use the two names for the same formula. This article defines each by mechanics, so confirm which definition a lender means before comparing quotes.
When Asset Qualifier Is the Better Fit
Asset qualifier fits when your balances are big enough to cover the loan on their own. It is the cleaner path for a retiree with a large, liquid portfolio who wants to document no income at all. No DTI gets built, so Social Security, a pension, and required distributions never enter the test.
Credit counts at generous percentages here. Brokerage accounts, CDs, money market and savings all count at 100%. A 401(k) or IRA counts at 90% under age 59½ and at 100% from 59½ on. Accounts combine, so a mix across institutions works.
Here is a worked example. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts as $330,000), $300,000 in a 401(k) while under 59½ (90% counts as $270,000), and $200,000 in savings (100% counts as $200,000). That is $800,000 of usable assets, and the file is reviewed on assets alone, subject to underwriting. This is illustrative only.
The path also has a credit floor worth knowing. The published minimum score is 600, and housing history is typically 0x30x12. One 30-day late in the last twelve months gets considered case by case.
The tradeoff is size. You need the whole loan amount in usable assets, so a $1,000,000 mortgage demands roughly $1,000,000 in counted balances. That is a high bar, and it is also why the qualifier path suits people who just sold a business, received an inheritance, or sit on a large cash position. Reserves are not required at or below 75% loan-to-value. Above that, the lender sets them.
Here is the catch. This path covers principal residences and second homes only. If you want to buy a rental, look at the next section or at DSCR.
When Asset Depletion Is the Better Fit
Asset depletion fits when your portfolio is large but not big enough to cover the loan outright. It also fits when you want to blend assets with Social Security, a pension, or other documented income. The portfolio becomes a monthly income figure, and the loan then competes on DTI like any income-based file.
The haircuts are steeper here. Cash accounts and CDs count at 100%. Securities count at 80%, private stock at 75%, and retirement accounts at 70% at any age. Real-estate equity counts at 60%. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units do not count.
Now the depletion math. $1,500,000 in securities (80% counts as $1,200,000) plus $300,000 in cash (100% counts as $300,000) is $1,500,000 of usable assets. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the DTI test. The lender’s own calculation governs.
Assets can also supplement documented income here, up to a 45% DTI. When they do, the minimum-assets rule is waived. A retiree with a modest pension and a solid portfolio often lands in this lane.
Depletion has guardrails. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you need at least $250,000 liquid. Credit follows the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700 score. A housing event needs 4 years of seasoning, and multiple bankruptcies are not eligible.
On a principal residence or second home, leverage goes up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets.
What Counts, and at What Percentage
The same dollar of savings is worth different amounts on each path. Retirement money is the clearest difference. Compare the shares of each balance that count:
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Brokerage accounts / securities | 100% | 80% |
| 401(k) and IRA | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not listed | 60% |
Read the table by path, never by blending. A borrower is reviewed on one path at a time, and the percentages from one do not transfer to the other.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share 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. Sale-of-business, inheritance and legal-settlement funds are excused from the depletion path’s seasoning rule.
Why Assets Alone Can Support a Mortgage
Federal rules let a lender judge repayment ability on income, on assets other than the home itself, or on both, per the CFPB’s text of the ability-to-repay rule. The same rule requires the lender to verify what it relies on with reliable third-party records. That is why both paths run on statements instead of stated balances.
Retiree Realities Most Comparisons Skip
Retirement accounts behave differently by age. A retiree under 59½, such as an early-retired professional, gets 90% credit on the qualifier path and 70% on the depletion path. Past 59½ the qualifier path counts retirement balances at 100%. That gap alone can decide which path works.
Depletion income is a formula, not a promise. The 60-month divisor produces a qualifying figure, not a forecast of your spending. The portfolio can fall after closing. Check your own cash flow against the housing payment, with the market in a bad year, before you commit.
Assets get used once. Money you spend on the down payment and closing costs leaves the pile. Many borrowers forget that when they total their balances. The lender’s worksheet shows how it treats funds used at closing.
Across the wholesale network Lendmire works with, the files that run smoothly tend to share one habit. The borrower pulls every statement, confirms which accounts are in whose name, and checks seasoning dates before choosing a path. Files that start from a balance in someone’s head often switch paths midway, because the counted total comes in lower than expected.
If you live in New Mexico and hold accounts out of state, that is fine. What matters is that the accounts are in your name, in regulated institutions, and documented.
What About Buying a Rental?
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, and federal rulemaking treats investment-purpose loans as business-purpose credit.
The depletion path does cover investment property, at 65% on a purchase and 60% on a cash-out. For a rental you plan to hold, though, a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal portfolio never has to be converted to income. Lendmire’s complete DSCR loans guide explains how that route works.
The two lanes do not conflict. A retiree can use an asset-based mortgage for a home and a DSCR loan for a rental. Retirees weighing a bigger home purchase can also read Lendmire’s look at a jumbo loan for a retiree living on asset depletion.
Documents to Gather Before You Choose
- Two months of statements for every account you plan to count, for the qualifier path.
- Statements at least 120 days old plus the most recent one within 45 days, for the depletion path.
- Proof of ownership showing each account in your name.
- Documentation of any Social Security, pension, or distribution income you want to add on the depletion path.
- A paper trail for sale-of-business, inheritance, or settlement funds.
The Verdict
Choose asset qualifier if your eligible balances cover the entire loan, you want no income documented, and the home is a principal residence or second home. It is simpler and counts more of your retirement money.
Choose asset depletion if your portfolio falls short of the full loan amount, you have documented income to stack on top, or the property is an investment. It reaches further, at the cost of a DTI test and steeper haircuts.
For many retirees the answer comes down to arithmetic on their own statements. Count each account by each path’s percentages, then see which total clears the bar. 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.
Frequently Asked Questions
Do I have to sell my investments to use either path?
No. Both paths are calculations on the balances you hold, and you do not have to liquidate them to qualify. Funds you spend on the down payment and closing costs do leave the account, so they are not available to be counted twice.
Can I use both paths on the same loan?
No. A borrower is reviewed on one path at a time, and the percentages and tests from the two never blend. You can run your statements through both worksheets before choosing, then apply on the path that clears.
Does a retirement account count in full?
It depends on the path and your age. On the qualifier path, a 401(k) or IRA counts at 90% under 59½ and at 100% from 59½ on. On the depletion path, retirement accounts count at 70% at any age.
Do these loans require no documentation?
No. The assets are documented on both paths with statements, and the lender verifies them. What drops away is employment and income documentation on the qualifier path, which is replaced by a formula on the depletion path.
Can I use these loans for a rental property?
Only the depletion path covers investment property, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. For a pure rental purchase, DSCR financing usually fits better because it is reviewed on the property’s rent rather than your portfolio. Every file is subject to lender guidelines and underwriting. This is not a commitment to lend.
Lendmire’s asset-based mortgage in New Mexico page presents the program for New Mexico borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB – Ability-to-Repay Rule, 12 CFR 1026.43
2. Federal Register – Ability-to-Repay and Qualified Mortgage Standards Final Rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: When Does Asset Depletion Beat a Conventional Mortgage for a Washington Retiree? · Can You Get an Asset Qualifier Mortgage With a Co-Signer? · Asset Depletion vs DSCR for an Ohio Rental Purchase
Guides: Asset-Based Mortgage in New Mexico
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.