The Quick Read: The program that fits depends on one choice: whether your assets cover the loan outright or are converted into a monthly qualifying income. For a cash-out on a two-to-four-unit building, the asset depletion path is the one with published cash-out leverage, and it runs 60% on an investment property, subject to underwriting. Buildings with five or more units usually move into commercial-style underwriting, which is a different lane.
- Asset depletion divides usable assets by 60 months to create qualifying income, then tests it against the full payment and your other debts.
- Cash-out leverage on that path is 60%, on an investment property or on a principal residence or second home.
- Loans run from $125,000 to $3,500,000 through select programs.
- Cash-out proceeds never count as qualifying assets.
- Privately held company stock is not an eligible asset on either path.
What Does Asset-Based Mean on a Multifamily Building?
Asset-based means the loan is qualified on your documented assets, not on your paycheck or tax returns. Two other loan types use similar words, and mixing them up is a common mistake.
Property-based lending qualifies a building on its rent. That is the debt service coverage approach, and it suits investors whose rental income carries the loan. Hard-money lending is also called asset-based, but it is short-term money secured by the property. Neither is what this article covers.
Here, asset-based means your statements are the qualifying document. This suits retirees, business sellers, people who received an inheritance or settlement, and households living on a portfolio. Balances are large. Documented income is small.
The loan is still fully underwritten. There is no traditional personal-income documentation: no pay stubs or employment verification, but the lender reviews your statements, credit, appraisal and title. Through select lenders in Lendmire’s network, a broker matches the file to a program. The asset-based mortgage programs page covers the full product family.
Which Path Fits: Assets as the Loan or Assets as Income?
Pick the path first. A borrower is reviewed on one path at a time, and the two paths never blend.
On the asset qualifier path, eligible assets must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000. Leverage tops out at 80% on a purchase and 75% on a refinance. Whether cash-out proceeds are allowed on this path, and at what leverage, is the lender’s call and is not published. So for a cash-out on a building, plan around the other path unless a lender confirms otherwise.
On the asset depletion path, your usable assets become income. Divide them by 60 months, and that figure must carry the new housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Assets cover the loan | Assets become income |
| Max loan | $4,000,000 | $3,500,000 |
| Cash-out leverage | Lender sets it | 60% |
| Income documented | None | Derived from assets |
Subject to underwriting and the lender’s own calculation, those are the ceilings. They are not offers.
What Counts as an Eligible Asset?
Eligible assets are cash-like or marketable accounts, counted at a percentage of balance. The percentages differ by path, so keep the tables apart. First, the asset qualifier path:
| Asset | Share counted |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market and savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, age 59½ or older | 100% |
Accounts combine. Say you hold $330,000 in brokerage accounts, $300,000 in a 401(k) under age 59½, and $200,000 in savings. The 401(k) counts at 90%, so the usable total is $800,000. That covers an $800,000 loan on assets alone. This is an illustration, and the lender’s own calculation governs.
Now the asset depletion path:
| Asset | Share counted |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
Several assets are not eligible on the depletion path. These include custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, privately held stock, stock options, non-vested restricted stock units and funds from non-regulated financial companies. Cryptocurrency, precious metals, collectibles and borrowed funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender reviews the source.
How Is a Multifamily Cash-Out Underwritten, Step by Step?
The lender runs the asset test and the property test together. Whichever is tighter sets the cash.
1. Classify the building. Count the units and confirm whether you live there. A two-to-four-unit building is handled in the residential lane. Five or more units generally move to commercial-style underwriting.
2. Choose the path. For a cash-out, that usually means asset depletion at 60% leverage.
3. Document the assets. Depletion-path statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
4. Convert assets to income. Apply the percentages above, then divide by 60 months.
5. Test the new payment. The derived income must carry the new, larger payment plus your other debts. Cash-out raises the payment, so test the loan you are asking for, not the old one.
6. Value the building. A two-to-four-unit building is typically appraised on the small residential income property form. Fannie Mae’s Selling Guide lists that form (Form 1025) as the appraisal report for two- to four-unit properties. That is the form’s name only. These loans are not agency loans.
7. Size the loan. Leverage and the debt-to-income result each cap the loan. Closing costs and any prepayment charges then come out of the proceeds.
Equity is not cash. A building with plenty of equity can still produce a smaller check than expected because the payoff, costs and the lender’s cap all come first.
What Does the Depletion Math Look Like on a Building?
Consider a borrower with $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets total $1,500,000.
Divide by 60 months. That is $25,000 of monthly qualifying income. It must carry the housing payment on the new loan and any other debts through the debt-to-income test. This is an illustration only, and the lender’s calculation governs.
Two minimums apply on this path. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, assets must be at least $250,000 liquid. Asset-derived income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
A cash-out has one more trap. The proceeds you pull out of the building never count as qualifying assets. You cannot borrow against the building and then use that cash to qualify for the same loan.
What Credit and Seasoning Does a File Need?
The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700 score. Housing history is typically 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
Qualifier-path seasoning is 60 days, with two months of statements for each qualifying account. Reserves are not required at or below 75% loan-to-value on that path. Above that, the lender sets them. The depletion path publishes no reserve months. None of this is a promise of approval.
Where Does the General Rule Break?
You live in one of the units. A building where you occupy a unit is a principal residence. The depletion path still caps cash-out at 60% on a principal residence or second home. Occupancy changes the loan classification, so say so up front. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The building has five or more units. The residential lane stops at four units. Larger buildings are usually appraised commercially and underwritten on net operating income, with a rent roll and operating statements. The Comptroller’s Handbook on commercial real estate lending defines the debt service coverage ratio as net operating income divided by annual debt service. If the building is large, an asset-based file may not be the right lane. A property-income program usually is.
You hold stock in your own company. None of it counts: privately held company stock is not an eligible asset on either path. The route is documented liquid assets. That means seasoned proceeds from a sale or buyout of the shares, plus cash, public securities and retirement accounts at their published percentages.
Assets sit in an entity. Business accounts beyond your ownership share are not published as eligible. Whether the building can be vested in an LLC depends on program terms.
The building is mixed-use or short-term rental. An asset-based file is reviewed on you, not on the building’s rent. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income. For the rent-driven version of that strategy, see Lendmire’s piece Best Short-Term Rental Cash-Out Refinance Program on a Multifamily Building.
How Does This Compare With Qualifying on the Building’s Rent?
A property-income loan is reviewed primarily on rental income covering the payment, subject to lender guidelines. That approach tends to suit an investor with active tenants and strong rent. An asset-based loan suits an investor whose rent is thin, whose building is being repositioned, or whose own balances are the strongest part of the file.
| Situation | Better fit |
|---|---|
| Strong rent, modest personal assets | Property-income program |
| Large balances, little documented income | Asset-based, depletion path |
| Balances cover the whole loan | Asset-based, qualifier path |
| Five or more units | Commercial-style underwriting |
Because a loan on a rental building is a business-purpose investor loan, it is reviewed differently from a standard owner-occupied mortgage.
How Do You Judge the Best Program for Your Situation?
The best program for your situation depends on five things: the unit count, whether you occupy a unit, the size and type of your assets, your credit profile and how much cash you need. No single lender wins on all five. A broker that places files with several wholesale lenders can compare overlays and match the scenario.
Across a network, programs differ most on credit matrices and on how they handle ownership seasoning on the building. The strictest overlays tighten leverage first. The asset percentages and the list of ineligible assets stay as published above. Here is a practical order of operations:
- Work out your usable assets under each path before you shop.
- Decide how much cash you actually need. Taking less than the cap keeps the new payment lower.
- Line up statements early, since the 120-day rule on the depletion path catches many borrowers.
- If your wealth sits in private company stock or crypto, plan the conversion to seasoned cash before you apply, because neither is an eligible asset as it stands.
Key Terms Defined
Asset qualifier path: The program path where eligible assets must cover the whole loan, with no income documented.
Asset depletion path: The path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The part of an account’s balance that a lender does not count, because the balance can fall or is hard to reach.
Seasoning: How long funds have been in an account, or how long a borrower has owned a property, before a lender will count them.
Debt-to-income test: A comparison of monthly debts, including the new housing payment, against qualifying income.
Debt service coverage ratio: Net operating income divided by annual debt service, used to test whether a building’s income carries its loan.
Frequently Asked Questions
Does an asset-based cash-out refinance require tax returns or pay stubs?
No. The file needs no traditional personal-income documentation, pay stubs or employment verification. It is still fully underwritten, and your assets are documented with statements. The lender also reviews credit, the appraisal and title, subject to underwriting.
How much can I take out on a multifamily building?
On the asset depletion path, cash-out leverage is 60% on an investment property, or on a principal residence or second home. Loans run from $125,000 to $3,500,000 through select programs. On the asset qualifier path, cash-out terms are set by the lender and are not published.
Can I use the cash-out money to qualify?
No. Cash-out proceeds never count as qualifying assets. Your eligible assets must qualify the loan on their own, before any proceeds are pulled out of the building.
Does retirement money count?
Yes, at a reduced share. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and at 100% from 59½. On the depletion path, retirement accounts count at 70% at any age.
Does this work on a building with more than four units?
Usually not as a residential-style file. Buildings with five or more units tend to move to commercial-style underwriting on net operating income. A broker can tell you which lenders in the network will review the file.
Next Step
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. Lendmire is a mortgage broker that arranges these loans through select lenders in its network, with consumer mortgage lending licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs and eligibility change. This is not a commitment to lend.
Borrowers who want to see how a cash-out works without leaning on personal income can read Lendmire’s piece on an asset-based cash-out refinance without verifying personal income.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
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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. OCC Comptroller’s Handbook, Commercial Real Estate Lending
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Asset-Based Cash-Out Refinance Program at 50% LTV
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.