The Quick Read: Yes, it can work, because asset-based programs do not set a six-month reserve count the way many rental loans do, but the approval turns on how large your eligible assets are compared with the loan, and six months of housing payments alone will rarely clear that test.
- On the asset qualifier path, the program publishes no reserve requirement at or below 75% loan-to-value on a refinance. Above that, the lender sets reserves.
- On the asset depletion path, no reserve months are published. The gate is total usable assets.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- A cash-out on the depletion path is capped at 60% loan-to-value, on a principal residence, a second home or an investment property.
- Everything here is subject to underwriting, and every file is reviewed individually. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Why “Six Months of Reserves” Is the Wrong Yardstick Here
Reserves are a rental-loan idea. Many investor programs ask for a set number of months of the property payment sitting in the bank after closing. That count is the main liquidity test on those files.
An asset-based mortgage tests liquidity in a different way. Your assets are not a cushion behind the loan. They are the basis for the loan. Across the wholesale network Lendmire works with, the asset-based files that go smoothly are the ones where the borrower’s balances are large and their paper income is small. Think of a retiree, a business seller or a household living off a portfolio.
So the better question is how much usable asset value you have compared with the loan. If your whole liquid position is about six months of payments, an asset-based program is probably the wrong fit. The flip point is simple. If your balances are far larger than six months of payments, reserves stop being the issue and the asset tests take over.
Lendmire arranges these loans as a broker through select lenders. It does not fund them. The asset-based mortgage programs cover principal residences and second homes in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Investment property is eligible only on the depletion path.
Which Path Are You On?
A borrower is reviewed on one path at a time. Never blend the two tables.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Cover the whole loan | Convert to monthly income |
| Income documented | None | Derived from assets |
| Refinance leverage | Up to 75% | Cash-out 60% |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Published reserves | None at or below 75% | None published |
On the qualifier path, your eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. The lender’s ability-to-repay review rests on the assets.
On the depletion path, usable assets are divided by 60 months. The result is a monthly qualifying income that must carry the housing payment and other debts through the debt-to-income test.
Does a Cash-Out Work on Each Path?
On the asset qualifier path, whether cash-out proceeds are allowed, and at what leverage, is set by the lender and is not published. Refinance leverage there reaches 75% loan-to-value. That figure is a ceiling for refinances in general, not a promise of cash-out terms. Ask before you assume.
On the asset depletion path, the answer is clear. Cash-out refinances on a principal residence or second home go up to 60% loan-to-value. An investment property is capped at 60% as well. Because this is where investment property is eligible, the loan is business-purpose there. The cash you receive is yours to use, but it never counts toward your qualifying assets.
That last rule is the one that surprises people. Some rental programs let the cash-out proceeds satisfy the reserve requirement. The asset-based depletion path does not let proceeds count at all. Plan to qualify on the assets you hold before closing. Count the cash you pull out as new liquidity, not as part of the file. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
What the Assets Must Look Like
Eligible assets are credited at different percentages depending on the path.
Asset qualifier path (share of balance that counts):
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Asset depletion path (share of balance that counts):
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Here is how the qualifier math can look, as an illustration only, since the lender’s own calculation governs. Take an $800,000 loan. Say the borrower holds $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) under 59½ (90% counts, so $270,000) and $200,000 in savings (100%, so $200,000). That is $800,000 of usable assets against an $800,000 loan, so the file is reviewed on assets alone, subject to underwriting.
A depletion example works differently. Take $1,500,000 in securities, where 80% counts for $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 of usable assets. Divided by 60 months, that gives $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
Notice what is missing from both examples. Neither asks for months of payments set aside. Both ask whether your balances are large enough.
The Depletion Path Has Its Own Floor
Reserves are not published on the depletion path, but minimum assets are. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you need at least $250,000 liquid, never less.
If you also have documented income, the picture changes. Asset-derived income may supplement it up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived.
This is the practical reason six months of reserves is not the right test. A borrower with modest liquidity can be well above a six-month reserve count and still fall short of these minimums.
What Does Not Count
Several asset types fall outside both tables.
Privately held company stock is not an eligible asset on either path. That includes closely held shares in a company you founded. The documented route for a founder or shareholder is liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their credit percentages.
On the depletion 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 are also not eligible.
Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Seasoning and Statements
“Six months” often means two different things. One is how long you have held your funds or the property. The other is how many months of payments you hold in reserve. Here is how each applies to this program.
On the qualifier path, assets need 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, 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.
The assets are fully documented on both paths. “No income documentation” never means no documentation. The program asks for no traditional personal-income documentation, pay stubs or employment verification, and every file is fully underwritten.
Credit and Housing History
The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700.
Housing history is 0x30x12. 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 on the depletion path. Approval is never promised, and credit is always reviewed.
When a Rental Loan Is the Better Fit
An asset-based mortgage is built for a cash-heavy, income-light borrower. If you hold a rental that produces strong rent against its payment but your liquid balances are modest, the asset path is not your lane. A property-income loan is. Lendmire’s piece DSCR Cash-Out Refinance Requirements With Only Six Months of Reserves covers that route, where reserve months and rent coverage are the main tests.
The decision comes down to what your file does best. If you have large assets and little provable income, the asset-based route fits. If you have a rental that cash-flows but thin liquidity, the property-income route usually fits better. It is also possible you fit neither today and need to build liquidity first.
Business-purpose loans are treated differently from standard owner-occupied mortgages. Federal rules on ability-to-repay and qualified mortgage standards treat business-purpose credit as outside the consumer framework. Compliance Alliance notes the test looks at the loan’s purpose, not the property type. That is why investment property sits only on the depletion path, as a business-purpose loan.
If You Are Short on Assets
A shortfall does not always end the conversation. Here are the levers a broker would look at first.
1. Lower the loan amount. On the qualifier path, assets must cover the whole loan, so a smaller loan changes the math directly.
2. Convert ineligible holdings. A sale of private stock, cryptocurrency or collectibles into a seasoned cash balance can turn dead weight into counted assets.
3. Age your funds. Statement seasoning is a calendar issue. Plan around the 60-day and 120-day windows.
4. Reconsider the path. If the qualifier path falls short, the depletion path measures assets differently, though cash-out leverage is lower at 60%.
5. Add documented income. On the depletion path, asset income can supplement documented income, and the minimum-assets rule is waived when it does.
Key Terms Defined
Reserves: Liquid assets left over after closing, usually counted in months of the housing payment.
Asset qualifier path: A route where eligible assets must equal or exceed the whole loan, with no income documented.
Asset depletion path: A route where usable assets are divided by 60 months to produce a qualifying monthly income.
Seasoning: The time funds have sat in an account before they count toward qualifying.
Loan-to-value: The loan amount as a percentage of the property’s appraised value.
Frequently Asked Questions
Do cash-out proceeds count as my reserves on an asset-based loan?
No, not on the depletion path. Cash-out proceeds never count as qualifying assets there. On the qualifier path, cash-out treatment is lender-set and not published, so confirm it before you plan around it.
Is there a minimum number of reserve months?
None is published on the depletion path. On the qualifier path, none is required at or below 75% loan-to-value, and above that the lender sets them. Depletion files carry minimum-asset rules instead, which are usually the tighter test.
Can I use an investment property for a cash-out?
Yes, through select programs on the depletion path only. Cash-out on an investment property goes up to 60% loan-to-value, and the loan is business-purpose. The qualifier path covers principal residences and second homes.
Does my retirement account count?
Yes, at a haircut. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
What if most of my wealth is in my own company’s stock?
The route is documented liquid assets, such as seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages.
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. Qualification is subject to lender guidelines and credit approval, and none of this is a commitment to lend.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Federal Register – CFPB Ability-to-Repay/QM Final Rule
2. 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: Best Asset-Based Cash-Out Refinance Program for a Retiree Living on Investments · Asset-Based Cash-Out Refinance Requirements With No Income Verification · Asset-Based Cash-Out Refinance Requirements With No Income Other Than Assets
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- 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.