The Quick Read: Fannie Mae’s asset depletion method is built for primary homes and second homes, counts only employment-related assets such as retirement accounts, and does not reach a rental property, while a non-QM asset depletion loan placed through select lenders can count a wider mix of assets and, on the depletion path, can finance an investment property at lower leverage, subject to underwriting.
- Fannie’s version is the better tool for a retiree buying or refinancing a home they will live in, when the money sits in retirement accounts.
- A non-QM version fits borrowers whose wealth sits in brokerage accounts, cash, or a mix, or who want a rental.
- Non-QM has two paths: assets cover the entire loan, or assets are converted into monthly income.
- Neither route is “no documentation.” Every account counted is documented.
- Program figures do not change by state, so an Indiana borrower works from the same ranges described below.
Side-by-Side
The Fannie column below shows published agency rules. The non-QM column shows typical ranges from the select wholesale-network programs Lendmire places consumer files with. Every figure is subject to underwriting, and the lender’s own calculation governs.
| Factor | Fannie Mae method | Non-QM (network programs) |
|---|---|---|
| Review basis | Assets become monthly income | Assets cover the loan, or assets become income |
| Eligible assets | Employment-related, mainly retirement | Brokerage, cash, CDs, retirement, more |
| Occupancy | Primary and second home only | Primary, second home, and investment (depletion path) |
| Transactions | Purchase, limited cash-out | Purchase and refinance; cash-out limited |
| Documentation | Statements, penalty adjustments | Statements for every account counted |
| Borrower type | Natural persons | Individual borrowers, consumer purpose |
| Reserves | Set by underwriting findings | Qualifier: none at or below 75% LTV |
That table is the whole comparison in miniature. The sections below explain the rows that decide most files.
How Fannie Mae’s Version Works
Fannie’s method is narrow by design. Under the Fannie Mae Selling Guide section on employment-related assets, it applies only to purchases and limited cash-out refinances, and only on a principal residence or second home. A rental purchase is outside it.
The assets must be employment-related. Think 401(k) balances, IRAs, and retirement or severance distributions. A mortgage-insurer training deck summarizing the guide says other balances are generally not eligible unless they trace back to an eligible employment-related source. Your brokerage account built from salary savings may not count.
Two more details matter. The assets must be yours alone, or any co-owner must also be on the loan. And if a penalty would apply to a full withdrawal, that penalty is subtracted before income is figured.
Leverage is tight. The guide caps loan-to-value at 70%, or 80% when the asset owner is 62 or older at closing. After that, the result runs through the usual debt-to-income and credit rules. Fannie loans also go to individuals; an education site on Fannie’s borrower rules notes that LLCs and corporations cannot borrow.
How a Non-QM Asset Depletion Loan Works
No single rulebook governs this loan. Each lender sets its own divisor, asset discounts, and seasoning. Across the wholesale network Lendmire works with, two paths show up, and a borrower is qualified on one path at a time.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000, subject to underwriting.
- Brokerage accounts, CDs, money market, and savings count at 100%.
- 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- Leverage reaches 80% on a purchase and 75% on a refinance, for a principal residence or second home.
- Seasoning is 60 days, with two months of statements for each account.
- The credit floor is 600.
- No reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
Here is a sanctioned illustration. Picture an $800,000 loan backed by $330,000 in brokerage accounts (counted at 100%), $300,000 in a 401(k) under 59½ (90% counts, or $270,000), and $200,000 in savings (100%). That is $800,000 of usable assets, so the file can qualify on assets alone.
The asset depletion path. Usable assets are divided by 60 months to create monthly qualifying income. That income must carry the housing payment and other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000.
- Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
- Leverage on a principal residence or second home reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance.
- On an investment property, leverage is 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance.
- Cash-out proceeds never count as qualifying assets.
The illustration here: $1,500,000 in securities counts at 80%, or $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 usable, divided by 60 months, for $25,000 of monthly qualifying income. Then the housing payment and other debts are tested against it.
When Fannie Mae’s Version Is the Better Fit
Choose Fannie’s method when your profile matches its narrow lane. It fits best when:
- the home is your residence or a second home;
- your wealth is mostly in retirement accounts, which is exactly what the method targets;
- you are 62 or older, which unlocks the higher leverage cap on the guide’s terms;
- you want a conforming loan, with its documentation and underwriting culture.
Picture a retired Indiana couple selling a larger house and buying a smaller one. Their wealth is mostly in IRAs and 401(k) accounts. Fannie’s method was written for that borrower. If the file fits cleanly, the agency path may be simpler to explain and underwrite.
The honest limit is that it only fits if the assets, ownership, and property use line up. One co-owner who is not on the loan, or a brokerage account that is not employment-related, can break it.
When a Non-QM Asset Depletion Loan Is the Better Fit
Non-QM earns its place when the file falls outside Fannie’s lane. That happens in several common ways.
Your assets are not employment-related. A business sale, inheritance, legal settlement, or a large brokerage account is the usual story. On the depletion path, statements normally must be at least 120 days old at application. Funds from a business sale, inheritance, or legal settlement are excused from that seasoning.
The property is a rental. Fannie’s method excludes investment property. The depletion path in the network allows it, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. That is a consumer-purpose loan underwritten on your personal assets.
You need a larger loan or want assets to cover it outright. The qualifier path reaches $4,000,000 with no income documented, subject to underwriting.
You are under 62. Fannie’s higher leverage cap turns on age. The network’s depletion path leverage does not.
Now the trade-offs. Non-QM asks for more asset documentation, not less. The depletion path requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. If asset income is your only income, liquid assets must be at least $250,000. A first-time investor on the depletion path needs a 700 credit score. Other asset classes, such as cryptocurrency, precious metals, and collectibles, are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Not eligible 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.
Some lenders in the network allow asset-derived income to supplement documented income up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived. That helps borrowers with a small pension and a large portfolio.
Where Most Borrowers Go Wrong
Three mistakes come up repeatedly. Borrowers assume “asset depletion” is one product. It is two. A word like “depletion” also scares people into thinking they must sell the accounts. They do not. The calculation is a qualifying convention, not a withdrawal plan.
The second mistake is blending the numbers. The qualifier path and the depletion path use different percentages. Quote one table and you will overstate the other. Retirement accounts count at 90% or 100% on one path and 70% on the other. Name the path every time.
A third, quieter one: borrowers focus on the headline approval and forget the underlying credit. Housing history is expected to run clean. One 30-day late payment 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.
Retirement withdrawals can carry tax consequences; tax treatment varies, so consult a qualified professional.
A Quick Decision Rubric
Ask four questions, in order.
1. Is the property a rental? If yes, Fannie’s method is out. Look at the depletion path, or at a loan that is reviewed on rent.
2. Where do the assets sit? Mostly retirement accounts and a home you will live in? Fannie may fit. Mixed or non-retirement assets? Non-QM is broader.
3. Could the assets cover the whole loan? If so, the qualifier path skips income entirely, subject to underwriting.
4. How much leverage do you want? Compare Fannie’s 70% or 80% cap, the network’s qualifier-path ceilings, and the depletion-path ceilings. Pick the one your down payment actually supports.
Borrowers also ask how this stacks against a bank statement loan. That program is for people who document income through deposits. Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers walks through that decision.
Key Terms Defined
Asset depletion: a method that turns a pile of savings and investments into a monthly qualifying income, without selling anything.
Non-QM: a mortgage that falls outside the standard agency rulebook, with each lender setting its own guidelines.
Seasoning: how long assets have been in your accounts before a lender will count them.
Employment-related assets: retirement accounts and similar funds that trace back to a job, which Fannie’s method targets.
Haircut: the discount applied to an asset, so only part of its balance counts.
Verdict
Fannie Mae’s method is the cleaner choice when the home is yours to live in, the money is in retirement accounts, and the file matches the guide line by line. Non-QM is the broader choice when the assets are varied, the property is a rental, the loan is large, or the borrower is under 62. It is a genuine split, not a ranking. The mix of assets and the use of the property decide it, and Indiana changes none of those figures.
Frequently Asked Questions
Can I use Fannie Mae asset depletion on a rental property?
Generally no. Fannie’s guide limits the method to a principal residence or second home. A rental needs a different route, such as the depletion path of a non-QM program, which allows investment property at lower leverage, subject to underwriting.
Do I have to sell my investments to qualify?
No. On both paths the assets stay where they are. The lender counts them for qualifying only, and it documents each account with statements. Nothing is sold or pledged.
Does non-QM mean I skip documentation?
No. Income is not documented on the qualifier path, but the assets are, with two months of statements per account and 60 days of seasoning. The depletion path wants statements at least 120 days old plus one within 45 days.
Do the figures differ for an Indiana borrower?
No. The program figures do not change by state. Lendmire’s consumer lending is licensed in 16 states, Indiana among them, and local taxes and insurance only affect the housing payment you must carry.
Do crypto holdings count?
Not as published. Cryptocurrency, precious metals, and collectibles are not listed as eligible on either path. The documented route is converting them to cash in a regulated account, with the source reviewed by the lender.
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. For a fuller picture of how investor financing fits together, see the complete DSCR loans guide. Programs change and every file is underwritten individually. This is not a commitment to lend.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
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.
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References
1. Fannie Mae Selling Guide: Employment Related Assets as Qualifying Income
2. Enact MI training deck on assets and repayment obligations
3. Homebuyer.com: Fannie Mae general borrower eligibility
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 Do a Cash-Out Refinance on an Asset Depletion Loan? · Does an Asset Depletion Loan Require Any Income? · Can an LLC Hold Title on an Asset Depletion Loan?
Guides: Asset-Based Mortgage in Indiana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.