The Quick Read: Yes, through select asset-based programs you can use a 401(k) or IRA balance to qualify without withdrawing a dollar, either by counting it toward the loan itself or by converting it into monthly qualifying income, but you cannot pledge an IRA as collateral, and the program, your age, and the account type decide how much of the balance counts. Every file is underwritten individually, so these figures are ceilings and floors, not offers.
- On the asset qualifier path, eligible assets must cover the entire loan, and no employment or income is documented.
- On the asset depletion path, usable assets divided by 60 months become qualifying income.
- Retirement balances count at 90% under age 59½ and 100% after that on the qualifier path, and at 70% at any age on the depletion path.
- Your retirement account stays invested. The home secures the loan, not the account.
- Rental buyers often skip both paths and use a DSCR loan, where retirement money usually plays a supporting role as reserves.
What “Without Taking Withdrawals” Actually Means
The lender looks at your balance. It does not touch it. Your statements prove you have the money, and a formula turns that proof into either full loan coverage or monthly income.
That differs from three things people mix up with it. A withdrawal pays cash out of the account. A 401(k) plan loan borrows from the plan, and you repay yourself. A pledged-asset loan puts the account up as security. None of those three applies here, because the lender uses the balance only as proof that you have the money.
Across our wholesale network, the programs built for cash-heavy, income-light borrowers share one trait. They treat a large documented balance as the reason you can repay. They do not require a paycheck. Retirees, people who sold a business, heirs, and early-retired professionals fit this profile best.
The Two Paths: Assets Cover the Loan, or Assets Become Income
You qualify on one path at a time. Never blend their numbers.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Leverage runs up to 80% on a purchase and 75% on a refinance, on a principal residence or second home. Loans reach $4,000,000, with a 600 minimum credit score, subject to underwriting.
The asset depletion path. The lender applies haircuts, adds up what is usable, and divides by 60 months. That result is your qualifying income, and it must carry the housing payment and your other debts through the debt-to-income test. Loan amounts run from $125,000 to $3,500,000, and credit follows the lender’s matrix.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Retirement credit | 90% under 59½, 100% at 59½+ | 70% at any age |
| What it must do | Cover the whole loan | Become monthly income |
| Purchase leverage, primary or second home | Up to 80% | Up to 80% |
| Purchase leverage, investment property | Not offered | Up to 65% |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Statement rules | 60 days, two months per account | Statements 120+ days old, plus one within 45 days |
All of these are subject to underwriting, and programs change.
How Much of Your Retirement Balance Counts?
Less than the full balance on most files, and the discount depends on the path. The discount exists because retirement money carries tax and access friction. The lender is not assuming you will liquidate it.
On the qualifier path, a 401(k) or IRA counts at 90% if you are under 59½ and at 100% once you reach 59½. Brokerage accounts, certificates of deposit, money market, and savings count at 100%, and accounts combine. Here is an illustrative example. Say an $800,000 loan is backed by $330,000 in brokerage accounts (100% counts, $330,000), $300,000 in a 401(k) under 59½ (90% counts, $270,000), and $200,000 in savings (100% counts, $200,000). That is $800,000 of usable assets, so the file is reviewed on assets alone, subject to underwriting.
On the depletion path, the haircuts are steeper. Cash and certificates of deposit count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70%, and real-estate equity at 60%. Say you hold $1,500,000 in securities (80% counts, $1,200,000) and $300,000 in cash (100% counts). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income, which then has to carry the housing payment and your other debts. The lender’s own calculation governs.
A few balances do not count on the depletion path at all. These include deferred compensation, non-vested restricted stock units, stock options, and custodial accounts. Lenders also count only the vested portion of an employer plan, so document the vested balance rather than the account total. If you have an outstanding 401(k) plan loan, expect that amount to come off the balance.
Why You Cannot Pledge an IRA (and Do Not Need To)
Pledging an IRA as loan security is a prohibited transaction. IRS Publication 590-B says the pledged portion is treated as a distribution and included in gross income. The 10% early-distribution tax may also apply if you are under the age threshold. An IRA custodian, Horizon Trust, notes that IRAs have no loan feature at all.
None of this blocks the programs above. Neither path takes a lien on the account. You show statements, the lender counts a percentage, and the property secures the mortgage. The account never moves, and that is why no distribution happens.
What About a 401(k) Plan Loan?
A plan loan is a different tool, and for a home purchase it is often a worse fit. Per the IRS 401(k) resource guide, the plan must permit loans. The limit is 50% of your vested balance, up to $50,000. Repayment runs five years unless the loan buys your main home. A rental purchase is not a main home.
Leaving your job or missing payments can turn the unpaid balance into a taxable distribution. And a plan loan is still money you must repay, which an asset-based mortgage never asks of the account.
Under 59½: What Changes
Age matters on the qualifier path and almost nowhere else. Under 59½, the same retirement dollars count at 90% instead of 100%. You do not need to be retired, and you do not need to be drawing down anything.
Many early-retired professionals and recently exited business owners fit here. The practical fix for a thin file is to pair retirement money with cash, brokerage, or savings, which count at 100% on the qualifier path. Some investors also find that a modest balance in a plan with restricted access gets a haircut or exclusion, so plan access is worth confirming early.
What the Lender Will Ask For
Here is the document list on a typical asset-based file:
- Two months of statements for each qualifying account on the qualifier path, with at least 60 days of seasoning.
- On the depletion path, statements at least 120 days old at application plus the most recent statement within 45 days.
- Proof of vesting and plan access for employer plans.
- A paper trail on any large deposit or transfer. Sale-of-business, inheritance, and legal-settlement funds are excused from the depletion-path seasoning.
- Assets such as crypto, precious metals, or collectibles are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account.
The assets are always documented. “No income documentation” never means “no documentation.”
Depletion also has minimums. Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan, and never less than $250,000 liquid when depletion is your only income source. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived.
Retirement Money and the Rental You Want to Buy
If the property is a rental, the picture shifts. A DSCR loan is designed for non-owner-occupied investment properties. Because it is a business-purpose investor loan, it is reviewed differently from a standard owner-occupied mortgage. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
In that file, your retirement account usually shows up as reserves, not income. Most lenders accept the balance at a discount, and the discount is a program decision. It varies a good deal across the network. The same dollars cannot serve as both income and reserves, so the account does one job on a given file.
If you want your personal assets to carry an investment property, the depletion path allows it, at lower leverage. That is 65% on a purchase or rate-and-term refinance, and 60% on cash-out, on an investment property. Most rental buyers with strong rent coverage find DSCR cleaner.
Self-Directed IRA Financing Is Not the Same Thing
Some investors hold real estate inside a self-directed IRA. There, the IRA itself is the borrower, the loan has to be non-recourse, and you cannot personally guarantee it. Debt-financed income can also trigger unrelated business income tax, as the IRA Club’s UBIT guide explains with worked examples.
This is a specialty path with its own custodian and rules. It is not a mortgage on a retirement account that you own personally, and it is not something Lendmire’s network offers.
Options Compared
| Option | Account touched? | Main tradeoff |
|---|---|---|
| Asset qualifier | No | Assets must cover the whole loan |
| Asset depletion | No | Haircuts and lower leverage |
| Take a distribution | Yes | Money leaves the tax shelter |
| 401(k) plan loan | Yes | Capped, and must be repaid |
| Pledge an IRA | Yes | Treated as a distribution |
Tax treatment varies; consult a qualified professional before choosing between these.
Who This Fits, and Who Should Pass
It fits you if your balances are large and your documented income is small. It also fits if you would rather keep your money invested than liquidate it.
It is a poor fit if the same retirement money also funds your living expenses and there is little else behind it. A mortgage that rests on assets is only as steady as those assets. Think through what happens to your cash flow if markets drop. The loan payment does not shrink with your balance.
A strong approach is to run both paths on paper before choosing. One often wins on leverage, the other on how much of your balance it needs.
Common Myths
- “I can borrow against my IRA like a 401(k).” You cannot. IRAs have no loan provision.
- “I must start distributions to show income.” Not on the asset paths above. The balance itself is the proof.
- “Retirement money counts at full value everywhere.” It does not. Treatment differs by path, age, and program.
- “Asset depletion and DSCR are the same loan.” They are not. One is reviewed around assets, the other qualifies the property on rent coverage.
Key Terms Defined
Asset qualifier path: a program route where eligible assets must cover the whole loan and no income is documented.
Asset depletion path: a route where usable assets divided by 60 months become qualifying income.
Haircut: the percentage of a balance the lender does not count.
Seasoning: how long funds have sat in your account before they can count.
Vested balance: the part of an employer plan that is legally yours.
Prohibited transaction: an IRA use the tax rules forbid, such as pledging it as loan security.
Non-recourse loan: a loan where the lender can claim only the property, not you personally.
Frequently Asked Questions
Do I have to be retired to use a retirement account this way?
No. Neither path requires retirement. Age affects only the credit percentage on the qualifier path, where balances count at 90% under 59½ and 100% after. Employment status is not part of the qualifier path at all.
Does using my 401(k) or IRA in the file trigger a tax event?
The calculation itself is not a withdrawal, and the account stays where it is. A distribution or an IRA pledge would be a different story. Check with a tax professional about your own situation.
Do Roth accounts count?
Roth treatment is confirmed file by file. Programs generally list 401(k) and IRA balances together, but lender overlays and plan rules can change how a specific account is treated, so ask early.
Can I combine retirement money with brokerage and savings?
Yes. On the qualifier path, accounts combine, and brokerage, savings, money market, and certificates of deposit count at 100%. That is usually the cleanest way to cover a loan if you are under 59½.
Can I use this for a rental property?
Through select programs, yes, on the depletion path at lower leverage. Most rental buyers instead use a DSCR loan, where retirement money often counts as reserves and the property’s rent carries the file.
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. Consumer asset-based lending is available in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Lendmire is a broker and arranges financing through select lenders. This is not a commitment to lend.
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.
Investors who want the broader program framework can review how DSCR loans work.
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References
2. Horizon Trust: Borrowing Against an IRA
3. IRS 401(k) Resource Guide: General Distribution Rules
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 You Get an Asset Qualifier Mortgage With a Co-Signer? · How Many Accounts Can You Combine on an Asset Qualifier Mortgage? · Do Business Bank Accounts Count Toward an Asset Qualifier Mortgage?
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.