The Quick Read: A Tennessee borrower with large savings and little documented income gets pre-approved by choosing one of two asset paths: assets that cover the entire loan outright, or assets that convert into a monthly qualifying income. The lender then reviews the statements, credit, property and leverage before issuing a letter, all subject to underwriting and select program guidelines.
- The asset qualifier path documents no employment or income, and eligible assets must equal or exceed the whole loan.
- The asset depletion path divides usable assets by 60 months to create income, which then runs through the debt-to-income test.
- A borrower is reviewed on one path at a time. The two never blend.
- The assets are always documented. Income is not documented on the qualifier path, but the file is not light.
- Program figures are the same in Tennessee as anywhere else. State facts are context, not program terms.
Picture a retiree selling a house in another state and moving to Tennessee. The brokerage account is large, the pension is small, and the pay stubs are gone. A conventional file reads that borrower poorly, because the income line is thin. Asset-based programs read the same file differently. This guide walks through how the mechanics work, which assets count, where the rules break, and what to have ready before you apply.
Lendmire is a mortgage broker. It arranges these consumer mortgages through select lenders in its network, and Tennessee is one of the 16 states where it handles consumer lending.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, must equal or exceed the entire loan amount, and no income is documented.
Asset depletion: A path that converts usable assets into monthly qualifying income by dividing them over 60 months.
Haircut: The share of an account balance the lender will not count, applied by asset type.
Seasoning: How long funds have sat in an account, shown by dated statements.
Usable assets: The balance left after the percentages for each asset type are applied.
Debt-to-income (DTI): Monthly debts, including the new housing payment, compared against monthly qualifying income.
How Does a Pre-Approval Work When You Qualify on Assets?
The pre-approval works by picking the path first and then sizing the loan to that path. Across the wholesale network, the path decides everything that follows: what counts, how leverage is set, and which documents the lender asks for.
Asset qualifier path. The lender adds up eligible assets after the credit percentages. If the total equals or exceeds the whole loan, the borrower is reviewed on assets alone. No employment or income is documented. This path is for principal residences and second homes. Loan amounts run up to $4,000,000, with leverage up to 80% on a purchase and 75% on a refinance, subject to underwriting. The credit floor is 600. No reserves are required at or below 75% loan-to-value. Above that, the lender sets them. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Asset depletion path. The lender takes usable assets and divides them by 60 months. The result is monthly qualifying income, and it has to carry the full housing payment and other debts through the debt-to-income test. Loan amounts run from $125,000 to $3,500,000. This path also covers investment property, where the leverage limits are lower. The credit requirement follows the lender’s score and loan-amount matrix.
Which path fits you? If your assets are large enough to cover the whole loan, the qualifier path is simpler. If your assets are large but fall short of the loan amount, depletion turns them into income. Borrowers with some documented income can also use depletion to supplement it, up to a 45% debt-to-income ratio.
Which Assets Count, and How Much of Each?
The percentages differ by path, so the two tables below stay separate. Programs vary by lender, and these are ceilings and floors, not offers.
Asset qualifier path (share of balance that counts):
| Asset | Counts at |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) and IRA, under 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Asset depletion path (share of balance that counts):
| Asset | Counts at |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Real-estate equity | 60% |
Accounts combine on both paths. The depletion path does not accept custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, or funds from non-regulated financial companies. Cash-out proceeds from a refinance never count as qualifying assets.
Cryptocurrency, precious metals, collectibles, pledged funds and borrowed funds are not published as eligible on either path. The documented route is to convert them to cash in a regulated account and let the balance season. The lender reviews where the money came from.
What Does the Math Look Like?
The math is a percentage on each account, then a sum, then either a comparison to the loan or a division by 60. These examples are illustrative, and the lender’s own calculation governs.
Qualifier example. A borrower wants an $800,000 loan. The borrower holds $330,000 in brokerage accounts, $300,000 in a 401(k) and is under 59½, and holds $200,000 in savings. The brokerage counts at 100%, or $330,000. The 401(k) counts at 90%, or $270,000. The savings count at 100%, or $200,000. Usable assets total $800,000, which matches the loan, so the borrower is reviewed on assets alone.
Depletion example. A borrower holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, or $1,200,000. Cash counts at 100%, or $300,000. Usable assets are $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 within the program’s debt-to-income test.
Notice what the depletion example does not do. It does not require you to sell anything. The assets stay where they are. The division is a measuring tool.
Where the Rule Breaks
The general rule is that big balances qualify. The exceptions below are where files stall.
Depletion minimums. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is the only income source, liquid assets must not fall below $250,000. If asset income only supplements documented income, the minimum-assets rule is waived.
Real-estate-heavy wealth. Equity counts at only 60% on the depletion path, and it is not listed on the qualifier path at all. A borrower whose net worth sits mostly in property often finds the usable total is far smaller than the headline number.
Retirement age. Under 59½, a 401(k) or IRA counts at 90% on the qualifier path. On the depletion path, retirement accounts count at 70% at any age.
Recent money movement. The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants statements 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, but the source is still reviewed.
Credit events. Housing history is reviewed at 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path. A first-time investor on the depletion path needs a 700 score.
Investment property. Only the depletion path covers investment property. Leverage is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting.
Cash-out on the qualifier path. Whether cash-out is allowed there, and at what leverage, is set by the lender and is not published. Do not plan around it.
How Is This Different From a DSCR Loan?
A DSCR loan is reviewed for the property, and an asset-based mortgage qualifies the borrower’s balances. Mixing them up wastes time.
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 Reg Z business-purpose exemption is why that separate review exists, and the rulemaking notice treats investment-purpose loans as business-purpose credit.
The asset-based programs here are consumer mortgages. TRID disclosures apply to them, which is not the case for DSCR loans. The lender still reviews ability to repay, and that review rests on your assets.
A property with strong rent and a borrower with a thin file points toward DSCR. A borrower with deep savings, thin documented income and a primary residence or second home points toward the asset paths. A borrower who wants a rental and has strong assets sometimes fits both.
The Step-by-Step Process
The process runs in a set order, and skipping steps causes the usual delays.
1. Pick the path. Add your balances using the qualifier percentages first. If the total reaches the full loan, that path is available. If not, run the depletion math.
2. Pull statements. Gather every account you plan to count. Check that each one is old enough for the path you picked.
3. Check credit. Confirm your score against the path’s floor and review your housing history for late payments or events.
4. Choose the property and leverage. Principal residence, second home or investment property each carry different leverage on the depletion path.
5. Submit the file. The broker places it with a lender whose guidelines match your assets and loan size.
6. Underwriting review. The lender checks the assets, the source of any large deposits, credit and the property. Everything is subject to underwriting.
7. Receive the pre-approval. The letter states the loan amount and the conditions attached to it.
What Documents Should You Have Ready?
Clean statements are the file. Bring:
- Two months of statements for every account on the qualifier path.
- Statements at least 120 days old plus one within 45 days on the depletion path.
- An explanation and paper trail for any large deposit.
- Proof of ownership share on any joint or business account.
- Identification and a credit authorization.
- Documents for sale-of-business, inheritance or settlement funds, if those are in play.
On the qualifier path, no income documents are collected. That is not the same as no documentation, because the assets are documented on both paths.
How Does the Pre-Approval Letter Read to a Seller?
A pre-approval is a lender’s written review of your file for a loan amount, and it is stronger than a basic prequalification. A seller’s agent in Tennessee will read the letter the same way regardless of how you qualified, so the number on it and the conditions attached to it matter most. Have your statements current so the underwriting conditions are short.
Tennessee does not change the program figures. Leverage, credit percentages and seasoning are the same in any state where the program is available. State facts such as local prices or insurance affect your budget, not your qualification.
Common Mistakes
- Counting total assets instead of usable assets after the percentages.
- Moving money between accounts right before applying, which resets the seasoning clock.
- Assuming crypto or collectibles count. They do not, until converted and seasoned as cash.
- Applying the purchase leverage to a cash-out refinance. On the depletion path, cash-out is 60%.
- Blending the qualifier and depletion tables in one calculation.
- Treating no income documentation as no paperwork.
Tax treatment varies; consult a qualified professional, especially before drawing on retirement accounts.
How Do You Strengthen a Thin File?
Start with the weakest link. If the usable total falls short, the options are limited and honest ones.
Season more cash. Moving funds into a regulated cash account and letting it sit improves the file on both paths. Assets such as crypto are not published as eligible, so convert them to cash early and let the seasoning clock run. Lower the loan amount or raise the down payment, since lower leverage helps on either path. If you have some documented income, look at the depletion path’s supplement option up to 45% debt-to-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.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. On the depletion path, the division is a calculation, not a sale. On the qualifier path, the assets are counted and documented but not liquidated. Keep in mind that the down payment still has to come from somewhere, so plan for that separately.
Can I use a 401(k) or IRA?
Yes, subject to the path. On the qualifier path, they count at 90% under 59½ and 100% at 59½ or older. The lender reviews the statements like any other account.
Does crypto count as an asset?
Not directly. It is not published as eligible on either path. The documented route is to convert it to cash in a regulated account, let it season, and have the lender review the source.
Can I buy an investment property this way?
Yes, on the depletion path only. A first-time investor needs a 700 score. Investors who want the property to qualify on its own rent should look at DSCR loans instead.
Does Tennessee change any of the numbers?
No. The program figures are the same in every state where Lendmire arranges them. Local prices, insurance and property costs affect your budget, but not the credit percentages, seasoning or leverage caps.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee 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. CFPB Regulation Z §1026.3, exempt transactions
2. Federal Register, Ability-to-Repay and Qualified Mortgage Standards
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 Relocate to Washington and Buy a Home on Assets Before You Have Local Income? · Can a Tennessee Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can You Refinance a Colorado Home on Assets When Your Income Stops?
Guides: Asset-Based Mortgage in Tennessee
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.