How Much Can a Retiree Borrow on a Jumbo Loan Using Asset Depletion?

The Quick Read: It depends on your asset pool: what remains after haircuts, cash to close and reserves is divided by a lender divisor to create monthly income, and that income must then pass a debt-to-income test and fit the program’s loan-size and leverage caps, so the ceiling is a formula, not one national number. Retirees with large portfolios and little paycheck income are the borrowers this method was built for. Every file is underwritten individually, subject to lender guidelines.

• Loan amounts in the program range run from $125,000 to $3,500,000.
• The asset-depletion alternative on a primary residence typically reaches up to 80% LTV.
• Reserves commonly run around six months of the housing payment.
• A shorter divisor produces more income, and a longer divisor or a bigger haircut produces less.

What Asset Depletion Means for a Retiree

Asset depletion is a way to qualify, not a separate loan product. The lender takes your documented liquid assets and converts them into a monthly income figure on paper. You do not sell anything, and the accounts are not pledged as collateral. They stay where they are and keep working for you.

This matters because a retiree’s tax return often understates real wealth. A couple with a large brokerage and retirement balance may show modest taxable income. Full-documentation underwriting reads that return and sees a small paycheck. Asset depletion reads the statements and sees the balance sheet.

Some retirees think about raising their IRA distributions for a year to look better on paper. That move can drain the plan the money was meant to fund. Asset depletion avoids it. The file is reviewed on documented income under the applicable program, subject to lender guidelines.

From Portfolio to Maximum Loan: The Six Steps

No lender can give you a true maximum without running your numbers. The sequence below shows what happens inside the file, and it is the same chain across most programs in Lendmire’s wholesale network.

1. Inventory eligible accounts. Checking, savings, money market, brokerage and vested retirement accounts generally count. Equity in other real estate, unsold business stakes, personal property and unvested stock generally do not. Crypto is usually excluded as well, though treatment varies by lender.

2. Apply haircuts. Cash counts at full value. Securities count for less. Retirement accounts usually count for less still, and many programs discount them more steeply when the owner is under 59½.

3. Subtract money committed to the deal. The down payment, closing costs and required reserves come out before any division happens. This is the step borrowers skip when they run a calculator on their own. Assets used to create income generally cannot also serve as the down payment or reserves.

4. Divide by the divisor. The remaining pool is divided by a number of months. Select programs typically use 36, 60 or 84. The shorter 36-month divisor fits files where asset income only supplements other income and the debt ratio is low. The 60-month divisor fits supplemental files with higher ratios. The 84-month divisor fits files where the asset math carries the whole application.

5. Run the debt-to-income test. The imputed income goes into a standard ratio with the new housing obligation and your other debts. Documented pension, Social Security and required minimum distribution income can be added on top. The debt cap varies by program, credit and loan size.

6. Back into the loan size. The ratio sets a maximum monthly housing obligation. Subtract taxes, insurance and any HOA dues, and what remains supports a loan amount. Then the program’s LTV and loan-size caps are applied. The lowest of those limits wins.

Why the Divisor Moves the Answer the Most

Pool, haircuts and cash to close are fixed by your accounts. The divisor is the one lever that changes with your overall file. Take the same pool and divide it over 84 months, then over 36. The 36-month result is about 2.3 times the monthly income. Over 60 months it is about 1.4 times.

A retiree with a pension and Social Security often lands in a shorter-divisor tier. A retiree living off the portfolio alone usually lands in the longest. Divisors are set by each lender’s matrix, so the same retiree can see different results from two lenders. That is why a broker who sees many matrices can compare them side by side.

What Makes a Loan Jumbo

A loan is jumbo when it exceeds the conforming limit for the county. The Federal Housing Finance Agency announcement of the latest conforming loan limits set the one-unit baseline at $832,750, up $26,250 from the prior level. The ceiling in high-cost areas is $1,249,125 for one-unit properties. Alaska, Hawaii, Guam and the U.S. Virgin Islands carry a baseline of $1,249,125 and a ceiling of $1,873,675.

HousingWire reports that new limits are announced each November. Limits change, so check the agency’s site for the current figure in your county before you plan around a number.

The limit applies to the loan amount, not the price. A retiree putting 30% down on a $1.2 million home may borrow less than the limit in a high-cost county. The same home in a baseline county can still be jumbo. Past the county limit, agency eligibility ends, and non-QM programs become the practical route for many retirees buying at higher price points. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.

Which Assets Count, and How

Lenders discount retirement balances because withdrawals can carry penalties and costs. That is an underwriting rationale, not a federal rule. Exact percentages differ by program and age, so ask for the matrix before you assume a number.

Which Limit Binds First?

Retirees often assume income is the only ceiling. It is only one of several, and the lowest one controls the loan.

• Income limit. The pool divided by the divisor, run through the debt ratio.
• Leverage limit. The asset-depletion alternative on a primary residence typically reaches up to 80% LTV, subject to lender guidelines. Second homes and rentals carry different leverage that varies by lender.
• Loan-size limit. The program range tops out at $3,500,000.
• Credit and reserves. A weaker credit profile can lower leverage. Reserves around six months of the housing payment must sit outside the pool used for income.

For a modest jumbo loan, the income limit usually binds first. For a very large purchase, the loan-size cap or the leverage cap can bind before income does. Ask the loan officer which limit your file hits first. That answer tells you whether more assets, a larger down payment or a different program will actually help.

The Down Payment Trade-Off (Where Retirees Get Caught)

Cash does two jobs. It is the down payment, and it is part of the pool that creates income. Every dollar you move into the down payment leaves the pool before the divisor runs.

Picture a retiree who puts a very large share down to keep the loan small. The loan shrinks, but so does the income the lender counts. The debt-to-income test can get harder to pass even though the loan is smaller. A moderate down payment with a stronger remaining pool can work better than an all-in down payment.

The balance is different for every file.

Asset Depletion or DSCR for a Retiree Buying a Rental?

A retiree buying a rental has two different paths, and they test different things. Asset depletion tests the borrower’s balance sheet and still runs a debt ratio. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, with no personal debt-to-income test. Lendmire’s complete DSCR loans guide covers that second path in full.

Occupancy decides the disclosure regime. An owner-occupied file is a consumer mortgage with consumer disclosures. A loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from those consumer disclosure rules. Do not mix the two when planning a file.

If the rent does not cover the payment, DSCR is not automatically closed. Programs below 1.00 coverage are available through select lenders in the network, but LTV and terms adjust. Leverage for investment purchases on documented-income programs also varies by lender.

Qualifying Is Not the Same as Affording

The formula tells you what a lender will approve. It does not tell you what your retirement can carry. Those are separate questions, and a careful retiree answers both.

Run your own stress test before you apply. Assume the portfolio drops meaningfully in a bad year. Check whether the housing obligation, taxes, insurance and upkeep still fit your spending plan. Think about how long the money has to last.

The pool you count today can be smaller at renewal or in a refinance. Ask what happens if you want to change course later. Lendmire’s article Jumbo Cash-Out and Stay vs Sell for a Retiree Using Asset Depletion takes up that question.

Keeping appreciated assets invested instead of selling them is one reason retirees choose this route. 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.

Documents to Gather Before You Apply

Clean statements save the most time on these files. Gather:

• Statements for every account counted, covering the period the program requires.
• Proof of account ownership, and trust documents if accounts are titled in a trust.
• A source for any large recent deposit, since lenders season funds.
• Documentation of any pension, Social Security or required distribution income you want counted.
• Credit information, plus the usual appraisal, title and insurance items.
• A clear list of debts, since they feed the ratio.

Why a File With Big Assets Still Gets Declined

Large balances do not guarantee approval. Four problems account for most trouble.

• Assets counted before cash to close. The borrower’s math ignored the down payment and reserves.
• Double-counted money. The same dollars were used for income, down payment and reserves.
• Unseasoned or unexplained funds. A big transfer with no paper trail raises questions.
• A debt ratio that fails. Large existing debts can offset income that looked ample.

The legitimacy of asset-based qualification rests on a basic rule. The CFPB’s ability-to-repay compliance guide requires a good-faith determination that the borrower can repay, and the lender may consider income or assets. That is why the lender documents the assets, and why the file is not a no-questions loan.

Key Terms Defined

Asset depletion: A qualification method that turns documented liquid assets into monthly income on paper.

Divisor: The number of months the usable asset pool is divided by to create monthly income.

Haircut: A discount applied to an account’s balance because it is less liquid or carries restrictions.

Jumbo loan: A mortgage larger than the conforming limit set for the county.

Debt-to-income ratio: Your monthly debt obligations, including the new housing cost, divided by your monthly income.

Seasoning: The minimum time funds must have been in your account before a lender counts them.

Next Step

If you are retired or close to it and want to see how your portfolio translates into borrowing power, Lendmire can help you compare asset-depletion options based on your accounts, the property, credit profile, leverage and your goals. Lendmire is a mortgage broker that arranges these loans through select lenders in its wholesale network, and its consumer mortgage licensing covers 16 states. Program details are subject to lender guidelines, and nothing here is a commitment to lend.

A retiree who knows which of the four limits binds first can decide with a clear head whether to add assets, put less down or look at a different path.

For current guidelines and terms, see Lendmire’s self-employed mortgage programs page.

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.

References

1. FHFA conforming loan limit announcement

2. HousingWire on conforming loan limits

3. CFPB Ability-to-Repay/Qualified Mortgage Small Entity Compliance Guide