The Quick Read: Yes, but only on the asset depletion path, subject to underwriting: through select programs, a principal residence or second home can go up to 60% loan-to-value on a cash-out refinance, qualified by usable assets divided by 60 months, and the cash you pull out never counts toward those assets.
- Two paths exist, and you use one at a time. The asset qualifier path covers the whole loan with assets. The asset depletion path turns assets into monthly income.
- Cash-out has a published ceiling only on the depletion path. That is 60% loan-to-value on a principal residence, second home or investment property.
- Your assets are counted, not sold. They stay where they are, but they must be documented and seasoned.
- Plan on the post-closing balance. Down payment, closing costs and cash-out proceeds don’t double as qualifying assets.
- A rental that pays for itself may fit DSCR better. DSCR is the investor loan that is reviewed on the property’s rent.
Lendmire is a broker. It arranges these loans through select lenders in its wholesale network, and its consumer mortgage lending is licensed in 16 states, North Carolina included. The lender underwrites every file, and the figures below are ceilings and floors, not offers.
Which Path Lets You Take Cash Out?
Only the asset depletion path has a published cash-out limit. On the asset qualifier path, the lender decides whether cash-out is allowed and at what leverage, and that figure isn’t published. Don’t plan around a number nobody has printed.
Here is how the two paths differ.
The asset qualifier path says: your eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Loans go up to $4,000,000. On a refinance, leverage tops out at 75% loan-to-value on a principal residence or second home, but that figure is for a standard refinance, not a cash-out.
The asset depletion path says: your usable assets, after haircuts, are divided by 60 months. The result is monthly qualifying income. That income has to carry the full housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000. This is the path with a stated cash-out limit.
You’re qualified on one path at a time. You can’t blend the two tables to make a file work.
How the Depletion Math Works on a Cash-Out
The lender counts a share of each asset, adds them up, and divides by 60. That’s the whole idea. The haircut is the share of a balance the lender refuses to count, because a stock balance can drop and a retirement account carries early-withdrawal friction.
On the depletion path, these shares apply, subject to underwriting:
- Cash accounts and certificates of deposit: 100%
- Securities: 80%
- Private stock: 75%
- Retirement accounts: 70% at any age
- Real-estate equity: 60%
Some assets don’t count at all 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.
Run an illustrative case. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100% counts). That’s $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 new housing payment and your other debts through the debt-to-income test. The lender’s own calculation governs, so treat this as a shape, not a quote.
The OCC describes this same idea in its bulletin on asset depletion underwriting. It calls it using an applicant’s assets to calculate a hypothetical cash annuity stream, added to other income when judging ability to pay. The bulletin is addressed to banks, so read it as context for how regulators view the method. It isn’t a rule that sets this program’s terms.
There is also a floor on the pool. The depletion path wants 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, it never goes below $250,000 in liquid assets. If you also have documented income, asset-derived income can supplement it up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Cash-Out Leverage Limits on the Depletion Path
Cash-out gets less leverage than a purchase or rate-and-term refinance. A rate-and-term refinance changes your loan terms without pulling cash out. These are the depletion-path ceilings, through select programs:
| Occupancy | Purchase or rate-and-term | Cash-out |
|---|---|---|
| Principal residence | Up to 80% | Up to 60% |
| Second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
Notice that the cash-out column is the same for all three. A 60% ceiling means the new loan can’t exceed 60% of the appraised value. That includes whatever you owe on the old loan.
Think about what that means for a home with a large existing mortgage. If your current balance already sits near 60% of value, there may be little or no cash left to take. If the home is paid off, the full 60% is room to work with. Most programs treat cash taken against a mortgage-free home as cash-out, so the cash-out cap applies. The lender confirms how your file is classified.
Appraisal comes first in this math. A lower appraisal shrinks the dollar amount you can take, even when your assets are strong.
Why the Answer Differs by Loan Type
The question “can I cash out?” gets different answers because there are different loan types behind it. Here is the side-by-side.
| Loan type | Reviewed on | Cash-out | Best for |
|---|---|---|---|
| Asset qualifier | Assets cover the whole loan | Lender-set, not published | Large balances, no income |
| Asset depletion | Assets divided by 60 months | Yes, up to 60% LTV | Asset-rich, income-light |
| DSCR | Rent covering the payment | Yes, investment property | Self-funding rentals |
| Bank statement | Deposits as income | Program-specific | Self-employed with deposits |
| Home equity line | Your income and credit | Borrow against equity | Smaller, flexible draws |
Agency programs (Fannie Mae and Freddie Mac) have their own asset-income formulas and their own cash-out limits. Those are separate rules. They don’t govern this program, and the figures here shouldn’t be read against them.
A North Carolina Borrower, Walked Through
Picture a retired couple in Asheville. Their house is paid off. Their documented income is mostly Social Security, but their brokerage and savings balances are large.
They want cash for a renovation and to help a family member. They’d like to keep their portfolio invested.
Step one is the path. If their assets could cover the entire new loan, the asset qualifier path is the first look. Cash-out proceeds are the open question there, since the lender sets that rule. If the loan is bigger than the assets, or they want a published cash-out figure, the depletion path fits.
Step two is the pool. Using the same shapes as above, securities count at 80% and cash at 100%. Retirement accounts, if they hold any, count at 70%. The total divided by 60 becomes their qualifying income. That income carries the new payment and any other debts through debt-to-income.
Step three is the cash-out cap. On a principal residence, the loan can reach up to 60% of the appraised value. That’s the ceiling, not a promise. The appraisal decides.
Step four is the part people miss. The cash they pull out doesn’t count as a qualifying asset. And the money they use for closing costs can’t also sit in the pool. They should model the balance that remains after closing, not the balance on today’s statement.
Last, credit. On the depletion path, the lender’s own score and loan-amount matrix applies. Housing history is reviewed at 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
This is a consumer mortgage on their own home, so standard consumer-mortgage rules and disclosures apply to it.
What the Lender Checks
Underwriters look at the same short list on nearly every file:
- Size of the post-closing asset pool. This is what drives the income number.
- The haircuts. Cash helps. Securities and retirement balances shrink on the way in.
- The cash-out cap. The appraisal and your current balance decide the room.
- Credit. The qualifier path publishes a 600 minimum. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700.
- Seasoning. This is the waiting period an asset must sit in your accounts before it counts.
- Occupancy and purpose. Home, second home or rental changes the leverage and sometimes the loan type.
Seasoning looks different on each path. On the qualifier path, assets need 60 days of seasoning and two months of statements per qualifying account. On the depletion 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.
Reserves are lighter than most people expect, but they aren’t free. On the qualifier path, none are required at or below 75% loan-to-value. Above that, the lender sets them. The depletion path has no published reserve months. Even so, your pool has to be large enough to cover the loan test.
“No Income Documentation” Is Not “No Documentation”
An asset-based loan skips income paperwork. It does not skip verification. Your assets are documented on both paths: two months of statements per account on the qualifier path, and aged statements on the depletion path.
The federal ability-to-repay rule, Regulation Z’s section 1026.43, points the same way. It lets a creditor rely on a consumer’s income or assets, other than the value of the home that secures the loan. It also requires the creditor to verify the assets it relies on, using third-party records. So your home equity can’t be the thing that proves you can repay. Your liquid assets do that work.
Other myths that come up:
- “I have to sell my investments.” No. The lender counts them, and you keep them. It’s a qualifying convention, not a withdrawal plan.
- “My statement balance is my pool.” No. Funds committed to the down payment, closing costs and cash-out purposes don’t double as qualifying assets.
- “Everything I own counts.” Cryptocurrency, precious metals, collectibles and pledged or borrowed funds aren’t published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account. The lender reviews the source.
- “Large deposits are fine.” They need a paper trail. Transfers between your own accounts or gifts get traced like any other deposit.
When DSCR Fits Better
Is the North Carolina home a rental? Then asset depletion may be the wrong tool.
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. Loan purpose and occupancy decide which bucket you’re in, as this Compliance Alliance explainer on Regulation Z and investment properties lays out.
A rental that covers its own payment qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your portfolio stays out of the math. If the rent doesn’t cover the payment well, programs below 1.00 coverage are available through select lenders in the network, but loan-to-value and terms adjust.
Asset depletion makes more sense when the rent doesn’t carry the property and you’d rather qualify as a person. That’s common for investors whose traditional personal-income documentation shows little income because of depreciation, while their accounts show real wealth. The tradeoff is that the loan is paid from your liquidity, not the property’s rent. For more on how investor loans work, see the complete DSCR loans guide.
What to Do If Cash-Out Doesn’t Work
Sometimes the answer is no for this file. Maybe the cap leaves too little room. Maybe the pool is too small.
You have options:
- Switch paths. If assets can cover the whole loan, the qualifier path may open a different door.
- Document income another way. If you’re self-employed with strong deposits, a bank statement program documents income from deposits.
- Use DSCR on a rental. The property’s rent drives lender review.
- Draw a home equity line. It’s separate from this program, and it’s repaid from your income.
- Convert assets first. Cryptocurrency or metals sold into a regulated cash account become seasoned balances.
A cash-heavy borrower should also gather documents in order: ID, credit authorization, account statements for every qualifying account, and the current mortgage statement if one exists. Then an appraisal. Then the lender’s review.
Key Terms Defined
Asset depletion: A way to qualify where eligible assets, after haircuts, are divided by 60 months to create monthly income.
Asset qualifier: A path where eligible assets alone must cover the entire loan, with no income documented.
Cash-out refinance: A new loan that pays off the old one and releases extra cash to you.
Loan-to-value (LTV): The loan amount as a percentage of the home’s appraised value.
Haircut: The portion of an asset’s balance the lender does not count.
Seasoning: The waiting period an asset must sit in your accounts before the lender counts it.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your qualifying income.
Frequently Asked Questions
Can I cash out a paid-off home in North Carolina on an asset-based loan?
Yes, on the asset depletion path, up to 60% loan-to-value on a principal residence, second home or investment property, subject to underwriting. Most programs treat cash taken against a home with no mortgage as cash-out. That means the cash-out cap applies, and the lender confirms how your file is classified.
Do my cash-out proceeds count as assets or reserves?
No, not on the depletion path. Cash-out proceeds never count as qualifying assets there. Plan on the balance that remains after closing, because the same dollars can’t be the down payment, the reserves and the income pool all at once.
Does North Carolina change the program figures?
No. The leverage, haircuts, seasoning and loan amounts are the same for a North Carolina borrower. State facts such as local prices, taxes and insurance shape your budget, but they aren’t program parameters. Lendmire’s consumer mortgage lending is licensed in 16 states, and North Carolina is one of them.
Can retirement accounts help me qualify, and do I have to withdraw from them?
Yes, they can count. On the depletion path, retirement accounts count at 70% at any age. On the qualifier path, they count at 90% under 59½ and 100% at 59½ or older. Counting them does not mean withdrawing them, because the lender counts the balance and you keep the account.
Is an asset-based cash-out the same as a no-documentation loan?
No. You skip income documentation, not verification. Statements for every qualifying account are required on both paths, and the lender reviews ownership and source of funds. Qualification runs on documented assets under the applicable program, subject to lender guidelines.
Where This Leaves You
Cash-out is possible on the depletion path, but it’s capped at 60% of the appraised value, and the pool has to survive closing. If you’re 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.
Start with the post-closing balance, not today’s. That one number tells you more than any headline limit.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s asset-based mortgage in North Carolina page presents the program for North Carolina borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. OCC Bulletin 2019-36, asset depletion underwriting
2. eCFR, 12 CFR 1026.43, ability-to-repay requirements
3. 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: Asset Qualifier vs Asset Depletion for a Cash-Out Refinance · How Jumbo Loan Asset Depletion Rules Work for a Second Home · Does an Asset Depletion Loan Require Any Income?
Guides: Asset-Based Mortgage in North Carolina
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.