Which Assets A Lender Counts On An Asset Depletion Mortgage — The Quick Read: Cash, checking, savings, CDs, and brokerage balances count first, usually near full value. Vested retirement accounts count too, once the borrower shows access to them. Business operating funds, unvested stock, real estate equity, and crypto typically don’t count at all. Every account gets discounted differently depending on how liquid and stable it is, and the discounted total gets divided by a set number of months to produce a monthly qualifying figure.
That’s the short version. The rest of this comes down to how the discounts get applied, why retirement accounts get treated differently by age, and where the line sits between what counts and what never will.
What Assets Actually Count?
Cash-equivalent accounts count at or near full value, and vested retirement funds count too, once the borrower can show a legal path to reach them. Stocks and bonds count, but at a discount. Business funds, unvested compensation, and real estate equity almost never make the list.
Here’s the tier structure most asset depletion programs use, ranked from strongest to weakest:
| Asset Type | Typical Treatment | Why |
|---|---|---|
| Checking, savings, money market, CDs | Counted near full value | Stable, liquid, no price risk |
| Brokerage / stock / mutual fund accounts | Counted with a discount | Price volatility |
| Vested retirement accounts (401k, IRA) | Counted with a discount, smaller after 59½ | Early-withdrawal penalty before that age |
| Business operating accounts | Usually excluded | Not personally owned outright |
| Real estate equity | Excluded | Not liquid |
| Unvested stock, RSUs, crypto | Excluded | Not owned yet, or too volatile to verify |
Within our own wholesale network, retirement accounts typically count at 70% of value, stepping up to 80% once the borrower is 59½ or older — the age past which withdrawals no longer trigger a penalty. That’s a program figure from the asset-based paths we place files through, not a universal number. Every lender in the space runs its own version of this discount schedule.
The federal rule for discounting comes from OCC Bulletin 2019-36. It tells banks that asset dissipation underwriting should assume “either no rate of return on eligible assets or well-supported rates of return based on asset quality, liquidity, and price volatility.” This is a guiding principle, not a fixed percentage. That’s exactly why haircut schedules differ from lender to lender.
Why Do Discounts Exist at All?
Discounts exist because not every dollar in an account behaves the same way. A dollar sitting in checking is worth a dollar next month. A dollar in a stock portfolio might be worth eighty cents.
Lenders are converting a balance sheet into a hypothetical income stream. If a market downturn shaves 20% off a brokerage account right after closing, the borrower’s real ability to keep pulling income from that account drops too. The discount is the lender’s way of pricing that risk into the qualification math up front, rather than getting surprised by it later.
Retirement accounts get a similar treatment for a different reason — accessibility, not volatility. Before 59½, pulling funds out early usually triggers a tax penalty. That penalty makes the money less accessible, so the discount reflects that friction rather than market risk alone.
How Does the Divisor Work?
The divisor is the number of months a lender spreads the discounted asset pool across to produce a monthly qualifying figure. A shorter divisor produces a bigger monthly number from the same pool of money, so it’s the single biggest lever in the whole calculation.
In our network, the divisor typically runs on a tiered structure. When the resulting figure supplements other documented income and the borrower’s overall debt load sits at or below a moderate threshold, the divisor is usually set at 36 months. When it supplements income above that threshold, it typically steps to 60 months. When the asset figure stands alone as the only qualifying income — or the loan amount runs above $3,500,000 — the divisor typically steps to 84 months instead.
Picture two borrowers with the identical discounted asset pool. The one using a 36-month divisor gets a monthly qualifying figure more than double what the 84-month divisor produces on the same money. That’s not a lender being generous or stingy — it’s the arithmetic doing exactly what it’s designed to do: a shorter timeline assumes the money needs to work harder, faster.
Fannie Mae has its own version of this concept. It ties the divisor to the remaining loan term itself, typically 240 to 360 months. This is far more conservative than most non-QM divisors. Fannie’s approach applies to a narrower group: borrowers using employment-related retirement assets near retirement age. This follows Fannie Mae’s Selling Guide requirement that lenders confirm the borrower can keep repaying even after the asset runs dry. Non-QM asset depletion serves a much broader group. This includes self-employed borrowers, retirees, and high-net-worth investors whose traditional personal-income documentation understates their real income.
What Never Counts, No Matter What?
Business operating funds, unvested stock, real estate equity, and crypto never count under nearly any asset depletion program in the market. These categories fail for one of three reasons: they aren’t personally owned outright, they aren’t liquid, or they can’t be verified as accessible without triggering a business or tax event.
A few specific gotchas worth flagging:
- Trust assets are handled inconsistently. Some programs will count a revocable living trust the borrower controls; almost none count an irrevocable trust or one where the borrower doesn’t have direct authority over distributions.
- Gifted funds typically don’t count toward the asset pool used for depletion income, even though gift funds can sometimes be used for a down payment on other loan types.
- Cryptocurrency doesn’t count in most programs we see, largely because verifying ownership, custody, and stable value is a documentation problem lenders haven’t standardized yet.
- Business equity — the value of a company the borrower owns — is excluded even if the borrower could theoretically sell it. It isn’t liquid on the timeline underwriting cares about.
This exclusion list matters more than the inclusion list for a lot of borrowers, because it’s where high-net-worth applicants get surprised. A founder with real wealth concentrated in a company they built might have almost none of it count toward an asset depletion file.
How Does This Compare To Documentation Requirements?
Every account being counted needs a full statement history, not a summary page, and the lender needs a clear paper trail proving the borrower actually owns and can access the money. This is the piece that gets scrutinized hardest, because CFPB Regulation Z §1026.43 requires lenders to verify income or assets using reasonably reliable third-party records before relying on them.
For readers who want the documentation checklist in full — which accounts need which statement pages, how ownership gets proven, how seasoning periods work — the guide to documents an asset depletion mortgage lender wants walks through it in more depth than makes sense to repeat here.
Money Earmarked For The Deal Doesn’t Get Counted Twice
Funds already set aside for the down payment, closing costs, or required reserves generally get carved out of the pool before the depletion math even starts. That’s a subtraction step, not a discount — the dollars are pulled out entirely, then the remaining balance gets discounted and divided.
This trips up a lot of borrowers running their own back-of-napkin math. They see a big number in a brokerage statement and assume all of it converts to qualifying income. In practice, whatever’s needed to close the loan comes off the top first.
Asset Depletion vs. Simply Having Assets For Reserves
Asset depletion converts a balance sheet into income used to qualify for the loan. Reserves are a separate, smaller requirement — money left over after closing to cover a few months of payments if things go sideways. The same discount logic and documentation standard applies to both, which is why a borrower who assumes a stock portfolio counts at full face value for reserves can end up short in ways they didn’t expect.
Across our wholesale network on the portfolio and bank-statement programs, reserve requirements typically run 3 months of payments on loans to $500,000, 6 months to $1,500,000, and 9 months above that — plus roughly 2 additional months for every other financed property the borrower holds, up to a 12-month ceiling. First-time real estate investors typically need the full 12 months regardless of loan size. None of that reserve money can come from cash-out proceeds on our portfolio program — a distinction that matters if a borrower is planning to pull equity and use part of it to cover post-closing reserves.
Two Structures, Two Different Questions
Assets are used to qualify two different ways in our network: an asset allowance that supplements other income, or a standalone assets-only path with no debt-to-income calculation at all.
The asset allowance path divides eligible liquid assets by 36, 60, or 84 months, depending on the DTI level and loan size, as covered above. It’s limited to primary and second homes, capped at 80% loan-to-value.
The assets-only path skips income calculation entirely. It requires the borrower to hold U.S. liquid assets equal to the loan amount, plus closing costs, plus sixty months of any net loss the borrower carries on other residential property. No debt-to-income ratio gets calculated at all — the assets themselves are the qualification. For more detail on how that structure is built for high-net-worth borrowers specifically, the complete guide to assets-only mortgages covers the mechanics.
Sizing And Leverage: What The Numbers Actually Look Like
Loan sizes on the asset-based paths in our network run from $300,000 to $30,000,000 across two separate wholesale programs — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that carries twelve-month-statement files up to $30,000,000 on its own leverage ladder (65% to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% or the band’s ceiling, whichever is lower).
On a primary residence, leverage on our asset-based paths tops out around 80% loan-to-value at the smaller end and steps down as loan size climbs — typically 65% purchase leverage in the $4,000,000-to-$5,000,000 band, for example, through select wholesale programs subject to underwriting. Second homes and investment properties run roughly five points lower at every size tier. Above $4,000,000, every file gets reviewed case by case before it goes to underwriting — that’s not a formality, it’s how the largest files actually move through the network.
Credit requirements on asset-based files typically start at a 660 floor. This steps up to 700 above the super-jumbo line — roughly $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property. Above those thresholds, extra overlays kick in. Lenders want a cleaner housing-payment history, longer seasoning on any past credit event, and no non-occupant co-borrowers.
Here’s what we’ve seen across the network. Files that stack asset depletion income on top of Social Security, pension, or rental income tend to move through underwriting with fewer conditions. Files that try to stand entirely on assets alone face more friction. The standalone assets-only path is powerful, but it demands a much bigger liquid balance sheet relative to loan size. That liquidity math either works cleanly or it doesn’t. There’s not much middle ground once the calculation is run.
A Practical Framing: Asset Depletion vs. DSCR
Asset depletion qualifies the person; a DSCR loan qualifies the property. If the borrower is buying or refinancing their own home and their wealth sits in cash, brokerage, and retirement accounts rather than a paycheck, asset depletion is the tool built for that. If the borrower is buying a rental property, a loan that reads the lease — not the balance sheet — usually fits better.
DSCR loans are designed for non-owner-occupied investment properties. They’re business-purpose investor loans. So they qualify mainly on whether the property’s rental income covers the payment, subject to lender guidelines. They don’t rely on personal income or asset documentation. That’s a very different underwriting question than asking whether a borrower’s balance sheet supports a monthly payment.
The two aren’t mutually exclusive for an investor building a broader portfolio. A borrower with real liquid wealth but thin W-2 or Schedule C income might use asset depletion to buy or refinance a primary residence, then use DSCR loans — evaluated purely on rent versus payment — for the rental side of the portfolio. Investors weighing which structure fits a specific deal can review Lendmire’s direct comparison of DSCR loans and asset depletion loans for a side-by-side look.
Key Terms Defined
Asset depletion (or asset dissipation): a method of converting a borrower’s liquid balance sheet into a hypothetical monthly income figure for mortgage qualification, used instead of or alongside W-2s and traditional personal-income documentation.
Haircut (or discount): the percentage reduction a lender applies to an asset’s value before counting it, based on how liquid and stable that asset type is.
Divisor: the number of months a lender divides the discounted asset pool by to produce a monthly qualifying income figure — a shorter divisor produces a larger monthly number.
Vested retirement account: a retirement account where the borrower has full ownership rights to the funds, even if withdrawal before a certain age triggers a tax penalty.
Debt-to-income ratio (DTI): the percentage of a borrower’s monthly income that goes toward debt payments — relevant on the asset-allowance path, irrelevant on the assets-only path.
Frequently Asked Questions
Do I have to liquidate my accounts to use asset depletion?
No. Most programs require only that the account be vested and that the borrower demonstrate a legal path to access the funds — not that the funds actually get withdrawn or cashed out before or at closing.
Does a 401(k) get discounted the same way at every age?
No. In our network, retirement accounts typically count at 70% of value before age 59½, stepping up to 80% once the borrower reaches that age — the point at which withdrawals no longer trigger an early-withdrawal penalty.
Can I combine asset depletion income with rental income or Social Security?
Yes, in most cases. The asset-allowance structure is specifically built to supplement other documented income sources, using a 36- or 60-month divisor depending on overall debt load. The standalone assets-only path skips this entirely and relies on liquidity alone.
Does real estate equity ever count as an asset for depletion purposes?
Generally, no. Real estate equity is excluded across nearly every program in the market because it isn’t liquid the way a deposit or brokerage account is — converting it to cash requires a sale or a separate loan.
Is there a minimum dollar amount of assets required?
There’s no single dollar floor across the market. The amount of qualifying assets needed depends entirely on the loan size and the monthly payment obligation being supported — it’s arithmetic once the eligible pool and divisor are set.
Are you weighing an asset depletion structure against a straightforward rental-property purchase? Lendmire can help you compare qualification paths. We’ll look at your assets, credit profile, leverage needs, and investment goals. Reach the team at 828-256-2183 or request a quote directly.
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 (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 40 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
2. Fannie Mae Selling Guide B3-3.1-01
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.
