The Quick Read: Yes, but only on the asset depletion path, where your portfolio is converted into monthly qualifying income, and only through select programs that accept investment property, typically at 65% loan-to-value on a purchase, with the loan in your own name, so many Montana buyers whose rent comfortably covers the payment are better served by a DSCR loan. A DSCR loan is reviewed for the property’s rent against its own payment. Asset depletion qualifies you. Which one fits depends on how much rent the property earns and how deep your balance sheet runs.
- Asset depletion divides your usable assets by 60 months to create income, which then runs through a debt-to-income test.
- The other asset-based path, the asset qualifier path, covers principal residences and second homes, not rentals.
- On a rental, expect 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting.
- Down payment and closing funds come out of the pool first, so the income figure is always smaller than your statements suggest.
- Nothing is sold. The assets are counted, not spent.
What Asset Depletion Actually Does
Asset depletion treats your savings as if you would draw them down evenly over a set number of months. The lender takes the usable balance, divides it by 60, and calls the result monthly income. Then it checks whether that income carries the housing payment and your other debts.
Two terms matter here. The debt-to-income test (DTI) compares your monthly debts to your monthly income. A haircut is the discount a lender applies to an asset because its value can move or is harder to reach. Cash gets no haircut. Stocks get one.
Across Lendmire’s wholesale network, two different asset-based paths exist, and a borrower is reviewed on one at a time.
- Asset qualifier path: eligible assets, after the credit percentages, must equal or exceed the entire loan. No employment or income is documented. This path covers principal residences and second homes.
- Asset depletion path: eligible assets, after haircuts, become monthly income through the 60-month division. This is the only asset-based path that accepts investment property.
Both paths document the assets in full. “No income documentation” never means “no documentation.” You hand over statements either way.
Does It Work on a Montana Rental Property?
It works on the depletion path, with tighter leverage and a bigger asset requirement than a primary residence. Montana adds no special rule here. The program terms are the same in every state where it is offered, and Lendmire’s consumer mortgage lending is licensed in 16 states, Montana among them.
Here are the figures that matter for a rental, all through select programs and subject to underwriting:
- Leverage: up to 65% loan-to-value (LTV, the loan as a share of the property’s value) on a purchase or rate-and-term refinance of an investment property. Up to 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets.
- Loan size: $125,000 to $3,500,000.
- Minimum assets: the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, qualified assets never drop below $250,000 liquid.
- Credit: the lender’s score-and-loan-amount matrix applies. A first-time investor needs a 700 score on this path.
- Housing history: 0x30x12. One 30-day late in the last twelve months is considered case by case. A housing event needs four years of seasoning.
For comparison, a principal residence or second home on the same path can reach 80% on a purchase or rate-and-term refinance and 60% on a cash-out. The rental penalty is real: 15 points of leverage on a purchase.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Asset depletion is a consumer mortgage. That distinction drives most of the differences below.
The honest read: a Montana rental is eligible, but it is a niche fit. It suits someone who has a large portfolio, little documented income, and a property whose rent would not carry a DSCR file anyway.
The Math, Step by Step
The math is five moves: add up assets, apply haircuts, remove closing funds, divide by 60, and test DTI. The lender’s own calculation governs, and the figures below are illustrative.
On the depletion path, the credit each asset gets looks like this:
| Asset type | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
Not eligible on this 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. Cryptocurrency, precious metals, and collectibles 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 source reviewed by the lender.
Now run an example. Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, so $1,200,000 counts. Cash counts at 100%, so $300,000 counts. Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income.
That income then has to carry the full housing payment on the Montana rental plus your other debts through the DTI test. The Montana rent is not the hero of this file. Your balance sheet is.
One more step trips people up. Funds you use for the down payment and closing generally cannot also produce income. Pull those out before you divide. A $1.8 million portfolio that funds a large down payment may qualify on far less than you expect.
The asset qualifier path works differently, and it matters if you also shop for a Montana primary residence or second home. It needs no income at all, only assets that equal or exceed the whole loan:
| Asset type | Share that counts |
|---|---|
| Brokerage, CDs, money market, savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Take an $800,000 loan. Brokerage accounts of $330,000 count at 100%. A 401(k) of $300,000 under 59½ counts at 90%, or $270,000. Savings of $200,000 count at 100%. Together that is $800,000 of usable assets, which is reviewed on assets alone. This path allows up to 80% on a purchase and 75% on a refinance of a principal residence or second home, with loans to $4,000,000.
Asset Depletion vs. DSCR vs. Bank Statement
DSCR tests the house, asset depletion tests your portfolio, and a bank statement loan tests your deposits. Pick the one whose evidence you actually have.
| Factor | Asset depletion | DSCR | Bank statement |
|---|---|---|---|
| What qualifies you | Usable assets over 60 months | Property rent vs. its payment | Business or personal deposits |
| Best-fit borrower | Asset-rich, income-light | Rent covers the payment | Self-employed with strong deposits |
| Role of rent | Matters less | Central | Not the basis |
| Typical ownership | Individual name | LLC-friendly, per program terms | Varies by program |
| Loan purpose | Consumer mortgage | Business purpose | Consumer or business, by program |
DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. If your Montana rental rents well relative to its price, that path usually costs you less cash tied up and adds less to your personal DTI. The complete DSCR loans guide walks through how the coverage test works.
Some DSCR files with thin rent can pull in extra assets for support. An investor post on BiggerPockets describes this idea of assets supplementing weak rent. It is anecdotal, so treat it as proof the concept exists, not as a rule. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust.
Which Path Fits? Five Questions
Answer these in order.
1. Does the rent comfortably cover the full monthly obligation? If yes, start with DSCR.
2. Is most of your wealth in liquid, documentable accounts? If yes, asset depletion stays on the table. If it sits in a business, crypto, or collectibles, expect to convert it to seasoned cash first.
3. Are your balances at least the lesser of $1,000,000 or 1.25 times the loan? Below that, the depletion path generally does not work as your only income source.
4. Do you want the property in an LLC? Consumer mortgages are generally closed in an individual’s name, while DSCR is typically LLC-friendly, subject to program terms.
5. Will you add more financed properties? Each one adds debt to your DTI. Scaling is harder here than with DSCR.
Honestly, a toss-up case is the buyer with a deep portfolio and a rental that rents just under the line. DSCR with lower leverage might win on flexibility, though depletion could win on simplicity. Running both is cheap.
Montana Considerations
Montana’s expensive resort and college towns tend to have thin rent-to-price ratios, which is exactly why DSCR coverage can fall short. Steadily puts gross short-term-rental yields at roughly 3.7–4.5% in Whitefish and Bozeman. Meanwhile Rental Beast reports a statewide average apartment rent near $1,747, up just 0.39% year over year.
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. Asset depletion leans less on rent assumptions, which helps when local rules are in flux. Lendmire’s piece How an STR Investor Qualifies on Asset Depletion vs Rental Income covers that angle.
Seasoning and Documents
Seasoning is how long money has sat in your accounts. Lenders want proof the funds are really yours and not borrowed.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance, and legal-settlement funds are excused from that seasoning.
- Qualifier path: 60 days of seasoning and two months of statements per qualifying account.
- Everything else: the purchase contract, credit, and an appraisal. For a rental, the appraisal may include a rent schedule (Form 1007 for single-family, 1025 for 2–4 units).
Asset income can also supplement documented income, such as a pension or Social Security, up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
Risks and Limits
The biggest risk is simple: the number shrinks. Haircuts, the 60-month divisor, and closing funds all cut the income figure before the DTI test starts. Buyers who treat the full portfolio as income get a rude surprise. (Spreadsheets feel generous. Lenders do not.)
Other risks worth sizing:
- Portfolio drawdown. If the market falls after closing, your reserves shrink even though the loan is already in place.
- Personal DTI. The housing payment sits on your personal ledger. DSCR keeps more distance between the property and you.
- Occupancy honesty. The occupancy you declare has to match how you use the home. A second home is for your personal use. A rental is an investment property with its own, lower leverage.
- No guarantees. Every file is underwritten individually, and programs change.
Federal ability-to-repay rules require a good-faith determination of repayment ability based on income or assets, per the CFPB’s small entity compliance guide. That is why asset files still get a debt-to-income or similar test. “No income documentation” does not mean “no underwriting.”
Key Terms Defined
Asset depletion: a qualification method that turns usable assets into imputed monthly income without selling them.
Divisor: the number of months you divide usable assets by. This program uses 60.
Haircut: the discount a lender applies to an asset type, such as 80% credit for securities.
Debt-to-income (DTI): monthly debts compared to monthly income.
Seasoning: how long funds have been in your account before application.
DSCR: debt service coverage ratio, meaning the property’s rent divided by its monthly obligation.
Frequently Asked Questions
Can I use asset depletion for a Montana rental?
Yes, on the asset depletion path through select programs, at up to 65% on a purchase and 60% on a cash-out for investment property. The asset qualifier path does not cover rentals. Qualification stays subject to underwriting.
Do I have to sell my investments?
No. The lender counts the assets and does not require you to liquidate them. It does remove funds you use for the down payment and closing, since those cannot also generate income.
Does retirement money count?
It counts at 70% on the depletion path at any age. On the qualifier path, which is for primary residences and second homes, it counts at 90% under age 59½ and 100% at 59½ or older.
Can I hold the property in an LLC?
Generally not on an asset-based consumer mortgage, which is typically closed in your own name. DSCR loans are usually LLC-friendly, depending on program guidelines.
Is DSCR better for a rental?
Often, when the rent covers the payment, because it ties the loan to the property instead of your DTI. Asset depletion makes more sense when the rent is thin and your portfolio is deep.
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’s asset-based mortgage in Montana page presents the program for Montana borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. BiggerPockets: asset utilization discussion
2. Steadily: Montana short-term rental markets
3. Rental Beast
4. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Asset Depletion Income Is Calculated From Your Portfolio · Asset Depletion vs Bank Statement Loan After a One-Time Property Sale · Asset Depletion vs Bank Statements vs DSCR for a Luxury Rental Buyer
Guides: Asset-Based Mortgage in Montana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.