The Quick Read: Fannie Mae’s asset income rule is a narrow tool for buying a primary home or second home with retirement money or an employment lump sum, while a non-QM asset depletion loan is a lender-built program that counts a wider mix of assets and can also reach investment property. Neither wins across the board. The right choice depends on which assets you hold, what you are buying, and how much leverage you need.
- Fannie’s rule covers purchases and limited cash-out refinances on a principal residence or second home only.
- Fannie’s maximum loan-to-value is 70%, or 80% when the asset owner is 62 or older.
- Non-QM depletion counts cash, securities, private stock, retirement accounts and real-estate equity, each at its own percentage, subject to underwriting.
- Non-QM runs on its own pricing and rules, set by each program, so figures differ from the agency’s.
Who Each Option Is Really For
If your wealth sits in a 401(k), an IRA or an employer lump sum, and you are buying a home to live in, Fannie Mae’s rule is worth a look first. If your money sits in a brokerage account, a sale of a business, or an inheritance, or if the property is a rental, you will likely end up in non-QM.
That is the honest split. The two products share a name and little else.
Fannie Mae’s version is a small income-calculation rule inside a conforming loan. A conforming loan is a mortgage that follows the guidelines of Fannie Mae or Freddie Mac. Non-QM stands for non-qualified mortgage. It is a loan that sits outside those standard agency boxes, so each program writes its own rules for assets, leverage and credit.
Montana borrowers fall into both camps. Retirees moving in and second-home buyers often hold large balances and little documented income. The program figures below do not change by state. Lendmire is a mortgage broker whose consumer lending is licensed in 16 states, Montana among them, and it places these loans through select lenders in its wholesale network. Every figure here is subject to underwriting.
For the broader picture on investor financing, see the complete DSCR loans guide.
Side-by-Side
The Fannie column below shows published industry norms from the Selling Guide. The non-QM column shows what Lendmire sees across its network, through select programs. Pricing is not compared here.
| Factor | Fannie Mae asset income (published norms) | Non-QM asset depletion (network) |
|---|---|---|
| Review basis | Eligible assets turned into income, then DTI | Assets become income (DTI) or cover the loan outright |
| Eligible assets | Employment-related: retirement, lump sums | Cash, CDs, securities, private stock, retirement, equity |
| Property types | Principal residence or second home | Primary, second home, and investment property (depletion path) |
| Transaction types | Purchase or limited cash-out refinance | Purchase, rate-and-term, cash-out (depletion path) |
| Max leverage | 70%, or 80% if asset owner is 62+ | 80% / 60% on primary or second; 65% / 60% on investment |
| Early-withdrawal penalty | Subtracted before income is figured | Handled through the retirement haircut |
| Joint accounts | All owners must be borrowers | Reviewed by the lender case by case |
| Vesting | Individual borrower | Personal, as a consumer loan |
| Documentation | Recent statements within age limits | Statements 120 days old plus one within 45 days |
| Reserves | Set by the conforming file | No published reserve months (depletion path) |
DTI means debt-to-income ratio, the share of monthly income that goes to debt payments. A haircut is the percentage of an account’s balance that a lender counts. A balance counted at 80% takes a 20% haircut.
A few rows deserve a closer look. Leverage on the non-QM side depends on both occupancy and transaction. The 80% figure applies to a purchase or rate-and-term refinance on a principal residence or second home. A cash-out refinance on those same properties tops out at 60%. On an investment property, the ceilings are 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
Two Non-QM Paths, One at a Time
Non-QM asset loans come in two flavors, and you qualify on one path at a time.
The asset qualifier path ignores income entirely. Your eligible assets, after the credit percentages, must equal or exceed the whole loan amount. No employment or income is documented. Loans run up to $4,000,000, and leverage tops out at 80% on a purchase and 75% on a refinance. Credit starts at a 600 minimum score.
The asset depletion path turns assets into monthly income. Usable assets are divided by 60 months, and that figure runs through the DTI test. Loans run from $125,000 to $3,500,000. The credit floor follows the lender’s matrix, and a first-time investor needs a 700.
Here is how each path counts the same kinds of money:
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Cash, CDs, savings | 100% | 100% (cash and CDs) |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
Never blend the two columns. A file gets one path.
Running the Numbers
Say an $800,000 loan on the qualifier path. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100%, so $200,000). Usable assets total $800,000. That covers the loan on assets alone.
Now the depletion path. You hold $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). Usable assets come to $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the DTI test.
These examples show the shape of the math. The lender’s own calculation governs.
Fannie Mae’s version works differently. The lender subtracts any early-distribution penalty, then removes the funds you need for down payment, closing costs and reserves. It converts what remains into monthly income using a divisor set in the Selling Guide, then runs a normal DTI. Check the divisor on the guide page itself, since it is a detail that deserves a direct read.
When Fannie Mae’s Asset Income Is the Better Fit
Fannie’s rule wins when your situation fits its narrow lane, and when it does, a conforming loan is often a strong outcome.
It fits best when three things line up. The money is in a retirement account or an employment lump sum. The property is a principal residence or second home. The loan is a purchase or a limited cash-out refinance.
The Fannie Mae Selling Guide section on employment-related assets sets the box. Maximum loan-to-value is 70%, rising to 80% if the asset owner is at least 62 at closing. When an asset is jointly owned, all owners must be borrowers. The borrower using the income must be 62 or older to get the 80% tier. Documents must meet the guide’s age rules for credit documents.
Picture a 63-year-old Montana buyer rolling a former employer’s retirement balance into a second home near a lake. Her money is retirement money, the property is a second home, and her leverage need is under 80%. This is exactly the file that rule was built for. The conforming path may suit her well, subject to the lender’s review.
One more point in its favor: if your loan falls outside those parameters, the guide points to other standard income rules, such as interest and dividend income or annuity and pension income. Your assets may still help under those.
When a Non-QM Asset Depletion Loan Is the Better Fit
Non-QM wins when your assets, your property or your loan size fall outside Fannie’s box.
Your assets are not employment-related. A brokerage account, proceeds from a business sale, an inheritance or a legal settlement typically falls outside Fannie’s employment-related focus. On our depletion path, securities count at 80% and cash at 100%. Funds from a business sale, an inheritance or a settlement are excused from the 120-day statement-age rule.
The property is an investment property. Fannie’s asset income rule is closed to it. Our depletion path allows investment property at 65% on a purchase or rate-and-term refinance, and 60% on a cash-out. Not every non-QM program accepts investment property, so this varies across programs.
You need a larger loan. The qualifier path goes to $4,000,000 and the depletion path to $3,500,000, subject to underwriting.
You want income left out of the file. On the qualifier path, no employment or income is documented. Assets are still fully documented: 60 days of seasoning and two months of statements for each qualifying account. This is not a no-doc loan.
You hold a wider asset mix. Private stock counts at 75% and real-estate equity at 60% on the depletion path. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not 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 of those funds.
Asset depletion can also supplement documented income. It may fill the gap up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
Honestly, this is a close call for some borrowers. If you are 62 or older, your money is in a rollover IRA and your leverage need is modest, Fannie’s path may deliver more with less friction. If you are under 62 or need more leverage, non-QM usually opens more doors. Reasonable brokers split on which to try first.
Reserves, Credit and Minimums
The non-QM side has hard floors worth knowing. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. Where asset income is the only income, liquid assets can never fall below $250,000. The qualifier path needs no reserves at or below 75% loan-to-value, and above that the lender sets them.
Credit follows its own rules. Housing history of 0x30x12 is the standard. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path. Approval is never promised, and every file is underwritten individually.
Does Non-QM Mean Less Scrutiny?
No. Non-QM asset loans still require the lender to confirm you can repay. The federal ability-to-repay rule, Regulation Z section 1026.43 at the CFPB, lets a lender base that decision on income, on assets other than the home securing the loan, or both. The lender must consider and verify only what it actually relies on.
That means asset loans are not looser. They are differently built. Your statements get verified, and your credit gets reviewed.
Both of these products are consumer mortgages. DSCR loans are a separate path, designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Key Terms Defined
Asset depletion means converting a pile of assets into a monthly qualifying income figure by dividing usable assets by a set number of months.
Haircut means the reduction a lender applies to an account balance before counting it.
Seasoning means how long funds have sat in your account before the lender will count them.
Employment-related assets are retirement accounts and lump sums tied to a job, the kind of assets Fannie’s rule recognizes.
Which Should You Try First?
Run through four questions.
1. Is the property a principal residence or second home? If it is an investment property, Fannie’s rule is out.
2. Is the money in retirement accounts or an employment lump sum? If it is mostly brokerage, sale proceeds or an inheritance, expect non-QM.
3. Do you need more than 70% leverage, or more than 80%? Fannie caps there. Non-QM caps depend on path and occupancy.
4. Is the loan over the conforming limit, or are your assets unusual? Non-QM takes it from there. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
If you answer yes to the first two and your leverage need is modest, start with the agency route. If any answer points elsewhere, go straight to non-QM and save yourself a failed attempt. Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers covers the neighboring decision.
One housekeeping note. Fannie Mae relocated this section within the Selling Guide and restated it for clarity without changing its intent, so older articles may cite the earlier section number. Retirement withdrawals can also carry tax consequences. Tax treatment varies; consult a qualified professional.
The Verdict
Fannie Mae’s rule is the better tool when your assets are employment-related, the home is yours to live in, and the loan fits conforming rules. A non-QM asset depletion loan is the better tool when your assets are broader, your property is an investment, your loan is larger, or you want the loan covered by assets alone.
Neither is cheaper or safer by default. Each is a different box with different edges. Many Montana buyers will find the decision is made for them by one fact: what kind of account holds the money.
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 and the lenders review each file.
Frequently Asked Questions
Is Fannie Mae asset depletion the same as a non-QM asset depletion loan?
No. Fannie’s version is a narrow rule inside a conforming loan, limited to employment-related assets on a primary home or second home. A non-QM program writes its own asset list, haircuts and property rules, so the two can give very different results from the same balances.
Can I use retirement accounts under each option?
Yes, under both, with different treatment. Fannie subtracts any early-distribution penalty first. On the non-QM qualifier path, retirement balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age, subject to underwriting.
Do I have to sell my investments?
No. The assets are used to calculate qualifying income or to show coverage of the loan, and they must be documented and unrestricted. Selling is not part of the calculation.
Can I use either option for an investment property?
Not under Fannie’s asset income rule, which covers principal residences and second homes only. Some non-QM programs allow investment property on the depletion path at 65% on a purchase or rate-and-term refinance and 60% on a cash-out, through select programs. Rental-focused investors often look at DSCR instead.
What if my money came from selling a business?
Fannie’s employment-related focus typically leaves sale proceeds outside its rule. On our depletion path, business-sale funds are excused from the 120-day statement-age rule, though they are still documented and reviewed. The source of the funds matters.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B3-3.4-06, Employment Related Assets as Qualifying Income
2. CFPB Regulation Z § 1026.43, Minimum Standards for Transactions Secured by a Dwelling
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 an LLC Hold Title on an Asset Depletion Loan? · Can You Do a Cash-Out Refinance on an Asset Depletion Loan? · Fannie Mae vs Non-QM Asset Depletion: Which Counts More of Your Assets?
Guides: Asset-Based Mortgage in Montana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.