The Quick Read: Yes, but only on the asset depletion path, through select programs, where usable assets divided by 60 months become qualifying monthly income and an investment property tops out at 65% loan-to-value on a purchase, subject to underwriting. Pennsylvania does not change the method. The program, the borrower’s assets and the borrower’s other debts decide the outcome.
- The asset qualifier path covers the whole loan with assets, but it applies to principal residences and second homes, not rentals.
- A rental purchase runs on the asset depletion path: 65% on a purchase or rate-and-term refinance, 60% on a cash-out, subject to underwriting.
- Depletion requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never less than $250,000 liquid when assets are the only income source.
- Nothing is sold. The lender imputes income from the balances, and the borrower keeps the portfolio.
- If the rent is strong relative to the payment, a DSCR loan may fit better and can be compared side by side.
What Does Asset Depletion Income Actually Mean?
Asset depletion is a way to qualify, not a way to pay. The lender takes eligible balances, applies a percentage to each account type, and divides the result by 60 months. That figure is treated as monthly income, even though nothing is withdrawn.
Lendmire is a broker, so this runs through select lenders in its wholesale network. Across that network, the asset-based mortgage comes in two forms, and a borrower is reviewed on one at a time.
The first is the asset qualifier path. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
The second is the asset depletion path. Eligible assets, after haircuts, are divided by 60 months. The result runs through a debt-to-income test against the full housing payment and other debts.
Investment property sits only on the second path. That is the key fact for a Pennsylvania buyer who wants a rental.
Does Asset Depletion Work for a Pennsylvania Rental?
It does, on the depletion path, with lower leverage than a primary home gets. The state is context, not a program parameter. The same figures apply to a Pennsylvania borrower as to a borrower elsewhere, and consumer mortgage lending through the network is licensed in Pennsylvania among 16 states.
Here is how the leverage changes by occupancy on the depletion path:
| Occupancy | Purchase / rate-and-term | Cash-out |
|---|---|---|
| Principal residence | Up to 80% | Up to 60% |
| Second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
All figures are ceilings through select programs, subject to underwriting. They are not offers. A 65% purchase means the borrower brings at least 35% of the price in equity or cash, before closing costs.
Loan sizes on this path run from $125,000 to $3,500,000. Cash-out proceeds never count as qualifying assets, so a borrower cannot pull equity out and then use it to qualify.
Agency-eligible loans generally treat asset depletion differently, and investment property is where that approach tends to stop. That gap is why portfolio-style programs in a wholesale network matter for rentals.
How the Math Works, Step by Step
The arithmetic is short, but each step has a place where files slip. The lender’s own calculation governs, and the example below is illustrative.
1. Count eligible assets. Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
2. Remove what the purchase consumes. Funds that go to the down payment and closing costs leave the pool, so lenders generally count what remains after the purchase. The lender sets exactly how this is calculated.
3. Divide by 60 months. The result is the monthly qualifying income.
4. Run the debt-to-income test. That income must carry the new housing payment plus the borrower’s other debts.
5. Confirm the minimums. Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan balance. If assets are the only income source, liquid assets must also be at least $250,000.
For the example, take $1,500,000 in securities, counted at 80%, which is $1,200,000. Add $300,000 in cash at 100%. The usable total is $1,500,000. Divide by 60 months and the result is a monthly qualifying income figure that can then be tested against the borrower’s obligations.
That monthly figure then has to carry the housing payment and other debts through the debt-to-income test. A borrower with few other debts has room. A borrower with several loans may find the test, not the asset total, is the limit.
The depletion path does not count the property’s rent toward qualifying income. That helps when rent is thin against the payment. It also means strong rent earns the borrower nothing on this path.
Which Assets Count and Which Do Not
Cash and certificates of deposit are the cleanest assets. Securities and private stock count, but at a discount. Retirement balances count at 70% on the depletion path, regardless of age.
These do not count on the depletion path:
- Custodial accounts
- Deferred compensation
- Escrow accounts
- Foreign funds
- Cash on hand
- Stock options
- Non-vested restricted stock units
- 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 converting them to a seasoned cash balance in a regulated account. The lender then reviews the source of those funds.
A business account counts only up to the borrower’s ownership share, and that account type is not published as eligible either. A borrower with most of their wealth in a private business should expect the lender to look hard at what is truly liquid.
Seasoning and Statements: Where Files Get Stuck
The assets are documented on both paths. Skipping income documentation never means skipping documentation.
On the depletion path, statements must be at least 120 days old at application. The most recent statement must also be within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning, though the lender still reviews their source.
Three patterns create the most friction on these files:
- Recent transfers. Money moved between accounts in the last few months invites questions. A clean paper trail from the original account helps.
- Stale statements. An older statement passes the 120-day test, but only if a fresh one also arrives within the window the lender requires.
- Mixed ownership. Joint accounts, trusts and business accounts need ownership proof that matches the borrower on the loan.
Credit matters as well. The depletion path follows the lender’s credit matrix. A first-time investor needs a 700 score on this path. Housing history is 0x30x12, 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 4 years of seasoning.
Can the Same Assets Fund the Down Payment and Qualify?
They can, but only once. A dollar spent on the down payment is no longer a dollar that supports income. The pool shrinks first, then the divisor runs.
That is why a borrower who looks fine on paper can fall short after the purchase math. Picture a retiree with a large portfolio who plans a 35% down payment on a rental. The balance that remains after the purchase is the number that gets divided by 60. If it falls under the minimum-assets rule, the file stops there. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
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. A borrower with a pension or Social Security may find this blended route better than a pure depletion file.
Asset Depletion, Asset Qualifier, or DSCR: Which Fits a Rental?
For a pure rental purchase, the real choice is usually between asset depletion and DSCR. The asset qualifier path is out because it covers primary homes and second homes.
| Factor | Asset depletion | DSCR loan |
|---|---|---|
| What qualifies | Borrower’s assets | Property’s rent vs. payment |
| Rent counted | No | Yes |
| Investment leverage | 65% purchase, 60% cash-out | Set by program and ratio |
| Best fit | Thin rent, large portfolio | Strong rent, any portfolio |
| Personal DTI test | Yes | No |
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. The ratio is gross monthly rent divided by the housing payment. Select lenders in the network will look at ratios below 1.00, though leverage and terms adjust when they do.
The complete DSCR loans guide walks through that path. Run both against the same property. A duplex with solid rent may clear DSCR with room to spare. A low-rent property in a high-cost area may only work on assets.
Investors who rent short term should also read Lendmire’s article How an STR Investor Qualifies on Asset Depletion vs 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.
Pennsylvania Considerations for a Rental File
Pennsylvania rental stock ranges from city rowhomes to small multiunit buildings to suburban single-family homes. Rents and yields differ sharply by metro. A Pennsylvania rental-yield dataset shows that Philadelphia and Pittsburgh sit far apart on yield.
That spread matters for the choice of path. Where rent is thin against the payment, asset depletion can be the better lens. Where rent is strong, DSCR often carries the file with less capital tied up.
Property type affects the appraisal. A single-family rental is typically appraised on Form 1004, and a 2-4 unit building on Form 1025. Form 1007 is the rent schedule and mostly matters on the DSCR path. Whether a given lender accepts 2-4 unit properties on the depletion path varies, so confirm that before ordering anything.
Vesting needs a check as well. Depletion programs usually underwrite an individual. Buying through an LLC may be possible, subject to program terms, but the borrower and asset owner should line up with the title.
The Occupancy Trap
If the borrower plans to live in the property, it is not a rental. The leverage table for a principal residence or second home applies instead, and the asset qualifier path may open up.
The CFPB’s Regulation Z interpretation treats credit to acquire non-owner-occupied rental property as business purpose. It also carves out cases where the owner expects to occupy the property for more than 14 days in the coming year. Owner use changes the loan’s classification, so the borrower should state intent plainly at application.
An investor who plans to move in later should say so up front. A file written as a rental and then occupied is the kind that gets questioned.
Is It a Loophole? No.
Asset depletion is a recognized way to show repayment ability. A law-firm trade review of the CFPB’s non-QM guidance explains that a lender may base repayment ability on income, on assets, or on both. The same review notes that the lender must still consider and verify debts and debt-to-income or residual income.
That is why the depletion path runs a debt-to-income test while the qualifier path rests on assets alone. Both do real underwriting. Neither skips it.
Key Terms Defined
Asset depletion path: a qualifying method that divides usable assets by 60 months to create monthly income.
Asset qualifier path: a method where eligible assets must equal or exceed the whole loan, with no income documented.
Haircut: the share of an account’s balance that a lender does not count, because of market or withdrawal risk.
Seasoning: the length of time funds must have sat in an account before they count.
Debt-to-income ratio: monthly debts, including the new payment, divided by monthly qualifying income.
DSCR: gross monthly rent divided by the property’s housing payment, used for investor loans that qualify on rental income.
Which Path Fits Your Situation?
The decision runs on three questions, in this order:
1. Is the rent strong against the payment? If yes, price a DSCR loan first. It keeps more of the portfolio free and carries no personal debt-to-income test.
2. Is the portfolio large and the rent thin? If yes, asset depletion deserves a hard look. Check that usable assets after the purchase still clear the $1,000,000-or-1.25x minimum.
3. Is the borrower a first-time investor? If yes, plan for the 700 credit requirement on the depletion path. A borrower below it should expect DSCR or another route.
Frequently Asked Questions
Can I use asset depletion to buy a rental in Pennsylvania?
Yes, on the asset depletion path through select programs, subject to underwriting. Leverage on an investment property is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The asset qualifier path is limited to principal residences and second homes.
Do I have to sell investments or retirement funds?
No. The lender imputes monthly income from the balances and divides by 60 months. Retirement accounts count at 70% on the depletion path. The borrower keeps the portfolio, though funds used for the down payment and closing costs leave the usable pool.
How much do I need in assets?
Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are the only income source, liquid assets must also be at least $250,000. If asset income supplements documented income, the minimum-assets rule is waived, with a 45% debt-to-income cap.
Can I buy through an LLC?
It depends on the program. Depletion programs usually underwrite an individual, so the borrower and the title need to match. Confirm vesting with the lender before making an offer.
What if my property rents well?
Compare a DSCR loan. It is reviewed on rent against the payment and does not need the personal debt-to-income test. Select lenders will review ratios under 1.00, though leverage and terms adjust.
What if my wealth is in crypto or a private business?
Those are not published as eligible on either path. The documented route is converting the funds to a seasoned cash balance in a regulated account. The lender reviews the source of the funds.
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. All programs are placed through select lenders, are subject to underwriting, and are not a commitment to lend.
Lendmire’s asset-based mortgage in Pennsylvania page presents the program for Pennsylvania borrowers.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. SFR Analytics, Pennsylvania rental yields
2. CFPB Regulation Z, §1026.3 and official interpretation
3. Consumer Financial Services Review, CFPB and non-QM ability-to-repay
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 an Asset Depletion Loan Require Any Income? · Dividend Income vs Asset Depletion for a Second Home Jumbo Loan · DSCR vs Asset Depletion for a Retiree Using a Short-Term Rental Part-Time
Guides: Asset-Based Mortgage in Pennsylvania
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.