The Quick Read: Yes, but only on the asset depletion path, where select programs divide your usable assets by 60 months to create qualifying income that must carry the whole housing payment and your other debts, and a pure rental purchase often fits a DSCR loan better. DSCR, short for debt service coverage ratio, tests whether the property’s rent covers its own payment instead of testing you. Program figures do not change by state, and Indiana is one of the 16 states where Lendmire’s consumer mortgage lending is licensed.
- On the asset depletion path, an investment property is typically limited to 65% loan-to-value (LTV) on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting.
- The assets-only qualifier path covers principal residences and second homes, not rentals.
- Asset depletion generally requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when assets are your only income.
- A first-time investor on the depletion path typically needs a 700 credit score.
- If the rent can carry the payment, DSCR usually keeps your portfolio free to act as reserves.
What Does Asset Depletion Income Mean?
Asset depletion turns a pile of savings and investments into a monthly income number on paper. Nothing is sold, and nothing is frozen. The lender counts the eligible balance, applies a percentage to each asset type, divides the total by a set number of months, and treats the result as income.
Across the wholesale network Lendmire places files with, the divisor on the asset depletion path is 60 months. Lenders outside that network use other divisors. The divisor is the main lever in the whole calculation, which is why two lenders can look at the same portfolio and reach different answers.
The product exists for people whose balances are large and whose documented income is small. That means retirees, people who just sold a business, inheritance or settlement recipients, early-retired professionals, and households living off a portfolio. Their traditional personal-income documentation looks thin. Their statements do not.
Which Path Fits a Rental Purchase?
Only the asset depletion path reaches an investment property. The other route, the asset qualifier path, drives lender review on assets alone and documents no employment or income. On that route, eligible assets must equal or exceed the entire loan amount, loans go up to $4,000,000, and the property must be a principal residence or second home. A rental does not fit it.
A borrower is qualified on one path at a time, and the two never blend. Here is what each looks like for you:
- Asset qualifier path: assets cover the whole loan. Purchase leverage runs up to 80% and refinance leverage up to 75%, on a principal residence or second home only.
- Asset depletion path: assets become income, and that income runs through the debt-to-income (DTI) test. DTI compares your monthly debts to your monthly income. Investment property is allowed here, at 65% LTV on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Loan amounts run from $125,000 to $3,500,000. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Why do lenders disagree about rentals? Many asset-based programs are built around a home the borrower will live in. A number of lenders stop there. Some extend the depletion method to investment property, usually with lower leverage. That is why you will hear “yes” from one lender and “never” from another. Eligibility depends on the specific program, and every file is underwritten individually.
Credit matters too. The depletion path follows the lender’s score-and-loan-amount matrix, and a first-time investor typically needs a 700. Housing history is generally 0x30x12, meaning no late payments in the past twelve months, though one 30-day late can be considered case by case. Multiple bankruptcies are not eligible. A housing event such as a foreclosure needs four years of seasoning on this path.
How the Math Works on a Rental Purchase
The math has four steps: pool the assets, apply the percentages, divide by 60, and test the result against your debts. Here is the sanctioned shape, offered as an illustration only. The lender’s own calculation governs.
Picture a retired buyer with $1,500,000 in securities and $300,000 in cash, shopping for an Indiana duplex:
1. Securities count at 80%, which is $1,200,000. 2. Cash counts at 100%, which is $300,000. 3. Usable assets total $1,500,000. 4. Divided by 60 months, that is $25,000 of monthly qualifying income.
That $25,000 then has to carry the new housing payment and every other monthly debt through the DTI test. The rent from the duplex is not the engine here. Whether a lender gives any credit for projected rent depends on the program, so do not assume it offsets the payment.
Two practical points trip up buyers. First, the loan is capped at 65% LTV on an investment purchase, so expect to bring at least 35% down, subject to underwriting. Second, ask how the lender treats the down payment and closing costs. Many programs take that cash out of the pool before the divide, which shrinks the income figure. Cash-out proceeds never count as qualifying assets. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A $1,500,000 portfolio does not equal $1,500,000 of buying power. Haircuts, cash to close, and your other debts all shrink it.
Which Assets Count, and Which Don’t?
On the asset depletion path, the share of each balance that counts depends on the asset type. These are program ceilings, not offers.
| Asset type | Share of balance counted |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
A few categories are 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, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path. The documented route is converting them into a seasoned cash balance in a regulated account, with the source reviewed by the lender. Do not count on them at any percentage.
Statements matter as much as balances. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. That age requirement is called seasoning, the waiting period that shows funds are genuinely yours. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning. The assets are documented on both paths. Leaving out income documentation never means leaving out documentation.
Asset Depletion vs DSCR vs Bank Statement for an Indiana Rental
DSCR is the loan designed for rentals. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The bank statement program is for borrowers who document income with deposits. Each one tests something different.
| Factor | Asset depletion | DSCR | Bank statement |
|---|---|---|---|
| What it tests | Your assets as income | The property’s rent | Your deposits as income |
| Role of rent | Depends on program | The core test | Not the main test |
| Scaling | Uses your DTI each time | Judged per property | Uses your income each time |
| Best fit | Big portfolio, thin rent | Rent covers the payment | Business owner with deposits |
Think of it this way: asset depletion tests the person, and DSCR tests the house.
Scaling is where the gap widens. Each asset depletion purchase draws on the same portfolio and uses up more of your DTI. DSCR is judged property by property, and your balances can sit in the background as reserves instead of being spent as income. If you plan to buy more than one rental, that difference compounds.
For a deeper walk through DSCR, see Lendmire’s complete DSCR loans guide.
Which Path Fits You?
Work through these branches in order:
- Rent covers the payment with room to spare. Choose DSCR. It is built for that property, and your assets stay liquid.
- Rent falls short, but your portfolio is large. Asset depletion may work where DSCR struggles. Select lenders in the network also review DSCR files below 1.00 coverage, though leverage and terms adjust. Compare both before you decide.
- You have documented income that is not enough on its own. Asset-derived income can supplement it, up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
- Your assets are large but you want the loan covered outright. The qualifier path does this, but only for a home you will live in or use as a second home.
- The rental will be a short-term rental. Income logic changes again. Lendmire’s piece How an STR Investor Qualifies on Asset Depletion vs Rental Income walks through that choice. 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.
Business Purpose and Whether the Loan Is Really a Rental Loan
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. Federal consumer-credit rules exempt credit extended primarily for a business purpose, and America’s Credit Unions notes the exemption can reach loans to entities such as LLCs. Occupancy matters, though. Under the CFPB’s official interpretation, a property you expect to occupy for more than 14 days in the coming year is not treated as non-owner-occupied. That is why a vacation property you plan to use heavily may need a different structure. Whether a loan is business purpose is decided file by file.
The ownership question follows from this. Asset depletion qualifies you personally, so vesting the property in an LLC depends on the program. Subject to program terms, DSCR loans are generally friendlier to entity ownership. If your plan is to hold Indiana rentals in an LLC, raise that early.
Risks Investors Underestimate
Depletion uses your balance sheet twice. The same portfolio supplies the down payment, the closing cash, and the qualifying income. A lender cannot count what you have already spent, and you cannot spend what you have pledged to qualify.
Markets also move. A securities balance that clears the minimum-assets test on a Monday can fall short after a bad month. Retirement balances count at only 70% on this path, and accessing them may carry tax and penalty consequences. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Here is a pattern that shows up across files like this. Investors with large portfolios arrive expecting the whole balance to count, then discover the haircuts, the cash to close, and their existing debts shrink the number a lot. The files that go smoothly start with a statement review before a property is chosen. Retired buyers often have the strongest balances and the least paperwork ready.
What to Gather Before You Shop
- Statements for every qualifying account, aged to meet the 120-day plus 45-day rule on the depletion path.
- Documentation of any sale-of-business, inheritance, or settlement funds.
- Proof of ownership for joint accounts.
- A list of existing debts, since DTI applies.
- A conversion plan for any crypto or other non-eligible holdings.
- Credit history, including any housing events.
Key Terms Defined
Asset depletion path: the route where eligible assets are converted into monthly qualifying income that runs through the DTI test.
Asset qualifier path: the route where eligible assets must equal or exceed the whole loan, with no employment or income documented.
Usable assets: the balance left after each asset type’s percentage is applied.
Vesting: the legal name the property is titled in, such as an individual or an LLC.
Business-purpose loan: a loan made primarily to acquire or hold property for investment instead of for personal use.
Reserves: liquid funds held back after closing to cover the payment if rent or income dips.
Frequently Asked Questions
Can retirement accounts count toward an Indiana rental purchase?
Yes, on the asset depletion path, retirement accounts count at 70% at any age, subject to underwriting. That is lower than cash at 100%. On the assets-only qualifier path, retirement balances are credited differently, but that path does not cover rentals.
Do I need traditional personal-income documentation or W-2s?
Not for the asset-derived income itself. The loan is reviewed on documented assets under the applicable program, subject to lender guidelines. The assets are fully documented, and credit and the property still get reviewed.
Does the rent from the property count toward qualifying?
It depends on the program. The depletion test is built around your derived income and your debts. Do not assume projected rent offsets the payment until the lender confirms how it treats rent.
Can cryptocurrency count as an eligible asset?
Not directly. Crypto is not published as eligible on either path. The documented route is converting it to cash in a regulated account and letting that balance season, with the source reviewed by the lender.
Is Indiana treated differently from other states?
Not on program figures. Leverage, haircuts, and seasoning stay the same, and Indiana is among the 16 states where Lendmire’s consumer mortgage lending is licensed. Local facts like taxes and insurance affect the deal, but they are not program parameters.
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 is a mortgage broker that arranges these loans through select lenders in its wholesale network. Final eligibility is set by the lender. This is not a commitment to lend.
An Indiana rental that rents well will usually be financed on its own income, and the buyers who need asset depletion are the ones whose portfolio is stronger than the property’s rent.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. eCFR 12 CFR 1026.3, Exempt Transactions
2. America’s Credit Unions, Regulations and Business Loans
3. CFPB Official Interpretation, Section 1026.3
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 Indiana
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.