The Quick Read: It depends, but on the asset depletion path the ceiling is typically 60% of the appraised value on a cash-out refinance, and your cash is that amount minus your payoff and costs. Your asset-derived income must also carry the new, larger payment. The lower of those two limits sets your number. The program figures are the same in Michigan as anywhere else, and every file is underwritten individually.
- No fixed dollar cap exists. Your cash comes from a leverage ceiling, not a set amount.
- Cash-out leverage is lower than purchase leverage. Through select programs, the asset depletion path runs up to 80% on a purchase or rate-and-term refinance but 60% on a cash-out refinance of a primary residence or second home.
- Investment property is tighter still. On the same path, it runs up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
- Cash-out proceeds never count as qualifying assets. You cannot borrow against the home and then use that cash to qualify.
- Programs change. The figures here are ceilings, not offers, and are subject to underwriting.
Which Path Fits a Michigan Homeowner Living on Assets?
The asset-based mortgage has two paths, and you qualify on one at a time. Think of it as asking whether your assets cover the loan outright or turn into income.
On the asset qualifier path, eligible assets must equal or exceed the entire loan amount. No employment or income is documented. On a refinance, leverage goes up to 75% of the home’s value for a principal residence or second home. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and not published. Do not assume the 75% figure means cash-out is available.
On the asset depletion path, your usable assets become monthly qualifying income. The lender divides them by 60 months. That income must carry the full housing payment and your other debts through the debt-to-income test. This is the path that publishes a cash-out ceiling, so it is the one this article focuses on.
This is not a loan product. It is a way of qualifying, and your assets stay yours. Qualifying on assets does not mean no documentation either. Your statements are reviewed closely. What you skip is traditional personal-income documentation, pay stubs and employment verification.
The reader this fits is cash-heavy and income-light: retirees, people who sold a business, inheritance or settlement recipients, early-retired professionals, and households living off a portfolio.
How Is the Maximum Cash Calculated?
Your cash is the leverage ceiling times the appraised value, minus everything already owed on the home, minus closing costs. That is the whole formula. Then a second test checks whether your qualifying income can carry the new payment.
Here is the sequence.
1. The appraisal sets the value. A lower appraisal shrinks everything below it.
2. The program applies its cash-out ceiling. On the asset depletion path, that is typically 60% of value on a primary residence, a second home, or an investment property, subject to underwriting.
3. Every lien is paid off first. That includes your first mortgage, and any second mortgage or home equity line.
4. Closing costs come out of the balance. They reduce what reaches you.
5. The income test runs on the new loan. The new, larger payment goes through the debt-to-income test against your asset-derived income.
Percentages make the arithmetic easy to see. A home appraises at 100% of its value. The ceiling takes 60% of that. Whatever share of value you still owe comes off the top.
| You owe (share of value) | Room under the 60% ceiling | What it means |
|---|---|---|
| 30% | 30% of value, before costs | Strong cash-out room |
| 45% | 15% of value, before costs | Moderate room |
| 55% | 5% of value, before costs | Thin, and costs eat much of it |
| 60% or more | None | No cash-out on this path |
That table is illustrative. The lender’s own calculation governs.
Many Michigan owners have owned for years and paid down a lot of principal. Those homeowners can sit in the top rows. Someone who bought recently with a small down payment often cannot.
Which Limit Binds First?
Most borrowers hit the leverage ceiling first. Asset-rich borrowers usually have plenty of qualifying income on paper. Three limits can stop you, though, and it helps to know which one you are up against.
| Limit | What it controls | Typical sign it binds |
|---|---|---|
| Leverage ceiling | Total new loan against value | High existing balance |
| Loan-size range | $125,000 to $3,500,000 on this path | Very small or very large loans |
| Asset-derived income | Whether the payment fits the DTI test | Modest assets, large new loan |
The leverage ceiling is the usual wall. Loan size matters at the edges. The income test bites when the asset pool is only slightly above the minimums.
The asset floor is separate. On this path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never drop below $250,000 in liquid assets when asset depletion is your only income source. Because the loan balance rises with cash-out, that 1.25x test can tighten as you borrow more. For smaller loans the 1.25x figure is the lesser. Larger loans top out at the $1,000,000 figure.
If asset depletion only supplements documented income, such as a pension or Social Security, it can lift your income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
What Assets Count, and How Much of Each?
Only a share of each balance counts, and the share depends on the asset type. On the asset depletion path, lenders in the network apply these percentages.
| Asset type | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
Some assets are not eligible on this path at all: 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.
The same goes for cryptocurrency, precious metals, collectibles, and borrowed or pledged funds. They are not published as eligible. The documented route is converting them to a seasoned cash balance in a regulated account. The lender then reviews where the money came from.
Here is a worked example. Say you hold $1,500,000 in securities, which count at 80% for $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 of usable assets. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts.
One trap catches people. Assets used to create income generally cannot also cover reserves or cash to close. Count each dollar once.
Does the Cash You Take Out Count as an Asset?
No. Cash-out proceeds never count as qualifying assets on the asset depletion path. This is the loophole people hope for, and it is closed.
You cannot refinance, park the cash in a savings account, and use it to qualify for that same refinance. Qualifying assets are what you already have, documented and seasoned. If you hope to use the proceeds as reserves, the loan’s own cash cannot be what qualifies you.
Seasoning is the required age of your funds. On this path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning. That helps a recent seller or heir whose cash just landed. On the qualifier path, the rule is 60 days of seasoning and two months of statements per account.
Three Michigan Scenarios
These are modeled, not offers.
The long-held home. A retiree has owned a primary residence for decades and owes under a third of its value. The 60% ceiling leaves meaningful room. Asset-derived income is the next question. If the portfolio is large enough to clear the asset floor and carry the payment, cash-out can work. The practical risk is appraisal, since a lower value narrows the gap.
The recent purchase. A business seller bought a second home a few years ago with a modest down payment and owes more than half its value. The 60% ceiling leaves almost nothing after closing costs. Cash-out is possible on paper but rarely worth it. A better path may be a rate-and-term refinance at 80% on a primary residence or second home, which takes no cash out but may restructure the loan.
The investment property. A household owns a rental and wants the equity. Cash-out on this path caps at 60% on investment property. The borrower must also meet the other tests, including a 700 credit score if this is their first investment property. Many owners with rentals do better looking at a rental-focused refinance. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Common Mistakes
- Treating a big portfolio as a big check. Assets raise your qualifying income. They do not raise the leverage ceiling.
- Counting retirement money at face value. On this path, retirement balances count at 70% at any age.
- Forgetting the second lien. Every lien is paid off before you see a dollar.
- Using one pool of assets twice. The same dollars cannot be income, reserves, and cash to close.
- Assuming the qualifier path allows cash-out at 75%. That figure is a refinance ceiling on that path. It says nothing about cash-out.
- Ignoring seasoning. Fresh transfers into an account need to be sourced and aged, or the lender may exclude them. Every figure here varies by lender and program: guidelines, property type, leverage, and credit profile all apply.
Documents to Gather
Pull these together before you apply.
- Statements for every account you plan to count, covering the seasoning window above
- Your current mortgage payoff statement, plus any second lien or line of credit
- Proof of source for any large recent deposits
- Your credit profile, with 0x30x12 housing history the standard, and a single 30-day late in twelve months reviewed case by case
- Property details for the appraisal
A housing event such as a foreclosure needs 4 years of seasoning on the depletion path. Multiple bankruptcies are not eligible. Credit on this path follows the lender’s matrix, not one universal score.
Where the Lending Rules Fit
An owner-occupied home is a consumer mortgage. That means the lender must consider and verify the income or assets it relies on, plus your debts, as the CFPB’s ability-to-repay compliance guide explains. The lender makes that determination under a reasonable, good-faith standard at or before closing, per Regulation Z section 1026.43. This is why assets alone do not skip underwriting. Your credit, property, leverage, and debts are all still reviewed.
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 ABA’s Business Law Today overview notes that the ability-to-repay section does not apply to commercial or business loans, even when a personal dwelling secures them. Do not assume that applies to you, though. Which category your loan falls into depends on its purpose.
Tax treatment varies; consult a qualified professional.
What If Cash-Out Isn’t Available?
You have options, and the right one depends on why you wanted the cash.
- A rate-and-term refinance on the asset depletion path runs up to 80% on a primary residence or second home. It pays out no cash but can change your loan.
- A purchase with asset-based qualification is an option if the cash was meant for another property.
- A rental-focused cash-out fits if the equity is in an investment property. Those loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
- A larger equity pull may fit another structure entirely.
Agency programs have their own rules and do not govern this one.
Key Terms Defined
Asset depletion: a way of qualifying where usable assets, after percentage credits, are divided by 60 months to produce monthly qualifying income.
Asset qualifier: a path where eligible assets must cover the whole loan amount, and no income is documented.
Cash-out refinance: a new, larger loan that pays off the old one and pays you the difference.
Loan-to-value (LTV): the loan amount as a percentage of the home’s appraised value.
Haircut: the discount applied to an asset, so only part of its balance counts.
Seasoning: how long funds must sit in your account before the lender will count them.
Debt-to-income (DTI): your monthly debts, including the new payment, compared to your monthly income.
Frequently Asked Questions
How much cash can a Michigan homeowner take out on an asset depletion refinance?
There is no fixed dollar amount. On the asset depletion path, the ceiling is typically 60% of the appraised value on a cash-out refinance, minus your existing liens and costs. Your asset-derived income must also carry the new payment. Terms are subject to underwriting.
Does Michigan have its own cash-out cap for this program?
The program figures here do not change by state. Property taxes, insurance, and local home values affect your numbers, but they are context, not program parameters. Each file is underwritten individually.
Can I use retirement accounts to qualify?
Yes, with limits. On the asset depletion path, retirement balances count at 70% at any age. On the asset qualifier path, they count at 90% under age 59½ and 100% at 59½ or older. You are not required to withdraw the money, and the assets stay in your name.
Do I need employment income?
Not on either path. The asset qualifier path documents no income. The asset depletion path converts assets into qualifying income. Either way, your assets are documented, and credit, property, and leverage are still reviewed.
Can I take cash out on a rental property this way?
Only on the asset depletion path, where an investment property is capped at 60% on a cash-out. Many owners find a rental-focused loan, which is reviewed on the property’s rent covering the payment, a more natural fit.
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. Lendmire is a broker that arranges these loans for Michigan borrowers through select lenders, and its consumer mortgage licensing covers 16 states, Michigan among them. Programs change, and nothing here is a commitment to lend.
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. CFPB Ability-to-Repay and Qualified Mortgage Compliance Guide
2. CFPB Regulation Z, Section 1026.43
3. ABA Business Law Today: Overview of the Ability-to-Repay and Qualified Mortgage Rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Buy a Michigan Rental Property on Asset Depletion Income? · How to Refinance a Michigan Mortgage After Retiring With No W-2 Income · Can You Buy a California Rental Property on Asset Depletion Income?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.