The Quick Read: Usually not as the first choice, though select programs allow it: the asset depletion path can finance a Virginia investment property at up to 65% loan-to-value on a purchase, subject to underwriting, while most rental buyers fit a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Loan-to-value (LTV) is the loan amount as a share of the property’s value. DSCR is the debt service coverage ratio: the monthly rent divided by the full monthly payment. Asset depletion turns your portfolio into qualifying income, and DSCR ignores your income and tests the building instead.
- The asset qualifier path, where assets cover the whole loan, is for principal residences and second homes, not rentals.
- The asset depletion path divides usable assets by 60 months to create income. Through select programs it reaches investment property at 65% on a purchase and 60% on a cash-out.
- A pure rental that rents well usually fits DSCR better, with different leverage and no personal income test.
- Virginia changes nothing in the program figures. What changes is how much rent a Virginia property throws off against its price.
Does Asset Depletion Work on a Rental?
Yes, on one path only, and only through select lenders. Across the wholesale network where Lendmire places consumer files, the asset depletion path accepts investment property, while the asset qualifier path does not. Plenty of explainers online contradict each other on this. The difference is the program. One path is built for a home you live in, and the other converts assets into income that a lender can test against debts.
Here is how the two paths work, since a borrower is reviewed on one at a time.
The asset qualifier path requires eligible assets, after credit percentages, to equal or exceed the entire loan. No employment or income is documented. It runs up to 80% LTV on a purchase and 75% on a refinance, on a principal residence or second home. Loans go up to $4,000,000, with a 600 minimum credit score, subject to underwriting. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The asset depletion path takes usable assets after haircuts, divides by 60 months, and treats the result as monthly income. That income must carry the new housing payment and your other debts through the debt-to-income test. On a principal residence or second home it reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out. On an investment property it caps at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loan amounts run from $125,000 to $3,500,000, through select programs.
That 65% ceiling is the catch. A buyer using DSCR on the same rental typically puts down far less, because the property’s rent carries the loan instead of your portfolio. Asset depletion on a rental asks for a lot of cash and a lot of seasoned assets.
Why DSCR Is the Usual Rental Route
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 rulemaking behind the ability-to-repay standard treats investment-purpose loans as business-purpose loans, which is why the lender looks at rent rather than your paycheck.
The practical effect is simple. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The lender wants a lease or an appraisal rent schedule, a credit review, and verified assets for the down payment and reserves. Your portfolio still matters, but as a source of cash to close rather than as income.
| Path | What is tested | Occupancy fit | Best-fit borrower |
|---|---|---|---|
| Asset qualifier | Assets cover the whole loan | Primary or second home | Cash-rich, income-light buyer |
| Asset depletion | Assets divided into income | Primary, second, investment | Big portfolio, thin rent or no rent |
| DSCR | Rent versus the full payment | Investment property | Rental that covers its payment |
| Bank statement | Deposits as income | Primary, second, investment | Self-employed with strong deposits |
Practitioner read: asset depletion wins when the rent is weak. A high-priced Virginia property, with its taxes and insurance, can leave coverage thin, and depletion ignores rent entirely. Some select DSCR programs review coverage below 1.00, but LTV and terms adjust, so leverage drops. If rent covers the payment with room to spare, DSCR is usually cleaner.
Which Assets Count on the Depletion Path
Cash and CDs count at full value, while market-based and retirement assets are trimmed. Those are the haircuts on the asset depletion path, subject to underwriting. They are lender policy, set program by program. A law-firm review of an OCC bulletin on asset dissipation notes that federal underwriting rules and Appendix Q set no asset haircuts, amortization periods, or return assumptions, which is why the divisor differs from lender to lender.
| Asset type | Share that counts | Note |
|---|---|---|
| Cash accounts | 100% | Checking and savings |
| Certificates of deposit | 100% | Full balance |
| Securities | 80% | Stocks, bonds, funds |
| Private stock | 75% | Documented ownership |
| Retirement accounts | 70% | At any age |
| Real-estate equity | 60% | Subject to review |
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, collectibles, and borrowed or pledged funds are not published as eligible either. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
Documentation is real. The statements must be 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. Lack of income paperwork never means lack of paperwork.
Credit matters too. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700 score. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case, and a housing event needs four years of seasoning.
Two minimums apply. Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 liquid.
A Worked Example: Same Buyer, Two Routes
Say a retired Virginia investor holds $1,500,000 in securities and $300,000 in cash and wants a rental purchase. The numbers below are illustrative, and the lender’s own calculation governs.
Route one, asset depletion. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income must carry the housing payment and other debts through the debt-to-income test. The purchase is capped at 65% LTV on an investment property, so the buyer brings substantial cash to the table. Lenders generally net out cash needed to close before dividing, so the pool shrinks as the down payment grows.
Route two, DSCR. Assume a modeled lease that covers the full monthly obligation at roughly 1.2x. The lender checks the lease or appraisal rent schedule, credit, reserves, and sourced funds for the down payment. Your income is not part of the test. The portfolio funds the down payment instead of generating the income.
Where does each route fail? Depletion fails when the usable pool is too small for the loan, or when other debts crowd the debt-to-income test. DSCR fails when rent does not cover the payment. At that point a select lower-coverage program may apply, with lower leverage and adjusted terms.
The honest broker take: the buyer with strong rent should lean DSCR and keep the portfolio invested. The buyer with thin rent and a very large portfolio should price both. Lendmire’s piece How an STR Investor Qualifies on Asset Depletion vs Rental Income walks through the same trade-off for short-term rentals.
Which Path Fits You? Four Questions
1. Will you live in the property? If yes, a primary-residence asset path is on the table at higher leverage. If it is a pure rental, DSCR is the default and depletion is the exception.
2. Does the rent cover the full payment? If comfortably, use DSCR. If not, price depletion or a select lower-coverage DSCR program.
3. Is your usable asset pool large enough? Check the lesser of $1,000,000 or 1.25 times the loan, plus the $250,000 liquid floor if assets are your only income source.
4. Who will hold title? An individual borrowing for personal-use reasons can still be in consumer territory. Loan purpose, not collateral, controls the rules. Federal rules also exempt credit to non-natural persons such as an LLC, and DSCR loans to an LLC are available subject to program terms.
What Changes in Virginia?
Not the program. The leverage, haircuts, and seasoning above do not change by state. Lendmire’s consumer mortgage lending is licensed in 16 states, Virginia among them, so a Virginia buyer can run this asset-based file through the brokerage.
What does change is the property. In higher-priced parts of the state, such as Northern Virginia, rent often covers less of the payment, which can push a buyer toward depletion or a lower-coverage DSCR review. In lower-priced markets, rent covers more of the payment and DSCR tends to be simpler. State facts like taxes and insurance are context for the rent math, not program rules. Tax treatment varies; consult a qualified professional.
If you plan to live in one unit or use the home part-time, how the lender classifies the occupancy matters. Primary-residence and second-home rules carry higher leverage than investment rules.
Common Mistakes
- Assuming portfolio size equals approval. The pool must clear the minimums, and credit and debt-to-income still apply.
- Counting retirement money at full value. On the depletion path it counts at 70% at any age.
- Ignoring seasoning. Statements 120 days old plus one within 45 days catch late movers off guard.
- Spending the pool on the down payment first. Cash to close shrinks the base that the 60-month divisor works on.
- Treating DSCR as paperwork-free. It skips personal income documentation, but leases, appraisal rent data, and sourced assets are still required.
- Mixing paths. Qualifier and depletion figures never blend on one file.
Key Terms Defined
Asset depletion: A way to qualify by dividing usable assets by 60 months to create monthly income.
Haircut: The share of an asset’s balance a lender will not count, such as the 20% trimmed from securities.
Seasoning: How long funds have sat in an account, shown by dated statements.
Debt-to-income (DTI): Your monthly debts, including the new payment, compared with your qualifying income.
Imputed income: Income the lender assigns from your assets rather than a paycheck.
Rent schedule: An appraiser’s estimate of market rent for the property.
Frequently Asked Questions
Can I use asset depletion to refinance a Virginia rental I already own?
Sometimes. On the depletion path an investment property can be refinanced at up to 65% LTV on a rate-and-term refinance and 60% on a cash-out, subject to underwriting. Cash-out proceeds never count as qualifying assets. A strongly rented property usually does better on a DSCR refinance.
Do I have to sell my investments to qualify?
No. The lender counts the balances, after haircuts, and converts them into imputed income. You keep the portfolio, though cash needed to close leaves the pool.
Can I blend asset income with other income?
Yes. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived. The lender’s own calculation governs.
What if the rent does not cover the payment?
Through select lenders in the network, DSCR programs below 1.00 coverage are available, but LTV and terms adjust. Asset depletion ignores rent, so it is the other option, with the 65% investment-property purchase ceiling.
Can an LLC use asset depletion?
Not on these terms, because it is a consumer-purpose program. LLC borrowers typically use DSCR, subject to program terms.
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. If the property is a pure rental, Lendmire can also place a DSCR file, and the complete DSCR loans guide explains how those loans work.
Virginia’s rental buyers rarely lack assets, and the real question is whether the rent or the portfolio should carry the loan.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in Virginia page presents the program for Virginia borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Federal Register: Ability-to-Repay and Qualified Mortgage Standards
2. Consumer Financial Services Review: OCC Bulletin on Asset Dissipation
3. Compliance Alliance: Regulation Z and Investment Properties
4. 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 Is Calculated on a North Carolina Mortgage · Can You Get an Asset-Based Mortgage on a Leasehold Property? · Asset-Based Mortgage vs Family Loan for a Buyer With Assets and No Income
Guides: Asset-Based Mortgage in Virginia
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.