The Quick Read: Fannie Mae’s version rarely fits a rental purchase because it counts only employment-related assets, such as a 401(k) or IRA, and is built for primary residences and second homes. A non-QM asset depletion loan counts a wider range of assets and, through select programs, can finance an investment property. Both turn savings into qualifying income. They differ sharply in which assets count, which properties are allowed, and how much flexibility you get.
- Fannie Mae’s route is the narrower one. It generally works for a home you will live in or use as a second home, not for a pure rental.
- A non-QM asset depletion loan applies set percentages to your assets, then divides the total by 60 months to create income.
- Lendmire’s network also places an asset qualifier path, where assets alone cover the whole loan and no income is documented.
- Virginia does not change the program figures. Fannie Mae’s policy and the non-QM guidelines are national.
- Every figure below is subject to underwriting, and each file is reviewed individually.
Here is the honest answer on who each option serves. Fannie Mae’s route suits a borrower with a large vested retirement account, or a recent severance or retirement distribution, who is buying a home to live in. The non-QM route suits a borrower whose wealth sits in brokerage accounts, cash, or a mix of account types, or who wants financing on an investment property. If you are a Virginia retiree, a business seller, or a household living off a portfolio, the first question is which property you are buying. That answer often decides the path before the math does.
Side-by-Side
The left column reflects published industry norms for Fannie Mae’s approach, and the right column reflects guidelines in Lendmire’s wholesale network for the asset depletion path unless a row says otherwise. Both are subject to lender guidelines and underwriting.
| Factor | Fannie Mae approach | Non-QM asset depletion |
|---|---|---|
| Review basis | Employment-related assets become income | Usable assets ÷ 60 months become income |
| Eligible assets | 401(k), IRA, SEP, Keogh, severance, lump sums | Cash, CDs, securities, retirement, equity (haircut) |
| Property use | Generally primary and second homes | Primary, second home, or investment property |
| Documentation | Asset and distribution proof, full DTI file | Asset statements, DTI test on derived income |
| Entity vesting | Generally individual borrowers | Individual borrower on consumer loans |
| Leverage | Agency caps, looser for owners 62 and older | Lower on investment property than on a home |
| Reserves | Set by agency rules and lender | Depletion: none published. Qualifier: none at 75% LTV or less |
| Loan size | Agency loan limits | $125,000 to $3,500,000 (depletion path) |
Entity vesting deserves one extra note. Both columns describe consumer loans, so the borrower is generally an individual. If you want to hold a rental in an LLC, that conversation belongs to a DSCR loan, subject to lender program eligibility.
How Fannie Mae’s Version Actually Works
Fannie Mae never uses the phrase asset depletion in its rules. Its policy treats employment-related assets as qualifying income, and the Fannie Mae income assessment page confirms the policy was moved to a new section number in a rewrite without changing its intent or requirements.
Per Enact MI’s training deck, the assets must be liquid and available to you. The qualifying sources are a severance package, a lump-sum retirement distribution, or a 401(k), IRA, SEP, or Keogh account. A lump sum must be documented with the employer’s distribution letter or Form 1099-R and deposited to a verified account. Ordinary bank balances generally do not count unless they came from one of those eligible sources.
That is where most people get tripped up. A large brokerage account feels like an asset, yet it is not on the employment-related list. The same is true of inheritance, divorce proceeds, real-estate sale proceeds, lawsuit awards, stock options, and non-vested restricted stock. Those funds can still help with a down payment and reserves. They just do not become qualifying income.
The mechanics are straightforward. The lender totals the eligible assets and subtracts transaction costs, plus any early-withdrawal penalty if you are under the age where penalties apply (the Enact deck covers this). The lender then spreads the net amount over the loan term to produce monthly income. That income feeds the standard debt-to-income test (DTI is your monthly debts divided by your monthly income), along with ordinary credit and loan-to-value rules.
How the Non-QM Version Works
Across Lendmire’s wholesale network, two different asset-based paths exist, and a borrower is qualified on one path at a time. Mixing them is a common error borrowers make when they compare programs.
The asset depletion path converts assets into income. Usable assets, after the percentages below, are divided by 60 months. The result must carry the full housing payment and your other debts through the DTI test. Through select programs, the percentage of each balance that counts looks like this:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%, and private stock at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
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 are not eligible on this path. 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.
Here is an illustration, and the lender’s own calculation governs. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100% counts). That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income, which then has to carry the housing payment and your other debts.
The depletion path has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. If the asset income only supplements documented income, it may count up to a 45% DTI, and the minimum-assets rule is waived. A housing event such as a foreclosure needs 4 years of seasoning on this path. A first-time investor needs a 700 score, and otherwise credit follows the lender’s matrix. The depletion path publishes no reserve months.
The asset qualifier path skips income entirely. Eligible assets, after credit percentages, must equal or exceed the whole loan amount. 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. As an illustration, an $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (90% counts, so $270,000), and $200,000 in savings counts $800,000 of usable assets. That is reviewed on assets alone, subject to underwriting.
This path covers loans up to $4,000,000 on principal residences and second homes. It allows up to 80% loan-to-value on a purchase and 75% on a refinance, with a 600 minimum score. No reserves are required at or below 75% loan-to-value, and above that the lender sets them.
On the depletion path, leverage is up to 80% on a principal residence or second home purchase or rate-and-term refinance, 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.
Seasoning, meaning how long funds have sat in your accounts, differs by path. The qualifier path wants 60 days and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application plus the most recent one within 45 days. Funds from a business sale, inheritance, or legal settlement are excused from that seasoning on the depletion path. Either way, the assets are fully documented. Skipping income documentation never means skipping documentation.
When Fannie Mae Is the Better Fit
Fannie Mae’s approach is the better fit when the property is a home you will live in and your wealth sits in a vested retirement account. A retiree rolling a 401(k) into an IRA and buying a primary residence is the textbook case. So is someone holding a recent severance package or lump-sum retirement distribution.
It also fits borrowers who want agency-style underwriting and whose assets fit its narrow list. The rules are published, standardized, and the same everywhere, including Virginia. Agency rules also loosen leverage for an asset owner aged 62 or older, and jointly owned assets generally require every owner to be a borrower on the loan.
The drawbacks are real, though. The eligible-asset list is short, and sale proceeds and inheritance do not count. The route generally does not extend to investment property. If your balance sheet is mostly brokerage, cash, or other non-employment assets, you may find the conventional door does not open.
When a Non-QM Asset Depletion Loan Is the Better Fit
A non-QM asset depletion loan is the better fit when your assets are large and diversified but fall outside Fannie Mae’s list. A business seller with cash from the sale is the clearest example. Seasoning is excused on that money, and cash counts at 100% on the depletion path.
It also fits when the property is an investment property. The percentages are tighter there, at 65% and 60% as described above, but the door is open. Asset-based qualification also helps early-retired professionals and portfolio households, whose documented income is thin because they live on withdrawals.
The asset qualifier path is the better fit when your assets simply cover the loan. If you have $800,000 of usable assets and an $800,000 loan, there is no income to prove. That is a different conversation from converting assets into income.
The trade-offs are plain. The depletion path applies haircuts, so $1,000,000 in securities counts for less than $1,000,000. Minimum-asset thresholds are high. And non-QM programs vary by lender, so the same file can look different across the network. Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers lays out how those alternatives stack up against each other.
What About Rental Income Instead?
If the property is a rental, there is a third tool that skips both asset-depletion routes. Fannie Mae’s own rule counts 75% of gross rent minus the property’s payment on one- to four-unit investment properties, as Fannie Mae’s subject rental income rule lays out. That still runs through your personal income and DTI, so it does not solve an income-light file.
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. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
A strong-balance-sheet investor sometimes qualifies for several of these. Which one fits depends on the property, the profile, and the goal.
Which Assets Trip People Up
| Asset | Fannie Mae approach | Non-QM depletion path |
|---|---|---|
| 401(k) or IRA | Counts if vested and withdrawable | Counts at 70% |
| Brokerage account | Generally not on the list | Counts at 80% as securities |
| Cash and CDs | Only if from eligible source | Counts at 100% |
| Sale or inheritance funds | Do not count as income | Cash counts, seasoning excused |
| Cryptocurrency | Does not count | Convert to seasoned cash first |
Lender guidelines govern every row. The right column describes Lendmire’s network guidelines, subject to underwriting.
Key Terms Defined
Haircut: the percentage cut a lender takes off an asset’s balance because it may lose value or be hard to access.
Seasoning: how long funds have been in your account, which shows they are really yours.
Debt-to-income ratio (DTI): your total monthly debts divided by your gross monthly income.
Non-QM: a mortgage that follows lender-designed guidelines rather than a standardized agency rulebook.
Qualifying income: the monthly figure a lender uses to decide whether you can carry the loan.
The Verdict
Choose Fannie Mae’s route if the property is a home you will occupy and your wealth sits in a vested retirement account or a fresh distribution. Choose a non-QM asset depletion loan if your assets are broader, the property is an investment, or the agency list leaves your balance sheet out. Choose the asset qualifier path if your usable assets cover the whole loan.
Neither is a better product in the abstract. They are different tools for different balance sheets. Tax treatment varies; consult a qualified professional before relying on any deduction.
Frequently Asked Questions
Can I use Fannie Mae asset depletion on a rental property?
Generally no. The policy is built around purchases and limited refinances on primary residences and second homes. For an investment property, Fannie Mae’s rental-income method still runs through your personal DTI. A non-QM depletion loan or a DSCR loan is the usual path.
Does asset depletion mean I have to sell my investments?
No. The lender counts your balances to calculate qualifying income and does not require you to liquidate them. Cash-out proceeds from the new loan never count toward qualifying assets, and the lender’s own calculation governs.
What is the difference between the asset qualifier and asset depletion paths?
The qualifier path needs assets, after credit percentages, to cover the entire loan, with no income documented. The depletion path turns usable assets into monthly income using a 60-month divisor, and that income must pass the DTI test. A borrower is qualified on one path at a time.
Does Virginia change any of these rules?
No. The program figures are the same in every state. Lendmire’s consumer mortgage lending is licensed in 16 states, Virginia among them. Virginia taxes, insurance, and local prices are context for your budget, not program parameters.
Will my 401(k) count under both options?
Under Fannie Mae’s approach it generally counts if it is vested and you can withdraw from it. On the non-QM depletion path it counts at 70% at any age. On the qualifier path it counts at 90% under 59½ and 100% at 59½ or older. All of this is subject to underwriting.
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. As a broker, Lendmire arranges these loans through select lenders in its wholesale network. This is not a commitment to lend.
Lendmire’s asset-based mortgage in Virginia page presents the program for Virginia 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. Fannie Mae, Income assessment simplified
2. Enact MI, Assets as a Basis for Repayment
3. Fannie Mae B3-3.8-02, Rental income: subject property
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 Much of Mutual Funds Counts Toward Asset Depletion Income? · Can You Get an Asset Depletion Loan While Paying Alimony? · How to Document a Virginia Asset Qualifier Mortgage Without an Employer
Guides: Asset-Based Mortgage in Virginia
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.