The Quick Read: The agency version is built for a borrower who lives in the home and holds employment-related assets. The non-QM version is built for a borrower whose balances are large but whose documented income is thin. A Pennsylvania borrower with a seasoned portfolio and little reported income usually has more room on the non-QM side, while a borrower with retirement-plan money and a plain owner-occupied purchase may fit the agency rules.
- Fannie Mae’s policy, titled “Employment-Related Assets as Qualifying Income,” covers purchases and limited cash-out refinances on a principal residence or second home.
- Across Lendmire’s wholesale network, the asset depletion path divides usable assets by 60 months to create qualifying income.
- The asset qualifier path skips income entirely and requires usable assets to cover the whole loan.
- Pennsylvania adds no separate program rules. The figures below are the same in every state where the program is placed.
Both options turn a balance sheet into a mortgage file. They differ on which assets count, how much of each balance counts, and what the property can be. Every figure here is subject to underwriting and to the lender’s own calculation.
Side-by-Side
The agency column reflects published industry norms. The non-QM column reflects the typical parameters across select lenders in Lendmire’s wholesale network, subject to underwriting.
| Factor | Fannie Mae asset depletion | Non-QM asset depletion |
|---|---|---|
| Review basis | Employment-related assets become monthly income | Usable assets divided by 60 months become income |
| Eligible assets | Employment-related assets only | Cash, CDs, securities, retirement, equity (with haircuts) |
| Occupancy | Principal residence, second home | Principal residence, second home, investment property |
| Transaction | Purchase, limited cash-out | Purchase, rate-and-term, cash-out |
| Leverage cap | 70%; 80% if the asset owner is 62 or older | 80% / 60% cash-out on a home; 65% / 60% on an investment property |
| Borrower vesting | Natural persons only | Set by the lender and the program |
| Joint assets | All owners must be borrowers | Reviewed by the lender |
| Early-withdrawal penalty | Subtracted from the income stream | Handled through the retirement haircut |
That table is a starting map. Program guides change, and each file is underwritten on its own facts.
What Does “Asset Depletion” Mean in Each Product?
The phrase covers two different products that share one idea. A borrower keeps the assets, nothing is sold, and a formula converts the balance into income on paper.
Fannie Mae does not use the phrase at all. Its Selling Guide topic B3-3.4-06 treats employment-related assets as qualifying income. The calculation sets aside required funds, subtracts any penalty a full distribution would trigger, and converts the rest to a monthly stream that then goes through standard debt-to-income and credit rules. The guide restricts the method to purchases and limited cash-out refinances on a principal residence or second home. Maximum LTV, CLTV and HCLTV is 70%, and an update announced in 2018 added an 80% tier when the asset owner is at least 62 at closing.
The non-QM version is a portfolio-style product placed through a wholesale network. It does not depend on where the asset came from. A brokerage account, a CD, or a retirement balance can count, each at its own percentage. The divisor and haircuts belong to the program, so a number quoted by one lender says little about another.
Two Paths in the Non-QM Version
Across Lendmire’s wholesale network, asset-based files split into two paths, and a borrower is on one at a time.
On the asset qualifier path, eligible assets after the credit percentages must equal or exceed the entire loan amount. No employment or income is documented. The credit percentages run 100% on brokerage accounts, CDs, money market and savings. Retirement balances count at 90% under age 59½ and at 100% from 59½ on. Loans run up to $4,000,000, with leverage up to 80% on a purchase and 75% on a refinance of a principal residence or second home. The credit floor is 600. Seasoning is 60 days, with two months of statements per qualifying account. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Illustratively, an $800,000 loan backed by $330,000 in brokerage accounts, $300,000 in a 401(k) held under 59½ (counted at 90%, or $270,000), and $200,000 in savings counts $800,000 of usable assets. It is reviewed on assets alone, subject to underwriting.
On the asset depletion path, usable assets after haircuts are divided by 60 months. That income must carry the housing payment and other debts through the debt-to-income test. Haircuts run:
- cash and CDs at 100%
- securities at 80%
- private stock at 75%
- retirement accounts at 70% at any age
- real-estate equity at 60%
Loans run $125,000 to $3,500,000. Statements must be at least 120 days old at application, plus a recent statement within 45 days. Illustratively, $1,500,000 in securities (counted at 80%, or $1,200,000) plus $300,000 in cash counts $1,500,000 of usable assets. Divided by 60 months, that is $25,000 of monthly qualifying income to be tested against the housing payment and other debts.
When Fannie Mae Asset Depletion Is the Better Fit
The agency route fits a borrower whose assets are tied to employment and whose goal is a home to live in. Think of a retiring professional rolling over a plan balance and buying a principal residence or second home in Pennsylvania, whose title will be in a personal name. The rules are published, the policy sits in a public guide, and the fallback is useful: a loan outside the asset-depletion parameters may still use the assets under the guide’s other income topics, such as interest and dividend income or annuity, pension or retirement income.
It also fits where leverage is modest. A buyer putting down 30% or more stays inside the 70% cap. A borrower aged 62 or older can reach 80%. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Three conditions matter on these files.
1. Asset source. An ordinary savings or brokerage balance is generally not eligible unless it traces to an employment-related source, such as severance or a lump-sum retirement distribution, according to an Enact MI training deck.
2. Joint ownership. If an asset is jointly owned, all owners must be borrowers.
3. Vesting. Fannie buys mortgages made to natural persons. An LLC cannot be the borrower.
If those three line up, the agency route is a clean, documented option.
When a Non-QM Asset Depletion Loan Is the Better Fit
The non-QM route fits when the assets do not look like employment money, or the property is not an owner-occupied home. Examples include sale proceeds from a business, an inheritance, a legal settlement, or a large taxable brokerage account. On the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from the seasoning rule.
It also fits when the borrower needs more leverage flexibility on a cash-out, or a purchase of an investment property. The depletion path allows 65% on an investment property purchase or rate-and-term refinance and 60% on a cash-out, through select programs. Cash-out proceeds never count as qualifying assets.
The tradeoffs are real:
- The haircuts are heavier. Retirement balances count at 70% on the depletion path at any age.
- The minimums are higher. Qualified assets 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 the only income source.
- A first-time investor on the depletion path needs a 700 score. Otherwise the lender’s matrix governs.
- Several asset types are 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.
- 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.
On the depletion path, asset-derived income can also supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
The Rental Question
An investor reading this should know where the line falls. Agency asset depletion does not finance a rental. The occupancy line in the Fannie guide limits it to a principal residence or second home.
Lendmire’s wholesale network places the non-QM depletion path on investment property, but at lower leverage. That is a consumer-purpose product with its own debt-to-income test. If the goal is a business-purpose rental purchase, the file usually leads with the property instead. DSCR loans are designed for non-owner-occupied investment properties, and because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Rental coverage is the main test there, and sub-1.00 programs exist through select lenders, with LTV and terms adjusted. A borrower with a large balance sheet may use assets to buy a home and DSCR to buy the rentals. Lendmire’s complete DSCR loans guide covers that side.
For a broader look at choosing between documentation styles, see Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers.
Key Terms Defined
Asset depletion: A calculation that turns a balance into monthly qualifying income without selling the assets.
Asset qualifier path: A path where eligible assets alone must cover the entire loan, with no income documented.
Haircut: The share of a balance a lender discounts, so only the remaining share counts.
Non-QM: A mortgage outside the qualified mortgage box, underwritten individually.
Seasoning: The length of time funds must sit in an account before they count.
Documents That Slow Pennsylvania Files
The program figures do not change by state, so the friction is in the paperwork.
- Statement gaps. The qualifier path needs two months per account. The depletion path needs an older statement and a recent one. A missing page is the usual hold-up.
- Retirement access. Plan statements should show the vested balance and the owner’s age.
- Large deposits. A transfer between accounts needs a paper trail. Funds from a sale need the settlement statement.
- Joint accounts. Confirm who owns what before application.
Non-QM does not mean light underwriting. The lender still reviews ability to repay, and every file is underwritten individually.
Which Path Fits You?
- Live in the home, plan-based assets, personal name: the agency route is worth a look.
- Taxable brokerage, sale proceeds or inheritance, home purchase: the non-QM path likely fits.
- Balances cover the whole loan: the qualifier path.
- Large portfolio, income needed on paper: the depletion path.
- Buying a rental: lead with DSCR, and use assets as support.
Frequently Asked Questions
Do I have to sell my assets to qualify?
No. Both versions are qualifying calculations. The borrower keeps the accounts, and the lender documents balances through statements.
Can a retirement account count?
Yes, with limits. On the qualifier path a 401(k) or IRA counts at 90% under 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age, subject to underwriting.
Can I buy a rental with Fannie Mae asset depletion?
No. The method is limited to a principal residence or second home. A rental purchase is usually evaluated as a business-purpose loan, which points toward DSCR.
Does Pennsylvania change the program?
The program figures do not change by state. Lendmire’s consumer lending is licensed in Pennsylvania, and state facts such as taxes and insurance are context for the budget, not program parameters.
What if I am denied on one path?
It often means the file fits the other. A borrower whose assets are not employment-related may move to non-QM. A borrower short on depletion minimums may test the qualifier path.
Balanced Verdict
Neither option is better in general. Fannie Mae’s rules suit a borrower buying a home to live in with employment-related assets and personal-name title. The non-QM version suits a borrower with a wider mix of balances, sale or inheritance funds, or a property outside the agency box, and who accepts heavier haircuts and higher asset minimums. 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 Pennsylvania page presents the program for Pennsylvania 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. Fannie Mae Selling Guide B3-3.4-06
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 Big Can an Asset Depletion Jumbo Loan Be? · How to Document a Bank Statement, 1099 or Asset Depletion Loan · Bank Statement Loan vs Asset Depletion Loan for Content Creators
Guides: Asset-Based Mortgage in Pennsylvania
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.