The Quick Read: The best program for you depends on whether your assets can cover the whole loan or must be turned into monthly income. The six-month reserve figure in the title is not a published requirement of either asset-based path. Reserves are a lender-set overlay, so the real questions are leverage, seasoning of your funds, and which path fits.
- On the asset qualifier path, eligible assets must equal or exceed the entire loan, and no employment or income is documented.
- On the asset depletion path, usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Cash-out leverage on the depletion path is up to 60% on a principal residence, a second home, or an investment property, subject to underwriting.
- Reserves on the qualifier path are none required at or below 75% loan-to-value. Above that, the lender sets them.
- Privately held company stock is not an eligible asset on either path.
What “Asset-Based” Means Here
Asset-based means the lender looks at what you own, not at a paycheck. It is easy to confuse with two other uses of the phrase, so here is the sorting.
| Meaning | What is judged | Who uses it |
|---|---|---|
| Borrower assets | Your balances, after credit percentages | Asset qualifier and depletion paths |
| Property cash flow | Rent against the payment | DSCR rental loans |
| Commercial asset-based lending | Collateral on a business credit line | Business borrowers |
The program here is the first row. Lendmire arranges it through asset-based mortgage programs placed with select lenders in its wholesale network. Lendmire is a broker, so the lenders review each file and make the decision.
The third row matters because “reserves” means something different there. In commercial asset-based lending, the word describes deductions the lender takes against collateral. In a home loan, reserves are money you still hold after closing. Search results mix the two, so keep them apart.
Rental-income financing is a separate product. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. This article is about qualifying on your balances instead.
Key Terms Defined
Cash-out refinance: a new, larger loan that pays off the old mortgage and hands you the difference. Corporate Finance Institute explains how it differs from a rate-and-term refinance, which changes the loan without taking cash.
Reserves: liquid funds you still hold after closing, counted in months of your housing payment.
Asset qualifier path: eligible assets cover the full loan amount, and no income is documented.
Asset depletion path: eligible assets, after haircuts, are divided by 60 months to create a monthly qualifying income.
Haircut: the share of a balance a lender will not count. A 70% credit means a 30% haircut.
Seasoning: how long funds must sit in your account before they count.
Loan-to-value (LTV): the loan amount divided by the appraised value.
Why “Only Six Months” Is the Wrong Question
Six months of reserves sounds like a low bar. Whether it is depends on what you are measuring it against.
A reserve month means one month of your full housing payment: principal, interest, taxes, insurance, and any association dues. Six months means six times that figure, held in liquid funds after closing. For a large balance, that can be a meaningful sum.
On the asset qualifier path, reserves are not the lever. Through select programs, none are required at or below 75% LTV, and above that the lender sets them. On the asset depletion path, there are no published reserve months. The lender may still attach a cushion to a particular file. Leverage, reserves, and pricing vary by lender and program, and final terms follow the full file review.
So a program that only needs six months is describing a lender overlay, not a standard. Your first job is to find out which overlay applies to your scenario. Your second is to see what the rest of the file demands in exchange.
A low-reserve headline can be offset elsewhere. A lender might cut leverage, ask for more seasoned funds, or raise the minimum credit score. The tradeoff is the thing to compare. Lendmire’s piece Can You Get Approved for an Asset-Based Cash-Out Refinance With Only Six Months Reserves? takes the approval question on its own.
Which Path Fits You
This program suits people with large balances and little documented income. Examples are retirees, sellers of a business, recipients of an inheritance or settlement, early-retired professionals, and households living on a portfolio. The question is whether your assets cover the loan outright or become income.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How you qualify | Assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived income, run through DTI |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property types | Principal residence or second home | Also investment property |
| Credit | 600 minimum score | The lender’s matrix |
A borrower is qualified on one path at a time. Never blend the two columns.
Every file is fully underwritten. The assets are documented with statements. The accurate phrase is no traditional personal-income documentation, pay stubs or employment verification, not “no documentation.” All figures here are ceilings and floors through select programs, subject to underwriting.
Cash-Out Leverage, Path by Path
Cash-out is where the paths differ most. Be exact about which path a figure belongs to.
Asset depletion path. Cash-out refinances reach up to 60% LTV on a principal residence, a second home, or an investment property. The same path offers up to 80% on a purchase or rate-and-term refinance for a principal residence or second home, and up to 65% for an investment property. Cash-out proceeds never count as qualifying assets. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Asset qualifier path. Leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published. Do not plan around a figure until a lender confirms it in writing.
An honest answer to “which program” often starts there. If you need cash out of a home, the depletion path has a published ceiling and the qualifier path has a lender-set answer. If you need a rate-and-term refinance or a purchase, the qualifier path is cleaner.
The CFPB’s report on cash-out refinance borrowers describes a cash-out refinance as tapping home equity: you borrow more than you owe and take the difference. That idea is the same here. Only the way you qualify changes.
What Counts as an Asset
Credit percentages decide how much of each balance the lender counts. They differ by path.
Asset qualifier path:
- Brokerage accounts, certificates of deposit, money market, and savings count at 100%.
- Retirement accounts, such as a 401(k) or IRA, count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Asset depletion path:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Several things are not eligible on the depletion path: 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.
Privately held company stock is not an eligible asset on either path. A founder’s or shareholder’s route is documented liquid assets. That means seasoned proceeds from a sale or buyout, cash, public securities, and retirement accounts at their haircuts.
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. The lender reviews the source of those funds.
Worked Example: Qualifier Path
Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, $300,000 in a 401(k), and $200,000 in savings. You are under 59½.
- Brokerage counts at 100%: $330,000.
- The 401(k) counts at 90%: $270,000.
- Savings counts at 100%: $200,000.
Usable assets total $800,000, which equals the loan, so the file is reviewed on assets alone. The arithmetic is illustrative, and the lender’s own calculation governs.
Notice what the example does not show. It shows no reserves, because none are required at or below 75% LTV on this path. If the loan sat above 75% LTV, the lender would set a cushion, and those funds would need to be separately documented. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the file.
Worked Example: Depletion Path
Say you hold $1,500,000 in securities and $300,000 in cash.
- Securities count at 80%: $1,200,000.
- Cash counts at 100%: $300,000.
- Usable assets total $1,500,000.
- Divided by 60 months, that is $25,000 of monthly qualifying income.
That income then carries the housing payment and your other debts through the debt-to-income test. 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.
On this path, 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 also need no less than $250,000 liquid. A first-time investor needs a 700 score.
Can Cash-Out Proceeds Count as Reserves?
Not toward qualifying assets. On the depletion path, cash-out proceeds never count as qualifying assets. Whether proceeds can count toward a lender-set reserve cushion is a separate question, and lenders answer it differently.
For contrast, agency rules for conventional loans take a firm line. The Fannie Mae Selling Guide on minimum reserve requirements treats reserves as liquid assets left after closing and lists which sources are acceptable. Those rules govern agency loans, not this program. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The practical rule is simple. Plan to hold any required cushion in separate, sourced funds outside the money you are pulling. If a lender says proceeds count, get that in writing before you build a plan on it.
Double counting is the related trap. Assets used to qualify are not automatically free to count again as reserves. On the qualifier path, your assets must cover the entire loan. Whether the same dollars also satisfy a lender’s cushion depends on that lender’s overlay, so ask before assuming.
Seasoning: When Your Money Counts
Funds have to sit before they count. The rule depends on the path.
On the qualifier path, you need 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days.
Exceptions exist on the depletion path. Sale-of-business, inheritance, and legal-settlement funds are excused from that seasoning.
Moved money is a common stumbling block. If you shift funds between accounts a week before applying, expect the lender to ask where they came from. Keep your statements clean for the whole period.
Choosing the Best Asset-Based Cash-Out Refinance Program for Your Situation
No single program wins for everyone, and Lendmire does not rank lenders. The best program for your situation depends on property type, credit profile, leverage need, and how your assets are held. A broker that shops multiple wholesale lenders matches the scenario to the program, and that is the job here.
Run your file through these questions in order:
1. Is the property a home or a rental? Principal residences and second homes can use either path. Investment property is available only on the depletion path, as business-purpose financing.
2. Do your usable assets cover the entire loan? If yes, the qualifier path may fit, subject to underwriting.
3. Do you need cash out? If yes, the depletion path publishes up to 60% LTV. The qualifier path leaves that to the lender. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
4. How is your wealth held? A retirement-heavy portfolio counts at 90% to 100% on the qualifier path and 70% on the depletion path. A securities-heavy portfolio counts at 100% for brokerage on the qualifier path and 80% on the depletion path.
5. How old are your funds? Fresh deposits may fail seasoning unless they are inheritance, settlement, or business-sale proceeds on the depletion path.
6. Does a lender add a reserve cushion? Ask which overlay applies, and what it counts.
Across Lendmire’s wholesale network, the strictest overlays tend to show up on larger balances and lower credit scores. A file with high usable assets, clean seasoning, and moderate leverage tends to have the most options.
How Underwriting Treats the File
Underwriting is full, not light. The steps look like this.
1. Eligibility screen. Property type, occupancy, ownership, and your credit are checked. The qualifier path has a 600 minimum score, and the depletion path follows the lender’s matrix. Housing history of 0x30x12 is the standard, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
2. Asset documentation. Statements are collected and the credit percentages applied.
3. Valuation. An appraisal sets the value the LTV cap applies to. For small rental properties, the forms are the 1007 rent schedule and the 1025 small residential income report.
4. Sizing. The loan is the smaller of what LTV allows and what your assets support.
5. Payoff and closing. The old mortgage is paid off. Proceeds are the new loan minus payoff, costs, and any holdbacks.
Step 5 is where people get surprised. A cash-out can return much less than the headline, because the payoff and costs come out first.
Who Should Look Elsewhere
This path is not for everyone.
- If your balances are modest and your income is solid, a standard documented loan may be simpler.
- If the assets are mostly private company shares, the program will not count them, and the work is converting them to seasoned cash.
- If you need leverage above the published ceilings, this is not the product.
- If you plan to buy a rental and qualify on its rent, DSCR financing is the right lane.
- If you qualify through deposits into a business account, a bank statement loan fits that borrower.
Common Pitfalls
- Assuming the six-month number is universal. It is an overlay, not a published standard on either path.
- Counting the check you are about to receive. Cash-out proceeds never count as qualifying assets on the depletion path.
- Blending the paths. A figure from one path does not carry to the other.
- Letting funds sit unseasoned. New deposits can fail the statement test.
- Overstating retirement balances. They count at 70% on the depletion path, and 90% under 59½ on the qualifier path.
- Skipping the written confirmation. If a lender’s reserve treatment drives your decision, get it in writing.
Frequently Asked Questions
Is six months of reserves required on an asset-based cash-out refinance?
Not as a published standard. On the qualifier path, reserves are none required at or below 75% LTV, and above that the lender sets them. On the depletion path, no reserve months are published. A specific lender may still attach a cushion, so confirm it before you plan around it. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Can I use my retirement account to qualify?
Yes, in part. On the qualifier path, retirement balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age. Both are subject to underwriting.
Does privately held stock count toward the loan?
No. The route is documented liquid assets, such as seasoned proceeds from a sale or buyout, cash, public securities, and retirement accounts at their haircuts.
What is the maximum cash-out leverage?
On the depletion path, up to 60% LTV for a principal residence, second home, or investment property. On the qualifier path, cash-out leverage is lender-set and not published. Every figure is a ceiling through select programs, never an offer. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Is this a no-documentation loan?
No. Every file is fully underwritten, and your assets are documented with statements. What you skip is tax returns, pay stubs, and employment verification.
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. The consumer program is available through select lenders in the 16 states where Lendmire is licensed for consumer lending, subject to lender guidelines and not a commitment to lend.
Reserve rules differ from lender to lender, so the strongest file is the one with clean, seasoned balances and a clear answer on how the cushion is counted.
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.
For the mechanics of pulling equity out of a rental property, see 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
1. Corporate Finance Institute: Cash Out Refinance
2. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
3. Fannie Mae Selling Guide B3-4.1-01: Minimum Reserve Requirements
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 to Go Fixed
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
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.