The Quick Read: Usually not: on an asset-based mortgage that is reviewed against balances, the lender reviews your statements, credit and the property instead of your traditional personal-income documentation, though the answer depends on which path you use, and a blended file that counts other income can bring documents back into play. Your assets are still fully documented. Only the income paperwork changes.
- Asset qualifier path: eligible assets must cover the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income, which then runs through a debt-to-income test.
- Blended files: if documented income supplements your assets, that income gets documented, and returns can come up.
- Rental-property loans: a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
- Colorado: the program figures below do not change by state, and Lendmire’s consumer mortgage business is licensed in Colorado among 16 states.
Key Terms Defined
Asset-based mortgage. A home loan where your balances, not your paycheck, carry the qualification. The name covers two different paths, described below.
Asset qualifier. A path where your eligible assets, after the percentages that apply to each type, must equal or exceed the whole loan amount.
Asset depletion. A path that turns your usable assets into a monthly income figure by dividing them over 60 months. The assets are counted, not sold.
Seasoning. How long money must sit in your accounts before it counts. Recent deposits draw questions.
DSCR. Debt service coverage ratio. For a rental, it is monthly rent divided by the full monthly housing payment: principal, interest, taxes, insurance and association dues.
Debt-to-income (DTI). Your monthly debts as a share of your monthly income. The depletion path runs its derived income through this test.
Which “Asset-Based Mortgage” Do You Mean?
The phrase gets used for two different things, and the tax-return answer differs between them.
The first is borrower-asset-based: your balances qualify you. That is the focus of this article, for a home you will live in or a second home, and on one path for an investment property. Retirees, people who sold a business, heirs and households living off a portfolio use it most. Their balances are large and their documented income is small.
The second is property-asset-based: the rental’s income drives lender review. That is a DSCR 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.
On a DSCR file, the lender takes the rent from the lease or the appraiser’s rent schedule (Form 1007 for a single-family home, Form 1025 for two to four units). It divides that rent by the full housing payment. Your personal income never enters the math, so traditional personal-income documentation generally is not part of the file. Across the wholesale network Lendmire works with, the usual stack is a credit authorization, an appraisal with rent schedule, bank statements showing reserves, entity documents if an LLC holds title, an insurance quote and the purchase contract. LLC borrowers are subject to program terms.
Lendmire’s complete DSCR loans guide walks through that path in full.
How the Asset Qualifier Path Works Without Income Documents
On the asset qualifier path, your eligible assets must cover the entire loan. The lender documents no employment and no income. It looks at what you own, how long you have held it, and your credit.
Through select programs, typical leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Loans go up to $4,000,000. The minimum credit score is 600. Reserves are generally not required at or below 75% loan-to-value, and above that the lender sets them. Whether cash-out proceeds are allowed, and at what leverage, is up to the lender. All of this is subject to underwriting.
Not every dollar counts at full value. Accounts combine, and here is how each type is treated:
| Asset type | Share that counts |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Run an illustration. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets. The assets cover the loan, and the file can qualify on assets alone. The lender’s own calculation governs, and this is illustrative only.
Seasoning matters here. Funds typically need 60 days in the account, and the lender wants two months of statements for each qualifying account.
How the Asset Depletion Path Works
On the depletion path, your usable assets become monthly qualifying income. That income must then carry the housing payment and your other debts through the debt-to-income test. So the lender is computing income here, just from your balances instead of a paycheck.
The haircuts are different from the qualifier path, so do not mix the two tables:
| 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% |
Take $1,500,000 in securities (80%, so $1,200,000) plus $300,000 in cash (100%, so $300,000). That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That figure then has to carry the housing payment and other debts. The income is derived, not paid to you, and you never have to sell anything.
Typical leverage on this path is up to 80% on a purchase or rate-and-term refinance of a principal residence or second home, and 60% on a cash-out refinance. On an investment property, it is 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.
Loan amounts run from $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor typically needs a 700 score. Qualified assets generally must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is your only income source. Statements should be at least 120 days old at application, plus one dated within 45 days. All of this is subject to underwriting.
Some assets do not count at all. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock and funds from non-regulated financial companies are out.
When Tax Returns Can Still Come Up
A flat “no tax returns” is true on a clean assets-only file. A few situations change it.
Blended income. Asset-derived income may supplement documented income, up to a 45% debt-to-income ratio. When that happens, the minimum-assets rule is waived. But the other income now has to be documented, and what the lender asks for depends on the income type and the program. Returns can be part of that.
Lender overlays. Programs differ, and some lenders layer on their own requirements. Across the network, the strictest overlays ask for more paper than the typical file does. A lender can ask for what it wants. Skipping returns is a program choice, not a ban on collecting them.
Standard full-documentation loans. Conventional and full-documentation jumbo programs typically ask for traditional personal-income documentation. That is why a credit-union checklist telling you to bring two years of returns can be accurate for those loans and not for yours.
Using a rental for personal cash. A rental’s business-purpose treatment depends on what the money is for. The Federal Register rulemaking on ability-to-repay says business-purpose loans fall outside that rule and counts investment-purpose loans as business-purpose. Doss Law flags the trap: a refinance of a rental to pay personal bills can be consumer-purpose. That points you to a different product with different documents.
Also note the loan on a home you live in is a consumer mortgage, so standard consumer disclosures apply. DSCR loans are business-purpose and exempt from TRID, the federal loan-disclosure rule. CFPB’s Regulation Z summary lists business-purpose credit as an exempt transaction.
What You Provide Instead
Skipping returns does not mean a light file. Expect to supply:
- Statements for every qualifying account, covering the seasoning window for your path
- A written explanation and paper trail for large recent deposits
- Credit authorization and a government ID
- A purchase contract, or the details of the property you are refinancing
- An appraisal, ordered through the lender
- For funds from a business sale, an inheritance or a legal settlement, the closing statement or award paperwork (the depletion path excuses these from the 120-day seasoning rule)
The strongest files we place are boring. Balances sit in regulated accounts, in the borrower’s own name, with no unexplained transfers. The files that stall usually have funds moved in too recently, money held in a business account, or balances parked in a form the program does not list.
Cryptocurrency, precious metals, collectibles 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. The lender reviews the source of that money.
If you sold a company recently, Lendmire’s piece Can Tech Founders Get a Mortgage After an Exit Without Tax Returns? covers that situation in more depth.
How It Compares With Other Loan Types
| Loan type | Income source | Traditional income documentation |
|---|---|---|
| Asset qualifier | Assets cover the loan | Not part of the file |
| Asset depletion | Assets divided by 60 months | Not the basis; may arise if other income is added |
| Bank statement | Deposits document income | Not the basis |
| DSCR | Property rent covers payment | Generally not required |
| Conventional or full-doc jumbo | Wages or business income | Typically required |
The bank statement program is for borrowers who earn income and document it with deposits. If you are self-employed with strong cash flow, that may fit better. Lendmire’s article How Many Years of Tax Returns Does a Self-Employed Mortgage Need? covers that side of the question.
Who It Fits, and Who Should Pass
It fits when your balances are large and your documented income is not. Think of a retiree living off a portfolio, a seller of a business with proceeds in cash, someone who received an inheritance or settlement, or an early-retired professional. For these borrowers, a return can show little income even though the net worth is substantial.
It also fits when the loan is small relative to your cash. On the qualifier path, the file works because the assets cover the loan outright.
Pass, or at least compare, if you have strong, steady wage income and clean returns. A standard full-documentation loan may be simpler and cheaper for you. Also pass if most of your wealth sits in assets that count at low percentages, like real-estate equity at 60%, or in assets the program does not list. And if your balances are modest, the depletion minimums will rule you out. A broker’s honest job is to run both versions and tell you which one wins.
What Changes in Colorado?
Nothing in the program. The leverage caps, asset percentages, seasoning rules and loan-amount ranges above are the same for a Colorado buyer as for anyone else. What differs is the property: local prices, taxes and insurance shape how much loan you need, and therefore how many assets must cover it. That is context, not a program parameter.
High-priced Colorado purchases push borrowers toward larger loans. That makes the asset-minimum rules matter more, especially the 1.25 times loan-balance test on the depletion path.
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.
Frequently Asked Questions
Do I need conventional personal-income paperwork for an asset-based mortgage in Colorado?
Usually not. On the asset qualifier path, no income is documented, and on the depletion path your assets become the income. Returns can come up if you blend in other documented income or if a lender’s overlay asks for them.
What replaces standard personal-income documentation?
Account statements, a paper trail for large deposits, credit, an appraisal and the purchase or refinance details. The assets are documented on both paths. “No income documentation” never means no documentation.
Do I have to sell my investments?
No. The depletion path counts a share of your assets as income without liquidating them. The qualifier path counts them against the loan amount. Your portfolio stays where it is, though cash-out proceeds never count as qualifying assets.
Can I use retirement accounts?
Yes. 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 they count at 70% at any age.
Is this the same as a no-doc loan?
No. It is a non-QM consumer mortgage underwritten individually on your assets, credit and the property. Files are documented heavily, just not with income paperwork. Programs change, and every file is subject to lender guidelines and underwriting.
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’s asset-based mortgage in Colorado page presents the program for Colorado 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. Federal Register: Ability-to-Repay and Qualified Mortgage Standards Under the Truth in Lending Act
2. Doss Law: Business Purpose Exemption Simplified
3. CFPB Regulation Z (Truth in Lending) summary
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 Verification Works on a Mortgage With No Tax Returns · Can Equity in a Rental Property Help You Qualify for an Asset-Based Mortgage? · Does an Asset Depletion Loan Require Any Income?
Guides: Asset-Based Mortgage in Colorado
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.