The Quick Read: Yes, usually, but the best route depends on how large your balances are relative to the loan: through select programs, eligible assets can cover the loan outright or be converted into qualifying income, and the RMD itself can also count as income with proper documentation, all subject to underwriting. Which path fits you comes down to the size of your accounts, the property, and your credit profile. Lendmire is a broker, so it arranges these loans through select lenders in its network and does not lend directly.
- Asset qualifier path: eligible assets must equal or exceed the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become monthly qualifying income, which then runs through a debt-to-income test.
- Counting the RMD as income: possible under agency-style rules, but it adds documentation and a test that the account will last.
- Rental property: a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so your RMD income is not the test.
- Assets are always documented. Skipping income paperwork never means skipping statements.
Which Path Fits a Borrower Living on RMDs?
Retirees living on RMDs usually have a big balance sheet and a small income line. That mismatch is the whole problem. A standard income-based mortgage reads the small line. The asset-based programs read the large one.
Four routes are worth comparing. Only one of them is built around your income, and it is not always the strongest.
| Path | What the lender tests | Best fit |
|---|---|---|
| Asset qualifier | Eligible assets cover the whole loan | Large balances, modest loan |
| Asset depletion | Assets divided by 60 months, then debt-to-income | Large balances, higher payment |
| RMD counted as income | Documented distributions plus proof they continue | Steady RMDs, strong ratios |
| DSCR (rental only) | Property rent versus the property payment | Investment rentals, not a home |
One rule applies to every file in the table: a borrower is qualified on one path at a time. A lender will not blend the asset qualifier tables with the depletion tables. Your loan officer picks the path first, then builds the file around it.
How Does the Asset Qualifier Path Work?
The qualifier path treats your assets as the repayment source. If eligible assets, after the credit percentages below, equal or exceed the entire loan amount, the file is reviewed on assets alone. No employment or income is documented.
On this path, through select programs, the typical limits look like this, subject to underwriting:
- Leverage: up to 80% loan-to-value on a purchase and 75% on a refinance, for a principal residence or second home.
- Loan size: up to $4,000,000.
- Credit: a 600 minimum score, with a housing history that typically needs to be clean over the last twelve months.
- Reserves: none required at or below 75% loan-to-value. Above that, the lender sets them.
- Seasoning: 60 days of seasoning and two months of statements for each qualifying account.
Not every dollar counts at face value. Brokerage accounts, certificates of deposit, money market and savings balances count at 100%. Retirement balances count at 90% if you are under 59½ and at 100% at 59½ or older. Since RMDs begin well after 59½, your IRA or 401(k) typically counts in full on this path. Accounts combine.
Here is an illustration. Picture an $800,000 loan. The borrower has $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings. For a borrower under 59½, the 401(k) counts at 90%, which is $270,000. The total usable is $800,000, which equals the loan, so the file is reviewed on assets alone. A borrower past 59½ would count the 401(k) at 100% and clear the loan with room to spare. The lender’s own calculation governs, and the example is illustrative only.
The catch is scale. Your assets have to cover the whole loan, so this path suits a smaller loan against a large portfolio. Retirees who sold a home or a business often fit well.
How Does Asset Depletion Turn Balances Into Income?
Asset depletion converts your balances into a monthly income figure. The lender applies a haircut to each account, adds the usable amounts, and divides by 60 months. That number then has to carry the full housing payment and your other debts through the debt-to-income test.
The haircuts differ from the qualifier path. Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are not eligible.
Take $1,500,000 in securities, which counts at 80%, or $1,200,000. Add $300,000 in cash at 100%. Usable assets come to $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. If part of that portfolio sat in an IRA instead of a taxable account, that portion would count at 70%, so the usable total would be lower. Again, this is illustrative, and the lender’s own calculation governs.
The program limits on this path, through select programs and subject to underwriting:
- Leverage on a principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Leverage on an investment property: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Loan size: $125,000 to $3,500,000.
- Minimum assets: the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is your only income source.
- Credit: the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700.
- Statements: at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
Cash-out proceeds never count as qualifying assets. 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.
Can the RMD Itself Count as Income?
Yes. An RMD is the minimum amount the IRS requires you to withdraw from your retirement accounts each year. The IRS starts the clock at age 73 for IRAs and most plans, and a later start age of 75 applies to younger birth years. Because the withdrawal is mandatory, lenders that count it as income have an easy time with the question of whether it will continue.
There is no legal wall against retirement income. The CFPB’s ability-to-repay compliance guide says income does not have to come from full-time or salaried work. A creditor can consider retirement benefits and other sources, and it may also consider assets, including amounts vested in a retirement account. The rule asks for a good-faith review of your ability to repay. It does not ask for a paycheck.
Agency-style conventional loans can count RMD income, but the paperwork is heavier. Those guidelines generally want evidence that you currently receive the distribution. They also want documented retirement assets large enough to support that income for about three years. Fixed distributions need no long history under those rules. Variable distributions need a longer one. An RMD is a formula amount that changes each year, which is why the lender wants to see the balance behind it.
So why would anyone choose the asset paths? One reason stands out. A large RMD shrinks the balance that the three-year test relies on. Many retirees with large accounts find that the asset paths measure them more fairly than their income line does.
What Documents Will a Lender Ask For?
Expect statements first. On every path, assets are documented. The table shows what each item proves and where files tend to stall.
| Document | What it proves | Common snag |
|---|---|---|
| Account statements (two months) | Balances and ownership | A missing page or a page with no account holder name |
| Older statement (120 days, depletion path) | Funds were not just moved in | Newly opened accounts |
| Distribution statements | RMD amounts actually received | Net deposit differs from the gross amount |
| Year-end balance and RMD calculation | Where the required amount came from | Multiple accounts that do not match |
| Source of large deposits | Funds are your own | Transfers between your own accounts |
| Credit report | Score and housing history | A late payment inside the last twelve months |
Tax withholding creates the most common mismatch. Your bank deposit may be lower than the distribution on the statement because tax was withheld at the source. A lender looking at the deposit and a statement showing the gross amount will want the two reconciled. Bring both.
What If Your RMD Is Small, Variable, or Zero?
A small RMD does not end the conversation. It just means the income path is the wrong tool. These situations come up often.
Roth-only money. Roth IRAs have no required distributions during the owner’s lifetime, so a borrower with only Roth balances has no RMD income to document. The asset paths still read those balances.
Under the RMD age. Before the start age, any withdrawals are voluntary. The asset paths do not care about withdrawals at all.
Still working. Workplace plan participants can often delay RMDs until the year they retire, unless they are 5% owners. IRA owners cannot delay.
Variable amounts. The RMD changes yearly with the balance and the age factor. A lender counting the RMD as income will lean on the current year’s figure and the account behind it. An asset path sidesteps that.
Inherited IRAs. These follow different rules. The IRS says the entire balance generally has to be distributed within ten years for deaths after 2019, with exceptions for a surviving spouse, a minor child, a disabled or chronically ill person, and someone not more than ten years younger than the owner. That is not a lifetime RMD. Lenders may treat the account differently, so ask early.
Spouse more than ten years younger. A different IRS worksheet applies, and the required amount is smaller. If you rely on RMD income, confirm which figure your statements show.
Several accounts. On the asset paths, accounts combine, which helps. Under income-based rules, each account needs its own support.
Where Does a Rental Property Change the Answer?
Buying a rental changes the test. 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. Your RMD income is not the measure.
That matters for retirees because it avoids the income mismatch entirely. Credit, reserves and the property are still reviewed. Select programs also review a rent schedule from the appraisal. Some lenders will pull a personal guarantee or ask for supporting items to confirm liabilities, but those cross-checks do not turn your retirement income into the coverage figure. For a longer look at the difference, see the complete DSCR loans guide for the full mechanics.
There is also a trade-off. A DSCR loan adds a rent-coverage test and a reserve review instead of income documentation and a continuance test. Rent that comfortably covers the full monthly obligation is the goal. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust.
Note the difference in the asset-depletion limits above. On that path, an investment property carries lower leverage than a principal residence or second home: 65% on a purchase and 60% on a cash-out, against 80% and 60% for the primary home. A rental is often better served by the DSCR route.
What Goes Wrong on These Files?
Most problems are avoidable. The usual ones:
- Moving money at the wrong time. The qualifier path wants 60 days of seasoning. The depletion path wants statements at least 120 days old. A transfer into a new account can restart the clock.
- Counting assets that do not count. Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path. The documented route is converting them into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
- Assuming a big IRA is enough. Credit and the property still matter. The credit floor is real, and a recent late payment on housing can change the answer.
- Pulling funds out for the down payment. Cash-out proceeds never count as qualifying assets, and a withdrawal lowers the balance the lender is measuring.
- Mixing up the paths. A lender uses one set of percentages per file. Quoting the 90% qualifier figure on a depletion file leads to a bad surprise.
Tax treatment varies; consult a qualified professional before moving retirement funds.
Key Terms Defined
Required minimum distribution (RMD): the minimum amount the IRS requires you to withdraw from certain retirement accounts each year once you reach the starting age.
Asset qualifier path: a program where eligible assets must equal or exceed the entire loan, and no employment or income is documented.
Asset depletion path: a program that divides usable assets by 60 months to create monthly qualifying income, which then runs through a debt-to-income test.
Haircut: the share of an account’s balance a lender will not count, because the balance can fall or is hard to turn into cash.
Seasoning: the time your funds have to sit in an account before the lender will count them.
Continuance: proof that an income source will last, usually for about three years under agency-style rules.
DSCR (debt service coverage ratio): the property’s rent divided by its monthly payment, used to qualify a rental purchase.
Frequently Asked Questions
Can I get a mortgage if my only income is RMDs?
Usually, yes, subject to credit and underwriting. You can document the RMD as income under agency-style rules, or you can qualify on assets, either by covering the loan outright or by converting balances into monthly income. Which one fits depends on your balances, the loan size, and the property.
Do I have to keep taking withdrawals after the loan closes?
On the asset paths, no. The lender is measuring your balances, not a withdrawal pattern. RMDs are required by the IRS anyway once you reach the starting age, so you would take them regardless. If you rely on RMD income to qualify, the lender is relying on that continuing.
Does my IRA count at full value?
It depends on the path. On the asset qualifier path, retirement balances count at 100% once you are 59½ or older, and at 90% below that age. On the asset depletion path, retirement accounts count at 70% at any age. Both are subject to underwriting.
Can I add Social Security or a pension to RMD income?
Yes, under income-based rules, each source is documented and added together. On the asset depletion path, asset-derived income can also supplement documented income, up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does.
Does a DSCR loan look at my RMDs?
No. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your credit, reserves and the property are still reviewed. RMD deposits can show liquidity, but they do not qualify the loan.
What Should You Do Next?
Start with a statement review. Gather two months of statements for every account, the most recent distribution statements, and a credit report. Then ask which path fits: assets covering the loan, assets converted to income, or your RMD counted as income.
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 arranges consumer asset-based mortgages through select lenders in its network in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Request a quote at Lendmire’s quote page or call 828-256-2183.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
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. IRS: Retirement Plan and IRA Required Minimum Distributions FAQs
2. CFPB: Ability-to-Repay and Qualified Mortgage Rule 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: How to Qualify for an Assets-Only Mortgage · How Asset Qualifier Income Is Calculated for a Jumbo Mortgage · How an Assets-Only Loan Works
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.