The Quick Read: Fannie Mae’s asset depletion policy is a narrow agency rule for employment-related assets on a principal residence or second home. A non-QM asset depletion loan counts a wider pool of verified assets and can reach investment property through select programs in Lendmire’s wholesale network. The two share a name and a basic idea, but the eligibility boxes are very different, and all figures here are subject to lender guidelines.
- Fannie Mae’s version is limited to purchases and limited cash-out refinances on a principal residence or second home.
- The agency policy counts employment-related assets, mainly retirement money and certain severance or lump-sum distributions.
- The non-QM depletion path divides usable assets by 60 months and runs the result through a debt-to-income test.
- A separate non-QM asset qualifier path covers the whole loan with assets and documents no income.
- A New Mexico borrower with a large taxable brokerage account or a rental purchase in mind will usually land on the non-QM side.
The Honest Answer on Who Each Option Is For
Fannie Mae’s route fits a borrower buying or refinancing a home to live in, or a second home, whose wealth sits mostly in retirement accounts or an employment-related lump sum. It also fits those who want to stay inside the agency system. The non-QM route fits borrowers whose money is in brokerage accounts, savings, CDs, or sale proceeds, and borrowers who want to finance an investment property.
Neither is better in the abstract. Each is a different box, and the first job is checking which box the file fits.
One note on scope. This column of the comparison describes published agency norms. Lendmire is the broker, not the lender. Programs change and every file is underwritten individually.
Side-by-Side
The Fannie Mae column reflects published industry norms and the agency’s published selling guide, with the usual qualifiers. The non-QM column reflects typical parameters on select programs in the network, subject to underwriting. Pricing is not compared here.
| Factor | Fannie Mae asset depletion | Non-QM asset depletion path |
|---|---|---|
| Review basis | Employment-related assets turned into income | Usable assets divided by 60 months |
| Eligible assets | Mostly retirement and certain lump sums | Cash, CDs, securities, retirement, equity |
| Occupancy | Principal residence, second home | Plus investment property |
| Transaction types | Purchase, limited cash-out refinance | Purchase, rate-and-term, cash-out |
| Leverage | 70%, or 80% if owner is 62+ | 80% or 65%, 60% on cash-out |
| Documentation | Distribution letters, 1099-R, statements | Statements, 120 days old plus recent |
| Entity vesting | Individual or co-borrower owns assets | Confirm per file; consumer loan |
| Reserves | Per standard agency rules | No reserve months published |
| Timeline | Set by documentation and seasoning | Set by statement age and review |
A few notes on the non-QM column. Leverage there depends on occupancy and transaction: up to 80% on a purchase or rate-and-term refinance of a principal residence or second home, 60% on a cash-out refinance, 65% on an investment property purchase or rate-and-term refinance, and 60% on an investment cash-out. Cash-out proceeds never count as qualifying assets.
Key Terms Defined
Asset depletion: A method that treats verified assets as if they were drawn down over a set number of months to create qualifying income. Nothing is actually sold.
Employment-related assets: Fannie Mae’s phrase for retirement accounts and certain severance or lump-sum distributions from an employer.
Non-QM: A mortgage that sits outside the agency framework and follows the investing lender’s own published guidelines.
Asset qualifier path: A non-QM structure where eligible assets must equal or exceed the entire loan amount, and no income is documented.
Haircut: The percentage of an asset’s balance that does not count. A security valued at 80% has a 20% haircut.
Seasoning: How long funds have sat in an account, shown by statements.
How Fannie Mae’s Version Actually Works
Fannie Mae’s Selling Guide section on employment-related assets limits the policy to a purchase or limited cash-out refinance. It limits occupancy to a principal residence or second home. A rental purchase falls outside it.
The maximum loan-to-value is 70%, or 80% if the owner of the assets is at least 62 at closing. Jointly owned assets need every owner on the loan as a borrower, and the borrower using the income to qualify must be 62 or older. Assets owned by a non-borrower do not count.
The asset type is where many borrowers get stuck. The policy is written for employment-related assets, not any liquid money. A taxable brokerage account does not qualify on its own. A savings account does not either, unless the balance traces back to an eligible employment source. Mortgage-insurer training material from Enact MI describes severance or lump-sum funds as needing an employer distribution letter, a Form 1099-R, and a deposit into a verified asset account. It also notes that ordinary checking and savings generally do not count.
If a full distribution at the time of calculation would trigger an early-withdrawal penalty, the guide requires subtracting that penalty before income is figured. Published industry explainers describe the divisor as tied to the loan’s term, which is a different mechanic from a flat 60 months.
The result then runs through a standard debt-to-income test with the other debts. A loan that misses the parameters may still use the assets under other agency income policies, such as interest and dividend income or annuity and pension income.
How the Non-QM Version Works
Across the wholesale network, the non-QM version has two separate paths. A borrower is qualified on one path at a time, and the figures never blend.
Asset depletion path. The lender applies a haircut to each asset class. Cash accounts and CDs count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. The usable total is divided by 60 months to produce monthly qualifying income. That income must carry the housing payment and other debts through the debt-to-income test.
Take $1,500,000 in securities (80% counts as $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. The lender’s own calculation governs, and this is illustrative.
The depletion path has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. Where asset depletion is the only income source, liquid assets must be at least $250,000. Loans run from $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor on this path needs a 700 score. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived.
Asset qualifier path. Here the assets must cover the entire loan. No employment or income is documented, though the assets are fully documented. Brokerage accounts, CDs, money market, and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
An $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (90% counts as $270,000), and $200,000 in savings counts $800,000 of usable assets. That is reviewed on assets alone, subject to underwriting. Leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home, with loans up to $4,000,000. The score floor is 600. Reserves are not required at or below 75% loan-to-value.
Seasoning differs by path. The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants statements at least 120 days old at application plus a recent one within 45 days. Sale-of-business, inheritance, and legal-settlement funds are excused from that seasoning on the depletion path.
When Fannie Mae Asset Depletion Is the Better Fit
Fannie Mae’s route works best when the file already sits inside its box. That means a primary residence or second home, retirement accounts as the main asset, and a borrower who wants an agency loan.
- A retiree with a large retirement balance. If the money is in a 401(k) or IRA and the home is a principal residence, the agency policy is built for this borrower. The 80% tier requires the asset owner to be 62 or older at closing.
- A borrower with other agency-eligible income. Employment-related assets can sit alongside other documented income in a standard debt-to-income calculation.
- A borrower who wants to stay in the agency system. Agency loans follow a published selling guide, which makes the rules easy to read and compare.
- A joint file where every asset owner is a borrower. The ownership rule is simple when spouses are both on the loan.
The tradeoffs are real. The asset list is narrow. The 70% base leverage is lower than the 80% purchase ceiling on the non-QM depletion path for a primary residence. A borrower who cannot clear the guide’s asset-type rules finds out late.
When a Non-QM Asset Depletion Loan Is the Better Fit
The non-QM path fits when the wealth is broader than retirement money, or when the property is a rental.
- A seller of a business. Sale proceeds sit in a brokerage or cash account, not in an employment-related plan. For the borrower’s other paths, see Lendmire’s piece Asset Depletion vs a New Bank Statement Loan After a Business Sale.
- A borrower holding mostly taxable securities. Securities count at 80% on the depletion path and brokerage accounts at 100% on the qualifier path.
- An investor buying a rental. Agency asset depletion excludes investment property. The depletion path reaches it at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Rental investors who prefer to qualify the property rather than the person can compare Lendmire’s complete DSCR loans guide.
- A borrower whose assets cover the loan outright. The qualifier path skips income conversion entirely.
- A larger loan. The qualifier path goes to $4,000,000 and the depletion path to $3,500,000.
The tradeoffs here are also real. The lender’s own overlays apply and vary by program. The depletion path wants a significant asset base, with the minimums above. 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, with the source reviewed by the lender. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and non-vested restricted stock units are not eligible on the depletion path.
What a New Mexico Borrower Should Weigh
The program figures do not change by state. New Mexico is one of the 16 states where Lendmire’s consumer mortgage operations are licensed, so a New Mexico borrower can compare both columns above. Three local patterns come up.
Retirees relocating to New Mexico often hold both retirement accounts and taxable accounts. The retirement piece may fit the agency box. The taxable piece usually does not, which pushes mixed-asset borrowers toward the non-QM side.
Second homes are common in resort and rural areas. That is the one overlap where both options exist for the same property: a second home can fit the agency policy and the non-QM depletion path. The decision then turns on which assets the borrower holds and how much leverage is wanted.
Account titling matters. Under the agency rule, assets must belong to the borrower or a co-borrower. Borrowers whose accounts are titled in one spouse’s name, in a trust, or in a business should confirm ownership and community-property questions with a qualified New Mexico professional before applying.
Three Misconceptions Worth Clearing Up
Asset depletion means selling the assets. It does not. The calculation is a paper exercise, and the borrower keeps the accounts invested. Tax treatment varies; consult a qualified professional.
Non-QM means loose rules. Non-QM loans are regulated. The CFPB’s compliance guide on ability-to-repay describes a reasonable, good-faith determination that considers factors such as income or assets. Assets are a legitimate repayment basis. The lender simply does the math differently, and a consumer mortgage like this one carries the usual disclosures.
“No income documentation” means “no documentation.” The assets are documented on both paths. Statements, seasoning, and source review all apply.
Documentation Checklist
The checklist differs by path, but a few items repeat. Gathering them first helps avoid avoidable gaps in the file.
- Statements for every account used, covering the seasoning period for the path chosen.
- Evidence of ownership, including titling and any co-owner on the account.
- For retirement and employer-linked funds, plan documents and any distribution paperwork.
- For sale proceeds, inheritance, or settlements, the source documents showing where the money came from.
- A credit profile and housing history. The depletion path looks for 0x30x12, and one 30-day late in the last twelve months is considered case by case.
- Any other debts that will go into the debt-to-income test.
Housing events matter. A housing event needs four years of seasoning on the depletion path, and multiple bankruptcies are not eligible.
The Balanced Verdict
If the file is a principal residence or second home and the assets are retirement money, the agency policy is worth testing first. The rules are published and the structure is conventional. If the assets are broader, the property is a rental, or the loan is larger, the non-QM paths are the better match. For some borrowers, running both is the right step, since a second home can fit either one.
The deciding factors are the same on both sides: which assets count after exclusions and haircuts, how the divisor works, and what other debts sit in the ratio. Compare the usable asset balance first. The product choice usually follows from that.
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.
Frequently Asked Questions
Can I use Fannie Mae asset depletion to buy a rental property in New Mexico?
No. The agency policy limits occupancy to a principal residence or second home. A rental purchase needs a different structure, such as a non-QM depletion loan on an investment property at 65% on a purchase, or a DSCR loan that is reviewed on the property’s rent.
Does a taxable brokerage account count under Fannie Mae’s policy?
Generally not by itself. The policy is written for employment-related assets, and a brokerage account counts only if the balance traces back to an eligible employment source. On the non-QM side, securities count at 80% on the depletion path and brokerage accounts count at 100% on the qualifier path.
Is the non-QM divisor the same as Fannie Mae’s?
No. The non-QM depletion path divides usable assets by 60 months. Published industry explainers describe the agency divisor as tied to the loan term, so the same asset pool can produce different income. Confirm the agency divisor against the live guide.
Do I have to sell my investments?
No. Both approaches treat the assets as a basis for qualifying, and the accounts stay invested. The lender reviews statements and the source of funds rather than requiring liquidation.
Can retirement accounts count on the non-QM side?
Yes, though the credit given to retirement accounts differs by path. On the depletion path retirement accounts count at 70% at any age. On the qualifier path a 401(k) or IRA counts at 90% under 59½ and 100% at 59½ or older. All figures are subject to underwriting.
Lendmire’s asset-based mortgage in New Mexico page presents the program for New Mexico borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. 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 as a basis for repayment
3. CFPB Ability-to-Repay and Qualified Mortgage Small Entity Compliance Guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Bank Statement Loan vs Asset Depletion Loan for Content Creators · How Big Can an Asset Depletion Jumbo Loan Be? · How to Document a Bank Statement, 1099 or Asset Depletion Loan
Guides: Asset-Based Mortgage in New Mexico
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.