The Quick Read: A property with no mortgage can still carry a cash-out refinance, and an asset-based program drives lender review on the borrower’s documented savings and investments instead of paychecks. The program that fits depends on whether assets cover the whole loan or are converted into qualifying income. Both paths are underwritten and subject to lender guidelines.
- The asset qualifier path needs eligible assets equal to or greater than the entire loan. It documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create monthly qualifying income, which then runs through the debt-to-income test.
- Owning the home free and clear does not raise the leverage ceiling. A loan on a home with no lien is still a cash-out refinance.
- Privately held company stock is not an eligible asset on either path.
- Lendmire is a broker. It matches your statements and property to a program through select lenders in its wholesale network.
Why a Home With No Mortgage Is Still a Cash-Out Refinance
A new loan on a home with no mortgage is a cash-out refinance. There is no existing loan to pay off, so the loan proceeds, less costs, come to you as cash. Lenders do not treat “no lien” as a limited cash-out. The cash-out leverage limits apply from the first dollar.
That surprises many borrowers. They assume a paid-off home earns a higher ceiling. It does not. On the asset depletion path, the cash-out ceiling is 60% of value on a principal residence, a second home, or an investment property. Owning outright simply removes the payoff line from the settlement statement.
Agency programs draw similar lines. The Fannie Mae Selling Guide covers cash-out refinances and an exception for recent cash purchases called delayed financing. Its conditions include an arm’s-length purchase and a settlement statement showing no mortgage financing. That is the agency rulebook and not this program’s. Any ownership seasoning on an asset-based file is set by the lender, so confirm it before you apply.
Two Asset Paths, One Borrower on One Path at a Time
Asset-based qualifying comes in two forms, and a borrower is qualified on one at a time. The first says your assets cover the loan. The second turns your assets into income. Never blend the two tables, because the percentages and leverage differ.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Eligible assets cover the whole loan | Assets divided by 60 months become income |
| Income documented | None | Derived income through the DTI test |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Occupancy | Principal residence or second home | Also investment property |
| Cash-out leverage | Set by the lender, not published | 60% on all occupancies |
| Credit | 600 minimum score | The lender’s matrix |
Through select programs, the qualifier path allows up to 80% on a purchase and 75% on a refinance, on a principal residence or second home. The depletion path allows up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance, on a principal residence or second home. For an investment property on that path, the figures are up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. All figures are ceilings, subject to underwriting.
The Asset Qualifier Path: Assets Cover the Loan
The qualifier path suits a borrower whose balances are large and whose documented income is small or absent. Retirees, business sellers, and people living off a portfolio fit here. The lender documents no employment or income, and the review of the borrower’s ability to repay rests on the assets.
Each asset counts at a percentage of its balance:
- Brokerage accounts, certificates of deposit, money market, and savings count at 100%.
- Retirement accounts count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Here is the shape of a qualifying file, shown as an illustration only. A borrower seeks an $800,000 loan. The borrower holds $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under age 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That is $800,000 of usable assets, which equals the loan, so the file is reviewed on assets alone. The lender’s own calculation governs.
The qualifier path asks for 60 days of seasoning and two months of statements for each qualifying account. Reserves are not required at or below 75% loan-to-value. Above that, the lender sets them.
Cash-out on this path is a lender decision, and the amount is not published. Do not plan around a qualifier-path cash-out figure until a lender confirms one in writing. When a borrower needs cash from a paid-off home, the depletion path is the one with published cash-out leverage.
The Asset Depletion Path: Assets Become Income
The depletion path converts assets into a monthly qualifying income. Usable assets are divided by 60 months. That income must then carry the housing payment and other debts through the debt-to-income test. Cash-out proceeds never count as qualifying assets.
Haircuts on this path are heavier than on the qualifier 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%.
An illustration shows the mechanics. A borrower holds $1,500,000 in securities (80%, so $1,200,000) and $300,000 in cash (100%, so $300,000). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. The lender then tests that income against the housing payment and other debts.
Asset depletion carries its own minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is the only income source, liquid assets cannot fall below $250,000. Asset-derived income may also supplement documented income up to a 45% debt-to-income ratio, and then the minimum-assets rule is waived.
Seasoning differs from the qualifier 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.
Which Assets Count and Which Do Not
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Savings, money market | 100% | Cash accounts 100% |
| Certificates of deposit | 100% | 100% |
| Brokerage and securities | 100% | 80% |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not published | 60% |
| Custodial, escrow, foreign funds | Not published | Not eligible |
Several other asset classes are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles, business accounts beyond the borrower’s ownership share, and pledged or borrowed funds. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender then reviews the source of that cash.
Privately held company stock is the case founders ask about most. It is not an eligible asset on either path. A shareholder’s route is documented liquid assets: seasoned proceeds from a sale or buyout, cash, public securities, and retirement accounts at their haircuts.
Choosing the Best Program for Your Situation
The best program for your situation depends on your balances, your age, the property, and the leverage you need. No single program wins for every borrower. A broker that places files across several lenders matches the scenario to the program. Lendmire works this way through its asset-based mortgage programs.
| If you are… | Consider |
|---|---|
| Holding enough assets to cover the whole loan | Asset qualifier path |
| Holding a large portfolio but a smaller loan need | Asset depletion path |
| Over 59½ with a large retirement balance | Qualifier path, where retirement counts at 100% |
| Under 59½ with most wealth in a 401(k) | Qualifier path at 90%, or depletion at 70% |
| Seeking cash out of a paid-off primary or second home | Depletion path at up to 60% |
| Seeking cash out of a paid-off investment property | Depletion path, business-purpose, up to 60% |
Think through the trade-offs before choosing. The qualifier path carries a lower credit floor and uses assets at full value, but cash-out on it is not published. The depletion path publishes cash-out leverage, but it discounts assets more heavily and requires the income to pass a debt-to-income test. For some borrowers the stronger play is a smaller loan on the qualifier path. For others, depletion is the only route that gives a published cash-out ceiling.
Lenders across the wholesale network differ in how they read statements and how they treat borderline credit. A broker can place a file with the lender whose overlays match the borrower, instead of the borrower applying one lender at a time.
Where the General Rule Breaks
The rule says assets qualify the loan. These cases bend that rule.
Investment property. Investment property is eligible only on the asset depletion path, where the loan is business-purpose. Cash-out on it is capped at 60% of value. A first-time investor on this path needs a 700 credit score. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Business-purpose rental loans are reviewed differently from a standard owner-occupied mortgage. The federal Regulation Z rule exempts credit extended primarily for a business purpose. If the rent is the main story, a DSCR cash-out refinance on a paid-off rental qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Asset-based qualifying fits better when rent is thin and balances are strong.
Old liens on title. A forgotten HELOC or lien means the home is not free and clear. The lender confirms title and any liens. An open line must be paid and closed at settlement, and that reduces your net cash.
Credit events. Housing history is reviewed at 0x30x12. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs four years of seasoning.
Borrowed or pledged funds. Money you borrow against another asset does not count. Cash-out proceeds from this very loan cannot be counted as qualifying assets either.
Short-term rental income. 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.
The Documentation Checklist and Process
“No income documentation” does not mean “no documentation.” The file is fully underwritten. The program asks for no traditional personal-income documentation, pay stubs, or employment verification on the qualifier path, but it asks for plenty else.
1. Gather statements. Collect two months of statements for each qualifying account on the qualifier path. On the depletion path, collect statements at least 120 days old plus the latest one within 45 days.
2. Document large deposits. Source any recent deposit. Inheritance, sale-of-business, and settlement funds need paperwork showing where the money came from.
3. Prove title and liens. Expect a title review, recent tax bills, and confirmation that any old HELOC is paid and closed.
4. Order the appraisal. The appraisal sets value, and value sets the leverage ceiling that caps your cash.
5. Pull credit. The credit check is part of every file. The program never promises approval.
6. Confirm path and leverage. The broker confirms which path fits and what the lender’s matrix allows.
Costs, Risks, and When Not to Do It
A cash-out loan on a paid-off home creates a payment where none existed. The home becomes collateral. That is the real cost of the cash.
Net proceeds fall below the loan amount because settlement costs and any liens paid at settlement reduce what you receive. Cash-out does not mean cash in the full amount. Ask for a settlement reconciliation early so you know the net figure.
Skip this route if the need for cash is small and short-term. A HELOC may serve better in that case. Skip it too if your portfolio income is already stretched, because depleting retirement assets to fund a new payment shortens your runway. Retirees should compare this loan with the alternatives before putting a paid-off home at risk.
Key Terms Defined
Free and clear: a property with no mortgage or other lien recorded against it.
Cash-out refinance: a new loan whose proceeds, after costs, are paid to the borrower as cash.
Asset qualifier: a path where eligible assets, after credit percentages, must equal or exceed the whole loan.
Asset depletion: a path where usable assets divided by 60 months become qualifying monthly income.
Seasoning: the length of time funds have sat in an account or a property has been owned before a lender will count them.
Frequently Asked Questions
Is a loan on a home with no mortgage still a refinance?
Yes. Lenders still call it a cash-out refinance, even though there is no loan to pay off. The loan proceeds, less costs, come to you, so cash-out leverage limits apply.
Does owning the home outright raise my loan limit?
No. Free-and-clear ownership removes the payoff but leaves the ceiling in place. On the asset depletion path, cash-out is up to 60% of value on a principal residence, second home, or investment property, subject to underwriting.
Can I use retirement accounts to qualify?
Yes. 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.
Does privately held company stock count as an asset?
A founder’s route is documented liquid assets, such as seasoned proceeds from a sale or buyout, cash, public securities, and retirement accounts at their haircuts.
Do I need income documentation?
Not on the qualifier path, which documents no employment or income. On the depletion path, assets are converted into income, and that income goes through the debt-to-income test. Assets are documented with statements on both paths.
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 offers consumer mortgage lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Programs and terms are subject to underwriting and change, and nothing here is a commitment to lend.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
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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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. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
2. eCFR, 12 CFR 1026.3, Exempt Transactions
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 in Retirement on a Fixed Income
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.