The Quick Read: Yes, but only on the asset depletion path, through select programs, and with tighter leverage than a primary home gets. Asset depletion turns your balances into a monthly qualifying income. It never asks you to sell anything. For most pure rentals, DSCR is the cleaner fit, and a few files work best with both.
- The asset depletion path allows investment property at up to 65% loan-to-value on a purchase, subject to underwriting.
- The asset qualifier path, which covers the whole loan with assets, is for principal residences and second homes only.
- Your assets are fully documented on either path. Only your income documentation changes.
- Program figures do not change by state, so a North Carolina buyer meets the same ceilings and floors as anyone else.
- A rental that covers its own payment often skips the balance-sheet test entirely by using DSCR.
Which Asset-Based Path Works for a Rental?
Only the asset depletion path reaches investment property. Across the wholesale network where Lendmire places files, two asset-based paths exist, and a borrower is reviewed on one at a time. The names sound alike, but they do different jobs.
The asset qualifier path compares your eligible assets to the entire loan amount. If the usable total equals or exceeds the loan, you qualify on assets alone, and no employment or income is documented. That path serves principal residences and second homes. It does not cover a rental purchase.
The asset depletion path converts usable assets into monthly income, divided over 60 months. That income then carries the full housing payment and your other debts through the debt-to-income test. This is the path that accepts investment property, at lower leverage than a home you live in.
Lendmire is a broker, not a lender. Its consumer mortgage business is licensed in 16 states, North Carolina among them, and it places these files with select lenders whose underwriters make the final call. Every figure here is a ceiling or floor, not an offer.
How Does Asset Depletion Income Get Calculated?
Usable assets divided by 60 months gives your qualifying monthly income. You first apply the program’s credit percentages (the haircuts), then divide what remains. The lender’s own calculation governs, so treat the example below as an illustration.
Picture a borrower with $1,500,000 in securities and $300,000 in cash.
1. Securities count at 80%, so $1,500,000 becomes $1,200,000.
2. Cash counts at 100%, so $300,000 stays $300,000.
3. Usable assets total $1,500,000.
4. Divide by 60 months, and the monthly qualifying income is $25,000.
That $25,000 then has to carry the housing payment and every other monthly debt through the debt-to-income test. The shorter the divisor, the more income you get, but the 60-month divisor is the one that applies here.
One step trips up many investors. Closing consumes cash, because the down payment and closing costs come out of the same balances that qualify you. Run the math on what remains after the deal funds, not on today’s statement total. Ask the lender how it treats funds needed to close before you build a plan around a borderline pool.
Which Assets Count on the Depletion Path?
On the asset depletion path, cash and CDs count at 100%, and everything else is discounted. Retirement accounts take a flat haircut at any age, which surprises borrowers used to age-based treatment on the qualifier path.
| Asset type | Share counted (depletion path) |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| 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, stock options, non-vested restricted stock units, and funds from non-regulated financial companies.
Cryptocurrency, precious metals, collectibles, and pledged or borrowed funds are not published as eligible on either path. The documented route is to convert them into a seasoned cash balance in a regulated account. The lender then reviews where the money came from.
What Does the Depletion Path Require?
Expect lower leverage, larger balances, and older statements. These are the figures for an investment property on the asset depletion path, subject to underwriting and the lender’s matrix.
- Leverage: up to 65% on a purchase or rate-and-term refinance, and 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, you also need at least $250,000 in liquid assets.
- Statements: each account’s statement must be at least 120 days old at application, plus a most recent statement within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning.
- Credit: the lender’s score and loan-amount matrix applies. A first-time investor on this path needs a 700 score.
- Housing history: 0x30x12 is the standard. One 30-day late in the last twelve months is considered case by case. A housing event such as a foreclosure needs four years of seasoning, and multiple bankruptcies are not eligible.
Some people hear “no income documentation” and assume nothing gets checked. That is wrong. The lender verifies ownership, seasoning, and source of funds on every account it counts. It also orders an appraisal and reviews title and insurance as usual.
Why Do Most Rentals Move to DSCR?
A rental that pays for itself rarely needs your balance sheet. 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.
The federal rule behind that distinction is plain. Under Regulation Z, section 1026.3, credit to acquire or maintain non-owner-occupied rental property is deemed business purpose. The same commentary draws a line at personal use: if you expect to occupy the property more than 14 days in the coming year, that treatment does not apply. America’s Credit Unions also notes that loans to entities such as LLCs fall outside the rule. The label “investment property” alone does not settle anything, as Compliance Alliance points out; the loan’s purpose does.
The practical result is that DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your traditional personal-income documentation and your portfolio stay out of the equation. Business-purpose loans can also close in an LLC, subject to lender program eligibility. The asset depletion path is a consumer mortgage, so standard consumer disclosures apply to it.
| Factor | Asset depletion | DSCR | Bank statement |
|---|---|---|---|
| What gets tested | Your balances as income | Rent versus payment | Income shown by deposits |
| Best fit | Asset-rich, income-light | Rentals that cash flow | Self-employed with deposits |
| Loan purpose | Consumer | Business | Consumer |
| Main weakness | Needs large balances | Thin rent hurts the ratio | Needs deposit history |
DSCR carries its own limits. A property whose rent falls short of its monthly obligation strains the ratio. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust. For the full picture of how these loans work, see Lendmire’s complete DSCR loans guide.
Thin Rent or Big Portfolio: Which Path Wins?
Choose by what your property earns and what your balance sheet holds. Here are two cases.
Say you buy a duplex whose rent comfortably covers the full monthly obligation. DSCR is the natural path. You keep your assets invested, and you avoid the minimum-assets rule and the extra haircuts.
Now consider a cottage whose rent covers only part of its monthly obligation. DSCR would leave you with a weak ratio and adjusted terms. If you hold $1,500,000 in usable assets, the depletion path’s $25,000 of monthly qualifying income may carry the file instead. The tradeoff is steep: 65% maximum leverage on a purchase means a large down payment, and that cash leaves your qualifying pool.
This is a genuine toss-up for some investors. A thin-rent property can look cheap but demand the most cash. Before you choose, compare both paths against the same property and the same statements.
Does North Carolina Change Anything?
No program figure changes in North Carolina. The percentages, divisor, and seasoning rules above are the same for a Charlotte buyer, a Wilmington buyer, or a mountain-town buyer. State facts such as taxes, insurance, and local prices are context for your cash flow, never program parameters.
Two points matter for a North Carolina rental. First, coastal and mountain properties can carry heavier insurance costs, and that pressure lands on a DSCR ratio more than on a depletion-path file. Second, 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. Lendmire’s piece How an STR Investor Qualifies on Asset Depletion vs Rental Income covers that split in depth.
Can You Combine Assets With Other Income?
Yes, in some cases. Asset-derived income may supplement documented income, such as a pension, up to a 45% debt-to-income ratio. When assets supplement income this way, the minimum-assets rule is waived. That helps borrowers whose documented income is real but short of what the payment needs.
Whether a lender credits projected rent from the property as documented income is that lender’s decision, so ask before you assume it.
Who Should Skip the Depletion Path?
Skip it when your balances are modest, your rent covers the payment, or you need most of your cash for the down payment. A pool near the $250,000 liquid floor leaves no cushion once you fund a 35% down payment. Skip it too if you plan to stay in the property more than a couple of weeks a year, since personal use changes how the loan is classified. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
It fits best for retirees, people who sold a business, recipients of an inheritance or settlement, and households living off a portfolio. These borrowers have large balances and little documented income. A first-time investor also needs a 700 score on this path, which screens out some otherwise strong files.
Key Terms Defined
Asset depletion: a qualification method that divides usable assets by 60 months to create monthly income, without selling anything.
Haircut: the share of an account’s balance a lender discounts, so a 70% credit means 30% is ignored.
Seasoning: the length of time funds must sit in your account before the lender counts them.
Debt-to-income (DTI): your monthly debts divided by your monthly income, which the depletion path runs on the derived income.
DSCR: debt service coverage ratio, meaning a property’s rent divided by its monthly obligation.
How Do You Prepare a File?
Start with statements, because their age drives eligibility. Gather every account you plan to count, and check that each statement meets the 120-day and 45-day rules. Move any crypto or other ineligible holdings into a regulated cash account early, so they season. Confirm your credit score against the 700 threshold if this is your first rental. Then compare the depletion path and DSCR on the same property before you write an offer.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion?
No. The lender runs a calculation on your balances. Your accounts stay invested, and nothing is withdrawn or liquidated to produce the qualifying income.
Can I count my 401(k) or IRA?
Yes, on the depletion path retirement accounts count at 70% at any age. On the asset qualifier path, which does not cover rentals, they count at 90% under age 59½ and 100% after. Access and vesting still get documented.
Can I buy the rental in an LLC?
It depends on the program. Asset-based loans are consumer mortgages, so entity ownership is limited. DSCR loans commonly close in an LLC, subject to program terms.
What if the rent does not cover the payment?
Asset depletion does not hinge on rent, so a thin-rent property can still work if your balances are large. DSCR programs below 1.00 coverage also exist through select lenders in the network, with adjusted leverage and terms.
Is asset depletion the same as no documentation?
No. Your assets are verified on both asset-based paths: ownership, seasoning, and source of funds. Only income documentation drops away. The appraisal, title, insurance, and credit review all remain.
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 programs based on your statements, the property, credit profile, leverage, and your goals.
Lendmire’s asset-based mortgage in North Carolina page presents the program for North Carolina borrowers.
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 traditional personal-income documentation, 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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References
1. CFPB Regulation Z, section 1026.3
2. America’s Credit Unions: Regulations and Business Loans
3. Compliance Alliance: Regulation Z and Investment Properties
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does a North Carolina Asset-Based Mortgage Require Tax Returns? · Can You Buy a Virginia Rental Property on Asset Depletion Income? · How a Lender Picks Between Asset Qualifier and Asset Depletion on a North Carolina File
Guides: Asset-Based Mortgage in North Carolina
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.