The Quick Read: Yes, but narrowly: select programs on the asset depletion path will consider an investment property at up to 65% loan-to-value on a purchase, subject to underwriting, while the asset qualifier path covers only primary and second homes, so most rental buyers end up on DSCR.
- The asset qualifier path, where assets cover the whole loan, is built for primary residences and second homes.
- The asset depletion path turns usable assets into monthly income and reaches investment property, but at lower loan-to-value than a primary home gets.
- On either path the assets are fully documented, so none of this is a no-paperwork loan.
- A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and it is usually the cleaner fit for a pure rental.
A New Mexico investor with a large portfolio and little taxable income is the typical reader here. The question is which door the loan walks through, and the answer depends on how much leverage you need and how the rent looks.
Two Asset Paths, and Only One Reaches a Rental
Asset-based mortgages come in two forms, and a borrower is reviewed on one at a time. The asset qualifier path asks whether eligible assets equal or exceed the entire loan amount. If they do, no employment or income is documented. The asset depletion path divides usable assets by 60 months to create a monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
For a rental, only the depletion path is on the table. Across the wholesale network Lendmire works with, the qualifier path stays with primary residences and second homes. The depletion path will look at an investment property through select programs, but the ceiling drops.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| Rental property | Not available | Select programs only |
| Purchase LTV | Up to 80% (primary or second home) | Up to 65% on investment property |
| Cash-out LTV | Set by the lender, not published | Up to 60% on investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Income documented | None | Derived from assets |
Those are ceilings, not offers. Every file is underwritten individually, and the figures can change as programs change.
How the Depletion Math Works on an Investment Property
The depletion path trims each asset by a haircut, divides what remains by 60 months, and tests the result against your debts. Consider an illustration: $1,500,000 in securities, counted at 80%, gives $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 of usable assets, and divided by 60 months it yields $25,000 of monthly qualifying income. The lender’s own calculation governs the real file.
The haircuts on this path are these:
| Asset | 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% |
Several items do not count at all on this path. These include custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units. Cryptocurrency, precious metals and collectibles are not published as eligible either. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Three other points matter before you plan around this path:
- Minimum assets. 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, liquid assets also cannot fall below $250,000.
- Seasoning. Statements must be at least 120 days old at application, plus one statement within 45 days. Funds from a business sale, inheritance or legal settlement are excused from that seasoning.
- Credit. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor needs a 700 score. Housing history is 0x30x12, and one late payment in the last twelve months is considered case by case. A housing event needs four years of seasoning.
Funds earmarked for the down payment, closing costs and reserves cannot also support your income. Cash-out proceeds never count as qualifying assets. The calculation is a qualifying convention, not a liquidation plan, so you keep the portfolio.
Why the Rule Is Program Design, Not Law
Nothing in federal law forbids qualifying on assets. The ability-to-repay rule in Regulation Z lets a creditor look at income, at assets other than the home itself, or at both. The constraint on rentals comes from how these programs are built. Federal rules also treat credit extended primarily for a business or commercial purpose differently, and that is the world DSCR loans live in. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Why DSCR Usually Wins for a Pure Rental
DSCR tests the property, not the person. Rent is divided by the full monthly obligation, which covers principal, interest, taxes, insurance and any HOA dues. A ratio of 1.00 or higher is a common program floor, and some select lenders review lower scenarios with adjusted loan-to-value and terms. DSCR loans are designed for non-owner-occupied investment properties. Your personal income and portfolio never enter the calculation. For a deeper walk-through, the complete DSCR loans guide covers requirements and structure.
| Factor | Asset Depletion | DSCR | Bank Statement |
|---|---|---|---|
| Reviewed on | Imputed income from assets | The property’s rent | Deposit-based income |
| Best fit | Asset-rich, income-light | Rentals with solid rent | Self-employed owners |
| Rent counted | No | Yes | No |
| Rental-friendly | Narrowly | Yes | Limited |
Operators who place these files see the same pattern. A rental with healthy rent tends to clear DSCR with room to spare, and personal assets then serve as reserves rather than qualifying income. Entity ownership is also a DSCR strength, depending on program guidelines. The depletion path has real value in one case: a thin-rent property where the rent will not cover the payment, because depletion ignores rent altogether.
Which Investor Should Choose Which Path
Here is how the decision usually breaks down:
- Retiree living on a portfolio, buying a rental. DSCR is typically the first look. The depletion path is the fallback if rent is thin and the borrower can accept 65% loan-to-value.
- Business seller with a large cash balance. The seasoning exemption for sale proceeds helps on the depletion path. DSCR still tests the rental on its own rent.
- First-time investor. DSCR is usually more practical here. The depletion path asks for a 700 score from a first-time investor, and the minimum-assets tests are demanding.
- Buyer who also wants a home to live in. Use the asset qualifier path or the depletion path for the residence. Run the rental as a separate DSCR file.
- Short-term rental buyer. Lendmire’s piece How an STR Investor Qualifies on Asset Depletion vs Rental Income covers that comparison. 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.
What This Means in New Mexico
Program figures do not change by state, and New Mexico is one of the 16 states where Lendmire’s consumer lending is licensed. What changes locally is the rent-to-price relationship. Whether rent covers the payment in Albuquerque, Santa Fe or a smaller market decides whether DSCR works cleanly or whether a thin-rent file pushes you toward the depletion path.
Key Terms Defined
Asset depletion: A method that divides usable assets by 60 months to create a monthly qualifying income.
Asset qualifier: A method where eligible assets must equal or exceed the whole loan, with no income documented.
Haircut: The share of an asset’s balance that a lender does not count, which reflects market risk or access limits.
Seasoning: The length of time funds have sat in an account before they can be counted.
DSCR: Rent divided by the full monthly obligation, used to test whether a rental carries its own debt.
Common Mistakes
Borrowers often assume asset-based means paperwork-light. It does not. Assets are documented on both paths, and the lender reviews their source. Others overlook that the down payment cannot be counted twice. A third mistake is applying a primary-home loan-to-value figure to a rental. The 80% purchase ceiling belongs to primary and second homes, not investment property.
One note on tax: tax treatment varies, so consult a qualified professional.
Frequently Asked Questions
Can a first-time investor use asset depletion for a rental?
Possibly, through select programs, but the bar is higher. A first-time investor on the depletion path needs a 700 credit score, and qualified assets must meet the minimum-assets test. Eligibility is subject to underwriting. Many first-time investors find DSCR a smoother route. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Do I have to sell investments to qualify?
No. The calculation converts balances into a qualifying income figure on paper. You keep the portfolio. Funds used for the down payment, closing costs and reserves are subtracted first, because they cannot also support your income.
Can crypto, gold or collectibles count as assets?
They 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 then reviews the source of those funds.
Does the rental’s rent count toward asset depletion qualifying?
No. On the depletion path, the file is reviewed on income derived from assets, so rent does not drive the decision. On a DSCR file, rent is the qualifier, and that difference is why the two paths suit different properties.
Can I use asset depletion for my home and DSCR for my rental?
Yes, they are separate loans with separate files. Each borrower is reviewed on one path per loan. Many portfolio holders structure it this way.
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. Call 828-256-2183 or request a quote.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in New Mexico page presents the program for New Mexico borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB, Regulation Z § 1026.43, Minimum Standards for Transactions Secured by a Dwelling
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: How Asset Depletion Income Differs on a Primary Home vs Rental · How Asset Depletion Converts Savings Into Qualifying Income · How to Qualify for a Bank Statement or Asset Depletion Loan as a Rental Investor
Guides: Asset-Based Mortgage in New Mexico
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.