The Quick Read: A Tennessee retiree with a large portfolio and little documented income has two asset-based paths, and the choice comes down to whether the assets cover the whole loan or have to be turned into income. The asset qualifier path tests whether eligible assets equal or exceed the entire loan and documents no income. The asset depletion path divides usable assets by 60 months to create qualifying income, which then runs through a debt-to-income test. Program figures below are typical ranges through select lenders in Lendmire’s wholesale network, subject to underwriting.
- Asset qualifier: eligible assets must cover the full loan; no employment or income is documented.
- Asset depletion: usable assets divided by 60 months become monthly income that has to carry the housing payment and other debts.
- Retirement accounts count at 90% under age 59½ and 100% at 59½ or older on the qualifier path, but at 70% at any age on the depletion path.
- Both paths document the assets. “No income documentation” never means no documentation.
- A rental purchase usually belongs on a DSCR loan instead, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
The Honest Answer: Who Each Path Is For
The asset qualifier path suits a retiree whose liquid balances exceed the loan. The asset depletion path suits a retiree whose balances are large but smaller than the loan, or who has Social Security, a pension, or required distributions that can be added on top.
Picture a retiree selling a longtime home and buying a replacement in Tennessee. If brokerage, savings, and IRA balances add up to more than the new loan, the qualifier path asks only that those assets be seasoned and documented. If the portfolio is large but the loan is bigger than the usable balance, the depletion path turns the portfolio into monthly income and tests it against debts. The two cannot be blended. A borrower is qualified on one path at a time, and across the wholesale network the figures for each stay separate.
Both are consumer mortgages for a principal residence or second home. Investment property is available only on the depletion path, at lower leverage. Lendmire is a broker. It arranges these loans through select lenders and does not lend or approve.
Side-by-Side
The table shows the network’s program parameters for both paths. Every figure is subject to underwriting and changes with the lender and the file.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Review basis | Eligible assets cover the entire loan | Usable assets ÷ 60 months = monthly income, tested against debts |
| Income documented | None | Derived income, plus actual income if any |
| Leverage | Up to 80% purchase, 75% refinance | Up to 80% purchase or rate-and-term, 60% cash-out (home); 65% and 60% on investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Occupancy | Principal residence, second home | Principal residence, second home, investment property |
| 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 |
| Minimum assets | Assets must equal or exceed the loan | Lesser of $1,000,000 or 1.25x the loan; $250,000 liquid floor if sole income |
| Reserves | None at or below 75% LTV; lender sets above | No published reserve months |
How Each Path Works
On the asset qualifier path, the lender applies a credit percentage to each account. Brokerage, certificates of deposit, money market, and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Here is an illustration. An $800,000 loan is supported by $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets, which covers the loan on assets alone. The lender’s own calculation governs.
On the asset depletion path, haircuts are steeper. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. The total divides by 60 months. Take $1,500,000 in securities (80%, so $1,200,000) plus $300,000 in cash (100%, so $300,000). That is $1,500,000 usable, or $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
The borrower keeps the assets. Neither path requires liquidating anything. The depletion math is a qualifying convention, not a withdrawal plan, and cash-out proceeds never count as qualifying assets.
When Asset Qualifier Is the Better Fit
Choose the qualifier path when eligible balances at least match the loan and the retiree wants no income calculation at all. It also fits when documented income is thin or irregular, such as a retiree living on a mix of distributions that would make a debt-to-income test awkward.
The qualifier path has more room on the loan size, up to $4,000,000, and higher leverage on a purchase at 80%. Retirement balances also count for more: 90% under 59½ and a full 100% after. A retiree over 59½ with most of the portfolio in an IRA sees the biggest gap between the two paths.
The trade-off is that the whole loan must be covered. A retiree with $800,000 in usable assets cannot take a $1,000,000 loan here. The path also does not publish a cash-out figure, so anyone planning to pull equity from a Tennessee home should not assume it is available.
Credit still matters. The published floor is 600, and the file is underwritten individually. The 60-day seasoning rule and the two-month statement requirement mean assets moved in last month need a clear paper trail.
When Asset Depletion Is the Better Fit
Choose depletion when the portfolio is large but the loan is larger than the usable balance, or when the retiree has documented income that asset-derived income can supplement. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived.
Say a retiree draws Social Security and a pension that cover part of the housing payment. Depletion income fills the gap. That is a better fit than the qualifier path, which would require assets covering the entire loan regardless of the income already in place.
Depletion is also the only path that reaches investment property, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out on a principal residence or second home is available at up to 60%.
The costs are real. Retirement accounts count at 70% at any age, securities at 80%, and the divisor spreads the result across 60 months. A retiree with most wealth in an IRA gets noticeably less qualifying income than the balance suggests. A first-time investor on this path needs a 700 score, and a housing event needs four years of seasoning. Housing history of 0x30x12 is the standard, with one recent 30-day late considered case by case.
Sole-income files must show qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is the only income source.
Assets That Do Not Count on Either Path
Some balances never count as published. Depletion excludes 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, collectibles, business accounts beyond the borrower’s ownership share, and pledged or borrowed funds 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 seasoning rule, though the paper trail still matters.
For a retiree, one practical point deserves attention. Required minimum distributions create recurring, mandatory cash flow once a retiree reaches the age at which the federal rules require withdrawals from retirement accounts. That belongs in the conversation about which assets to count and how the income picture looks.
Why the Federal Rules Allow This
Federal rules let a creditor base a repayment decision on assets rather than income. The CFPB’s ability-to-repay compliance guide says a creditor may consider assets other than the home securing the loan, and that the rule leaves creditors latitude in how they weigh income or assets. It also calls for verification using reasonably reliable third-party records, and bank and investment account statements are examples.
That explains why both paths are strict about statements. The Official Interpretations of Regulation Z confirm that a determination may rest on income, on assets, or both. Because these are consumer loans, standard consumer disclosure rules apply to them.
Where DSCR Fits Instead
A retiree buying a true rental usually does not need either asset path. Business-purpose investor loans are reviewed differently from owner-occupied mortgages, and the Federal Register’s ability-to-repay rule notes that investment-purpose loans are treated as business-purpose.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Here the portfolio does different work: it supports the down payment, source of funds, and reserves instead of becoming qualifying income. Vesting in an LLC is generally a DSCR option, subject to lender program eligibility, while asset programs are typically individual-borrower. Programs below 1.00 coverage are available through select lenders in the network, though leverage and terms adjust. Lendmire’s complete DSCR loans guide covers the mechanics.
The rule of thumb: use DSCR for a property that rents out; use an asset path for a home the retiree will live in, or for a retiree with little rental income.
Common Mistakes on Retiree Files
1. Assuming the labels mean the same thing. One path tests assets against the loan; the other computes income and a debt-to-income ratio.
2. Counting a retirement balance at face value. Haircuts differ by path, and the depletion path takes 70% at any age.
3. Moving assets in late. Seasoning and statement-age rules trip files that show a fresh transfer without a paper trail.
4. Treating “no income documentation” as “no documentation.” The assets are documented on both paths.
5. Using real-estate equity on the qualifier path. Equity counts only on the depletion path, at 60%.
A Note on Tennessee
The program figures do not change by state. A Tennessee borrower faces the same percentages, seasoning rules, and loan limits as anyone else. Lendmire’s consumer mortgage lending is licensed in 16 states, and Tennessee is one of them. Local taxes and insurance affect the housing payment on the depletion path, so a retiree should budget for them, but they are context and never program parameters.
Balanced Verdict
If usable assets cover the loan outright, the qualifier path is simpler and gives retirement accounts more credit. If they do not, or if documented income exists to supplement, depletion is the path with room to work. If the property is a rental, look at DSCR first. For high-balance purchases, Lendmire’s discussion of maxed-out jumbo versus super jumbo for a retiree on asset depletion covers the next step up.
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. Reach the team at 828-256-2183 or request a quote.
Key Terms Defined
- Asset qualifier: A path where eligible, seasoned assets must cover the entire loan and no income is documented.
- Asset depletion: A path that divides usable assets by 60 months to create monthly qualifying income.
- Haircut: The share of an account’s balance a lender discounts before counting it.
- Seasoning: The length of time funds must sit in an account before they count.
- Debt-to-income (DTI): Monthly debts divided by monthly income, used on the depletion path.
Frequently Asked Questions
Do I have to sell my investments to use either path?
No. Both paths use the balances as qualifying evidence. The borrower keeps the assets, and the depletion math is a convention rather than a withdrawal schedule.
Do my IRA and 401(k) balances count?
Yes, at a discount. On the qualifier path they count at 90% under age 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. Age matters for retirement balances because early distributions generally carry an additional tax before 59½.
Can I add Social Security or a pension?
On the depletion path, yes. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does. The qualifier path documents no income.
Can I use either path to buy a rental?
Only the depletion path reaches investment property, at lower leverage. Most retirees buying a true rental look at DSCR, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Is a credit check part of this?
Yes. The qualifier path publishes a 600 minimum score, and the depletion path follows the lender’s matrix. Approval is never assured, and every file is underwritten individually.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB ATR/QM Small Entity Compliance Guide
2. Cornell LII, Official Interpretations of Regulation Z
3. Federal Register, ATR/QM 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: DSCR vs Asset Depletion for a Retiree Using a Short-Term Rental Part-Time · Asset Qualifier vs Asset Depletion for a Cash-Out Refinance · How Much Can a Retiree Borrow on a Jumbo Loan Using Asset Depletion?
Guides: Asset-Based Mortgage in Tennessee
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.