The Quick Read: To get pre-approved in Michigan on assets instead of income, you choose one of two paths: the asset qualifier path, where eligible assets cover the entire loan and no employment or income is documented, or the asset depletion path, where usable assets are divided by 60 months into qualifying income, subject to underwriting. Either way, the assets are documented line by line. The program figures below are the same for a Michigan borrower as for anyone else, and they are ceilings and floors, never offers.
- Asset qualifier path: eligible assets, after the credit percentages, must equal or exceed the whole loan. Loans run up to $4,000,000 through select programs.
- Asset depletion path: usable assets divided by 60 months become monthly income, which then runs through a debt-to-income test. Loans run from $125,000 to $3,500,000.
- Seasoning: 60 days and two months of statements per account on the qualifier path. On the depletion path, statements 120 days old plus one within 45 days.
- Credit: a 600 minimum score on the qualifier path. The depletion path follows the lender’s matrix.
- Property: the qualifier path covers principal residences and second homes. Investment property is available only on the depletion path, at lower leverage.
What Does “Pre-Approved on Assets” Actually Mean?
A pre-approval on assets means a lender has reviewed your credit and your account statements and agreed, subject to underwriting, to lend up to a stated amount. The difference from a paycheck-based file is what carries the loan. Your balances do the work that a W-2 or tax return usually does.
It is not undocumented lending. Across the wholesale network Lendmire works with, every asset-based file still needs statements, proof of ownership, a credit report, and a review of where large deposits came from. “No income documentation” never turns into “no documentation.”
Who fits? The profile is a cash-heavy, income-light borrower. Think of a retiree, someone who just sold a business, a person who received an inheritance or settlement, an early-retired professional, or a household living off a portfolio. Balances are large. Documented income is small or hard to explain on a standard form.
Lendmire is a mortgage broker. It arranges these loans through select lenders in its network, and consumer mortgage lending is licensed in 16 states, Michigan among them. The lender does the underwriting and makes the decision.
The Two Paths: Which One Fits You?
The first question is whether your assets should cover the loan outright or become income. A borrower is qualified on one path at a time, and the two never blend. Most files lean one way fast.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Core test | Assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived income, run through DTI |
| Max loan | $4,000,000 | $125,000 to $3,500,000 |
| Property types | Primary residence, second home | Primary, second home, investment |
| Purchase leverage | Up to 80% | Up to 80% (65% on investment) |
| Credit | 600 minimum | Lender’s matrix |
All figures are typical ceilings and floors through select programs, subject to underwriting.
The qualifier path suits the borrower whose liquid assets are at least as large as the loan. It has no income calculation and no debt-to-income test. The lender’s ability-to-repay review rests on the assets themselves.
The depletion path suits the borrower whose assets are large but smaller than the loan, or who wants to buy an investment property. It turns the balance into a monthly income figure. That income has to carry the housing payment and other debts.
If your assets fall short of the loan amount on the qualifier path, the depletion path is the usual next look. If your income is documentable and the assets would only add to it, the depletion path can also supplement that income. That use is covered below.
How Do Assets Count on the Asset Qualifier Path?
On the qualifier path, each account counts at a percentage of its balance. The usable total must equal or exceed the whole loan amount. Accounts combine, so you can add them together.
| Asset type | Share that counts |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Here is an illustrative example, not a quote. Take an $800,000 loan. The borrower holds $330,000 in brokerage accounts (100%, so $330,000 counts). There is $300,000 in a 401(k) at an age under 59½ (90%, so $270,000 counts). And there is $200,000 in savings (100%, so $200,000 counts). That totals $800,000 of usable assets, which matches the loan, so the file is reviewed on assets alone. The lender’s own calculation governs.
Leverage on this path goes up to 80% on a purchase and 75% on a refinance, for a principal residence or second home. Whether cash-out proceeds are allowed, and at what leverage, is set by the lender and is not published. Do not plan around a cash-out figure on this path.
Reserves follow a simple rule. None are required at or below 75% loan-to-value. Above that, the lender sets them.
How Does the Asset Depletion Path Work?
On the depletion path, the lender discounts each account by type, adds the usable totals, and divides by 60 months. The result is monthly qualifying income. That income carries the full housing payment and other debts through the debt-to-income test. The assets stay in your accounts and are not sold.
| Asset type | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
The haircuts reflect how easily each asset converts to cash. Retirement balances count at 70% at any age on this path, which is lower than the qualifier path’s 90% to 100%. That difference alone can decide which path a retiree should use.
An illustrative example follows, and the lender’s calculation governs. Say you hold $1,500,000 in securities (80%, so $1,200,000 counts) and $300,000 in cash (100%, so $300,000 counts). Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
Three minimums apply on this path. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. Liquid assets can never fall below $250,000 when depletion is your only income source. And a first-time investor needs a 700 score.
Leverage on the depletion path varies by property.
- Principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Investment property: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
Cash-out proceeds never count as qualifying assets.
Asset income can also supplement documented income, up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived. That helps a retiree who has a pension and Social Security but wants the portfolio to close the gap.
What Does Not Count?
Some asset types do not count at all on the depletion path. These include 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.
Other classes are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds. Do not assume any of them count at a percentage.
The documented route for these holdings is to convert them to cash. Move the proceeds into a seasoned balance in a regulated account. The lender then reviews the source. If you hold a lot of crypto, start the conversion early, because seasoning is a clock you cannot shorten.
Borrowed money is the clearest no. A loan against your portfolio that lands in your checking account is borrowed funds, not your assets.
Step by Step: From First Conversation to Pre-Approval
The process follows the same order for most borrowers. Here is how a file moves through the network.
1. Pick the path. Compare total eligible assets with your target loan and property type. A broker can run both paths against your statements before you commit.
2. Gather statements. Collect every account you want counted, in your name, with full pages.
3. Check seasoning. Confirm each account meets the path’s window (explained below).
4. Run credit. The lender reviews your credit report and housing history. The score floor, and whether it is a soft or hard pull at the pre-approval stage, depends on the lender.
5. Size the approval. The lender sets a maximum loan amount from the strongest supported calculation, subject to underwriting.
6. Move to a contract. After you have a property, the appraisal, title and insurance reviews follow.
Pre-approval is a lender’s review of your file, not a commitment to lend. How long a letter stays valid varies by lender. Ask for the specific terms in writing.
Seasoning and Sourcing: Where Files Stall
Seasoning rules differ by path, so keep them separate.
- Qualifier path: 60 days of seasoning, with two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days.
On the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from that seasoning. That helps a borrower whose money arrived recently. The lender will still ask for the paper trail, such as a closing statement, estate distribution or settlement letter.
For other large deposits, expect questions. A transfer between your own accounts is easy to show with both statements. A gift or an unexplained wire is not. The lender is looking for deposits it cannot source, names that do not match, and the same money counted twice.
The practical rule is simple. Once you apply, keep moving money to a minimum. Every transfer creates another page to explain.
Documents to Gather
Asset borrowers need a different list from the W-2 and pay-stub stack most pre-approval pages list. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
- Full statements for every counted account, every page
- Proof the accounts are in your name (statements usually show this)
- A letter or closing paper for any large deposit, such as a business sale or inheritance
- Government ID and a credit authorization
- Property details once you have a contract
On the qualifier path, no employment or income paperwork is requested. On the depletion path, the lender may ask for income documents only if you are blending documented income with asset income.
Retirement Accounts and Tax Questions
Retirement balances are usable on both paths, at different percentages. The qualifier path counts them at 90% under age 59½ and 100% at 59½ or older. The depletion path counts them at 70% at any age.
You do not have to withdraw the money to use it. The lender counts the balance and the account stays intact. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Common Mistakes That Derail Asset-Based Files
- Mixing the paths. A borrower reads the qualifier path’s percentages and the depletion path’s leverage and builds a plan that exists in neither. Name the path every time.
- Counting what does not count. Crypto, collectibles, and borrowed funds are not published as eligible.
- Moving money after applying. Shifting funds resets seasoning and creates questions.
- Ignoring the loan-size floor on the depletion path. Loans start at $125,000 there, and the asset minimums are real.
- Assuming the approval is a promise. Balances can drop between pre-approval and closing. A market decline in a securities account lowers the usable total. Keep a cushion above the minimum you need.
When an Asset-Based Mortgage Is the Wrong Tool
An asset-based mortgage is not always the best fit. These alternatives are worth a look.
If your documented income is strong, a standard income-based loan may be simpler. If you earn income through deposits, such as a self-employed owner, a bank statement program documents that income instead. If you are buying a rental, you may not need personal income at all.
That last case matters most for investors. 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. The Federal Register notice on ability-to-repay standards says investment-purpose loans are treated as business-purpose loans. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
The line between the two is occupancy and purpose. A CFPB summary of the Truth in Lending exemptions lists rental property among the factors for the business-purpose exemption. A law firm explainer on the business-purpose exemption describes a 14-day occupancy test. If you expect to live in the property, or the stated purpose is personal, it is a consumer loan. That is where the asset-based programs above apply, and consumer disclosure rules apply to them.
So the choice often comes down to intent. If you plan to live in the home, or use it as a second home, the asset-based mortgage is built for you. If you plan to rent it out, look at the property’s income first. Lendmire’s complete DSCR loans guide covers how that works. If you want to see how asset qualifying plays out on larger loans, Lendmire’s walkthrough of qualifying on assets for a jumbo loan goes deeper.
The investor in a Michigan rental should still read the depletion path’s numbers. It is the only asset-based route for investment property, and the 65% purchase leverage is the price of using it.
Questions to Ask Any Lender
- Which path is my file on, and why?
- How does each of my accounts count, and at what percentage?
- When do my statements meet the seasoning window?
- What happens if my balances fall before closing?
- Are the loan limits and leverage you quoted subject to my property type?
A good broker answers these from the guidelines in front of them, not from memory.
Key Terms Defined
Asset qualifier path: A program path where eligible assets, after credit percentages, must equal or exceed the entire loan, with no income documented.
Asset depletion path: A program path that divides usable assets by 60 months into monthly income, then tests that income against the debt-to-income limit.
Usable assets: The share of each account balance that the program counts after applying its percentages.
Seasoning: The length of time money has sat in an account before it counts toward qualifying.
Debt-to-income (DTI): The share of monthly income that goes to housing and other debts.
Haircut: The discount a program applies to an asset type, such as counting securities at 80% of value.
Frequently Asked Questions
Do I have to sell my investments to use them?
No. The lender counts the balance and your accounts stay as they are. You document the assets, you do not liquidate them. Cash-out proceeds from the new loan never count as qualifying assets on the depletion path.
Is this the same as a loan with no income verification?
No. Assets are verified line by line, and a credit review still applies. What changes is that no personal income needs to be documented on the qualifier path. The depletion path converts the assets into income and tests it, so the lender still runs a full debt-to-income review.
Can I buy a rental property with assets instead of income?
Yes, but only on the asset depletion path, which allows investment property at up to 65% on a purchase and 60% on a cash-out refinance. A first-time investor needs a 700 score. For many rental buyers, a DSCR loan that is reviewed on the property’s rental income is the better fit, subject to lender guidelines.
What if my portfolio drops before I close?
Usable assets are recalculated from current statements, so a drop can lower your approved amount. This is the main risk for securities-heavy files. Keep a margin above the minimum you need, and avoid moving money while the file is open.
Can I use gift funds or borrowed money?
No. Pledged or borrowed funds are not published as eligible on either path. Gift funds are not listed as eligible either, so ask your broker how a specific gift would be handled before counting on it.
Your 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. Call 828-256-2183 or request a quote. Qualification is subject to lender guidelines and underwriting, and nothing here is a commitment to lend.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Federal Register: Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act
2. CFPB: Truth in Lending Act summary
3. Doss Law: Business Purpose Exemption Simplified
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 Asset Depletion Income Is Calculated From Your Portfolio · Asset Depletion vs Trust Income Documentation for a Beneficiary · Asset Depletion Income Formula and Haircuts
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.