The Quick Read: You qualify by documenting eligible assets that, after the program’s credit percentages and after your down payment and closing costs leave your accounts, equal or exceed the entire loan, so the lender reviews your statements instead of paychecks, subject to underwriting. The structure fits a second home you plan to use yourself, such as a lake cottage or a ski chalet. If the home will mostly be a rental, a different path usually fits better. Lendmire is a broker that places these files through select lenders in its wholesale network.
- The asset qualifier path covers the whole loan with assets and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create qualifying income.
- On a purchase of a principal residence or second home, the qualifier path goes up to 80% loan-to-value, through select programs.
- Seasoning is 60 days with two months of statements per account on the qualifier path.
- Local rules and HOA bylaws can decide whether a Michigan rental plan works at all.
A lake cottage near Traverse City or a ski chalet in the northern Lower Peninsula is the kind of purchase this loan was built for. The buyer often has seven figures in brokerage accounts and almost no paycheck. A standard lender looks at that file and sees no income. A lender running an asset-based program sees a balance sheet that can carry the loan.
This guide walks through how that works, step by step. It covers the two paths, what counts as an asset, where the rules break, and what a Michigan buyer should decide before signing a purchase contract.
What Is an Asset Qualifier Mortgage?
An asset qualifier mortgage is a home loan approved on your verified assets rather than your income. Lenders and borrowers also call it asset depletion, asset utilization, or asset-based income. Those labels get used loosely, which causes confusion.
Across the wholesale network Lendmire works with, the labels split into two different programs. Treat them as separate products:
- The asset qualifier path. Your eligible assets, after credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
- The asset depletion path. Your eligible assets are converted into a monthly qualifying income. That income then runs through a debt-to-income test with your housing payment and other debts.
A borrower is qualified on one path at a time. You do not blend the two tables. Your assets stay invested in both cases. The math is a qualifying convention, not a withdrawal plan, so nobody asks you to sell a stock to prove the loan works.
One more point matters up front. No income documented never means no documentation. The lender reviews your statements closely, checks the source of funds, and still pulls credit.
Which Path Fits a Michigan Vacation Home?
Pick the path by how you will use the home. If it is a second home for your own use, the qualifier path is usually the cleaner fit. If it is a pure rental, the depletion path is the one that allows investment property.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Converted to monthly income |
| Income documented | None | Derived income, DTI test |
| Second home leverage | Up to 80% purchase | Up to 80% purchase |
| Investment property | Not offered | Up to 65% purchase |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
All figures are ceilings through select programs, subject to underwriting. They are not offers. Each lender’s own calculation governs.
Picture a retired professional who sold a business and holds the proceeds in brokerage accounts. The goal is a Michigan lake house for family summers. Assets cover the loan outright, so the qualifier path fits. Now picture an early retiree who wants to buy a Michigan cabin as a full-time rental. Investment property is only available on the depletion path, with lower leverage.
How Underwriting Treats Your Assets, Step by Step
Underwriting an asset-based file follows a predictable sequence. Knowing it helps you prepare statements before you shop for the house.
1. Inventory the accounts. List every account you plan to use. Eligible categories differ by path, which the next section covers.
2. Apply the credit percentages. Each account counts at a share of its balance. Cash counts in full, and some other assets count for less.
3. Subtract what the deal consumes. Your down payment and closing costs leave your accounts first. The remainder is what the lender can count.
4. Test the path. On the qualifier path, usable assets must equal or exceed the whole loan. On the depletion path, usable assets divided by 60 months become monthly income.
5. Check seasoning and sourcing. The lender confirms the money has sat in your accounts long enough and came from a reviewable source.
6. Review credit and housing history. The lender checks your score, your mortgage payment history, and any past housing event.
Run the subtraction before you make an offer, not after.
Key Terms Defined
Asset qualifier path: A program that approves the loan when your eligible assets equal or exceed the entire loan amount, with no employment or income documented.
Asset depletion path: A program that divides usable assets by 60 months to create a monthly qualifying income.
Seasoning: The time money must sit in your accounts before the lender counts it.
Haircut: The share of an account’s balance a lender subtracts because the asset is less liquid. A 70% credit means a 30% haircut.
Debt-to-income ratio (DTI): Your monthly debts, including the new housing payment, divided by your monthly income.
Loan-to-value (LTV): The loan amount divided by the property’s appraised value or price, whichever the lender uses.
Second home: A home you occupy for part of the year and that is not your main residence. Lenders limit rental use on it.
What Counts as an Asset, and at What Percentage
Each path has its own table of credit percentages. Never carry a percentage from one path to the other.
Asset qualifier path (share of balance that counts):
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% if you are under age 59½, and 100% at 59½ or older.
- Accounts combine, so several smaller balances can add up to the loan amount.
Asset depletion path (share of balance that counts):
- Cash accounts and certificates of deposit: 100%.
- Securities: 80%.
- Private stock: 75%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
On the depletion path, several categories are not eligible. They are 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, 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, with the lender reviewing the source. A buyer holding a large crypto position should plan for that conversion well before applying. Cash-out proceeds from another property never count as qualifying assets on the depletion path.
Here is the arithmetic, using illustrative figures. The lender’s own calculation governs.
Qualifier path. Say the loan is $800,000. You hold $330,000 in brokerage accounts, which count at 100% for $330,000. You hold $300,000 in a 401(k) and are under 59½, so it counts at 90% for $270,000. You hold $200,000 in savings, which counts at 100% for $200,000. Counted assets total $800,000, which equals the loan. That is the bare minimum, and it assumes the balances are what remains after your down payment and closing costs have already left your accounts. If those costs still have to come out of these same accounts, the counted total drops below the loan and the file falls short. Size the purchase so the leftover balances, not the starting ones, cover the loan.
Depletion path. Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, for $1,200,000. Cash counts at 100%, for $300,000. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income must then carry the housing payment and your other debts through the debt-to-income test.
Leverage, Credit, and Loan Size
Leverage depends on the path and on how you will occupy the home. Every figure below is a ceiling through select programs, subject to underwriting.
- Qualifier path: up to 80% LTV on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out is allowed on this path, and at what leverage, is set by the lender and is not published.
- Depletion path, principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and up to 60% on a cash-out refinance.
- Depletion path, investment property: up to 65% on a purchase or rate-and-term refinance, and up to 60% on a cash-out refinance. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Credit works differently by path. The qualifier path has a published 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount, and a first-time investor on that path needs a 700. Housing history on both is 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a past housing event needs four years of seasoning.
Reserves are simple on the qualifier path. None are required at or below 75% LTV, and above that the lender sets them. A purchase at the 80% ceiling therefore comes with a reserve requirement set by the lender. The depletion path publishes no reserve months. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The depletion path carries 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 in liquid assets when asset depletion is your only income source. If you also have documented income, asset-derived income can supplement it up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Seasoning and Statements
Seasoning is where well-funded buyers get surprised. The two paths ask for different things.
On the qualifier path, funds need 60 days of seasoning, and the lender wants two months of statements for each qualifying account. A transfer between your own accounts last week is a question the lender will ask you to explain.
On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning. For someone who just sold a company, that exception is a real help.
If you are moving money to meet an asset requirement, do it before you apply and keep a paper trail. Large deposits with no clear source slow a file down and sometimes sink it.
Second Home or Rental? Where the Michigan Plan Matters
Occupancy is the question that decides everything else. The qualifier path covers principal residences and second homes. A second home is something you use yourself, and lenders limit how much you may rent it out.
If you buy primarily to rent the home, you are buying an investment property. On the asset-based consumer programs, that means the depletion path and its lower leverage. The other route is a DSCR loan. 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.
The honest answer for a lot of Michigan buyers is a hybrid plan. They want a family cottage and some rental income to offset costs. The financing should match the primary purpose. Declare the occupancy you will actually follow, because the declaration drives the program and the leverage.
Where the General Rule Breaks
A few Michigan-flavored edge cases deserve a hard look before you commit.
Rental income cannot rescue an asset file. On the qualifier path, the property’s rent is not what qualifies you. Your assets do. If you plan to rent, treat that income as a bonus you cannot count on.
The appraiser’s rent figure and your real rent can differ. The rent schedule form estimates traditional long-term leasing income. A home that earns well by the night in summer can look weak on that form. That gap is one reason rental-based files on seasonal properties need a careful income review. It is also why a buyer with strong assets sometimes skips rental underwriting entirely.
Short-term rental rules vary. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income. Michigan has no statewide short-term rental license, according to bnbcalc’s Michigan guide, so local ordinances do the work. Michigan STRA notes that HOAs can limit or ban rentals and can amend their bylaws, and that grandfathering is not a legal requirement. MSU Extension describes a short-term rental as a commercial use of residential property for brief stays rather than long-term leases. That commercial label is part of why neighbors and municipalities push back in tourist areas.
Insurance can exclude rental use. Standard homeowners policies often exclude commercial rental activity. A buyer who plans any rentals should ask the insurer in writing before closing.
Retirement age changes the math. On the qualifier path, a 401(k) counts at 90% under 59½ and 100% after. A buyer who turns 59½ in a few weeks may strengthen the file by waiting, though the decision rests on the whole picture.
Some assets do not count at all. A buyer whose wealth sits in a private business account, crypto, or collectibles must convert it to seasoned cash first. The business account counts only for the borrower’s ownership share.
Credit history can block an otherwise rich file. Assets do not erase multiple bankruptcies or a recent housing event.
Michigan Property Realities
Some property features that matter for a Michigan getaway are practical rather than financial. Lake cottages in older communities may have seasonal road access, shared docks, or wells and septic systems. Ski and resort condos may sit inside an association with its own rules and restrictions. Waterfront homes can carry flood considerations. A cabin built for summer use may not be winterized.
These details affect appraisal, insurance, and which lenders will lend on the property. They are worth confirming before the contract goes firm, not after. A seasonal-access cottage that suits you perfectly may also narrow the pool of lenders that will review it. (This is the quiet reason an agent who knows lake properties earns the commission.)
Property taxes and local costs also differ by county, so budget for them as part of the carry. Tax treatment varies; consult a qualified professional.
How It Compares With Other Ways to Buy
Different programs solve different problems. This table describes each program by its own rules, not as Lendmire’s asset-based program.
| Option | Best for | Income documented |
|---|---|---|
| Asset qualifier | Assets cover the loan | None |
| Asset depletion | Assets become income | Derived income |
| DSCR loan | Pure rental purchase | Property rent |
| Bank statement | Self-employed with deposits | Deposit history |
| HELOC on primary home | Existing home equity | Per the bank’s rules |
Agency, FHA, VA, conventional, and full-documentation jumbo programs sit outside this table. Each of those programs relies on documented income, and each applies its own rules. The bank statement program is for borrowers who document income with deposits. Business-purpose rental financing is DSCR.
Some buyers weigh a home equity line on their primary residence against an asset-based purchase. The line keeps the portfolio untouched but adds a second lien and a variable obligation. An asset-based purchase keeps the financing separate from your main home. Neither choice is wrong. Pick the one that matches your risk comfort.
A Michigan Lake House, Worked Through
Run the numbers on a hypothetical buyer. These figures are illustrative, and the lender’s own calculation governs.
A couple sold their business. They want an $800,000 loan on a lake house they will use for family weekends and a few summer weeks, as a second home. They are both under 59½, so the 401(k) counts at 90%.
They choose the qualifier path. To reach $800,000 of counted assets after the down payment and closing costs have left their accounts, they need balances like these remaining: $330,000 in brokerage accounts at 100%, $300,000 in a 401(k) at 90% for $270,000, and $200,000 in savings at 100%. That adds up to $800,000, matching the loan. Their starting balances were higher, because the down payment and closing costs came out first. Through a select program and subject to underwriting, the file is then reviewed on assets alone.
Then they check the details. Reserves are set by the lender because an 80% purchase sits above the 75% threshold. The assets have sat in the accounts well beyond 60 days, and two months of statements are ready for each account. Credit clears the 600 floor, and the housing history is clean.
The lesson is the order of operations. Size the purchase against what remains after cash to close, not against the starting balance. Waiting to move funds until after an offer is accepted creates avoidable stress.
Now change one variable. If they decide to rent the lake house most of the year, it is an investment property. The qualifier path no longer applies, leverage on the depletion path is capped at 65% on a purchase, and a DSCR loan becomes a serious alternative.
From the files Lendmire sees, the buyers who do best treat statements as the main project. They choose the path first, size the purchase against usable assets second, and pick the house third. Buyers who do it in the reverse order tend to hit seasoning or sizing problems late.
Pros, Cons, and When It Is Not a Fit
What works in your favor:
- You can qualify without documenting employment or income on the qualifier path.
- You keep your portfolio invested rather than selling to fund the purchase.
- Loan amounts reach $4,000,000 on the qualifier path through select programs.
What works against you:
- Your assets are tested against the entire loan, which demands a large balance.
- Retirement accounts are discounted at most ages.
- Rental plans face occupancy limits on a second home.
- Leverage on an investment property is lower than on a second home.
This is usually not the fit when your documented income already supports a conventional loan, when most of your wealth sits in ineligible assets, or when you plan a full-time rental business better served by DSCR financing.
Frequently Asked Questions
Do I have to sell my investments to use an asset qualifier mortgage?
No. Your assets are counted and documented, not liquidated. They stay invested, though your down payment and closing costs do leave your accounts, so those funds will not count afterward.
Can I rent out a Michigan vacation home financed this way?
Only within the limits of the occupancy you declare. A second home is for your own use, and lenders restrict rental activity on it. If you plan to rent most of the year, the property is an investment property, which points to the depletion path or a DSCR loan. Local rules and HOA bylaws can also restrict rentals.
Do retirement accounts count?
Yes, with limits. On the qualifier path, 401(k) and IRA balances count at 90% if you are under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Is this the same as a DSCR loan?
No. An asset qualifier scores your assets, and a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. They solve different documentation problems. Which fits depends on whether you will occupy the home or rent it.
Is anything documented on an asset qualifier file?
Yes, quite a lot. The program reviews statements, source of funds, credit, housing history, and the appraisal. What is left out on the qualifier path is employment and income documentation.
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. Reach the team at 828-256-2183 or request a quote.
For most Michigan getaway buyers, the winning move is the same: decide how you will use the house, then let that choice pick the loan.
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 traditional personal-income documentation, 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. bnbcalc – Michigan Short-Term Rental Guide
2. Michigan STRA – Regulations
3. MSU Extension – Considering regulation of short-term rentals
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 Two North Carolina Retirees Buy a Home Together on an Asset Qualifier Mortgage? · How to Finance a Colorado Vacation Home With an Asset Qualifier Mortgage · Pledged Asset Line vs Asset Qualifier Mortgage for a Texas Home Purchase
Guides: Asset-Based Mortgage in Michigan
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.