How Much a HELOC Lender Counts From Your Investment Accounts

The Quick Read: There is no single percentage. Each lender decides how much of a brokerage or retirement balance it counts, and cash is counted most fully while retirement money is discounted most. Your accounts stay invested, because the lender is running a qualifying calculation and not asking you to sell.

• Cash counts closest to full value, brokerage accounts are often discounted, and retirement accounts are discounted most, especially under age 59½.
• Home equity, business funds, borrowed money and unexplained deposits generally do not count.
• Money committed to the down payment, closing costs and reserves comes out before anything else is counted.
• On the investment-property lines in Lendmire’s network, the debt-to-income test runs on the interest-only payment at the maximum draw.
• Get the lender to state in writing what percentage it will count before you rely on any balance.

Key Terms Defined

Haircut: the discount a lender applies to an account’s balance to reflect market swings and withdrawal costs. A balance counted at a haircut is worth less to the lender than the statement shows.

Asset-based qualification: a method where a lender turns a verified account balance into imputed income. Assets stay invested.

Imputed income: a monthly figure the lender calculates from your balances rather than from a paycheck or tax return.

Depletion period: the number of months the lender divides your counted balance by. A shorter period produces more imputed income and a longer one produces less.

Reserves: liquid money left over after closing that shows you can keep paying if rent stops.

Debt-to-income (DTI): your monthly debts divided by your monthly income. Lower is better.

Seasoning: how long money has sat in an account. Recently moved funds are harder for an underwriter to trace.

What Does “Counting” an Account Actually Mean?

A lender uses your investment accounts in two separate ways, and mixing them up causes most of the confusion. The first is income: the lender converts a balance into imputed monthly income to help you pass the DTI test. The second is reserves: the lender checks that you hold enough liquid cash after closing.

The same dollars generally cannot do both jobs. Money counted toward income is typically not also counted as the cushion that sits behind the loan. Ask the lender which job each account is being asked to do.

A line of credit on a rental is underwritten on your personal profile. A DSCR loan, by contrast, qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. If you want to buy or refinance a rental, the complete DSCR loans guide explains why personal balances matter much less on that path.

How Much Counts, Account by Account

Across the lenders we work with, the pattern is consistent even when the numbers are not. Treatment follows a liquidity ladder: the easier it is to turn an asset into cash without a penalty, the more of it counts.

Notice what the table leaves out: a single percentage. Any figure you see online reflects one lender’s convention. We see many lenders’ guidelines, and the same portfolio can produce very different qualifying income depending on who reviews it.

Why Retirement Money Gets the Biggest Discount

Retirement balances are discounted because getting the money out costs something. The IRS says early distributions from a traditional or Roth IRA before age 59½ generally carry a 10% additional tax on top of regular income tax, unless an exception applies (IRS Topic 557), so borrowers should speak with a qualified tax professional before relying on any retirement withdrawal.

That is why age 59½ is the usual breakpoint in lender policies. Under it, many lenders count retirement accounts at a steeper discount, or not at all. Lenders generally do not model the exceptions, so ask whether a given program does.

One related trap. Pledging an IRA as security for a loan is not a workaround, because it can be treated as a distribution. These programs count the balance as a qualifying figure and do not take a pledge on the account.

How Underwriting Treats Your Accounts, Step by Step

The sequence below is how asset-based underwriting generally works. Whether a given line accepts asset-derived income at all is a separate question, so confirm that before you apply.

1. Inventory the accounts. Checking, savings, brokerage and retirement accounts are the usual candidates. Expect statements for every account the lender relies on.

2. Apply the haircut. Securities and retirement accounts are discounted by asset type, and retirement discounts often step up under 59½.

3. Subtract money committed to the deal. The down payment, closing costs and any required reserves come out first. Counting the same dollars twice is a common mistake.

4. Divide by the depletion period. This divisor is the biggest swing factor in the whole calculation.

5. Run the income through the DTI test. On the lines in our network the test is run on the interest-only payment calculated on the maximum draw, not the amount you plan to borrow. Maximum DTI is 50%, and 45% for credit profiles from 600 to 679.

6. Document and season the money. Large deposits you cannot explain are excluded. Transfers between your own accounts are commonly excluded as income too.

Here is the logic in plain terms. Take the statement balance, apply the lender’s discount, subtract what you are committing to the deal, and divide what is left by the lender’s depletion period. The result is monthly imputed income. Change any one of the inputs and the answer moves.

Now run a stress test. If your portfolio drops 15% between application and underwriting, the counted balance drops by roughly that much before the discount even applies. Lenders generally rely on the most recent statements, so a falling market can shrink your qualifying income mid-file. Build in a cushion.

What Never Counts (or Barely Counts)

The excluded list is short but it trips people up.

• Home equity. Equity in the subject property does not count as an asset, and neither does equity in your other real estate.
• Business funds. Money in a business account is generally not treated as your personal liquid asset.
• Borrowed money. Funds from a margin loan or another line are generally not counted as your own cash.
• Unexplained or just-moved deposits. If the underwriter cannot trace it, it is out.
• Undrawn line availability. An unused credit line is generally not cash on hand.

Dividends and interest are a different story from asset depletion. Qualifying on the income your portfolio pays is one method, and counting the portfolio itself over a set number of months is another. Know which one your lender is using.

Can HELOC Cash Count as Reserves?

Treatment is lender-specific and scrutinized case by case. Investors disagree. One investor on BiggerPockets says HELOC proceeds can serve as reserves if the cash sits in an account for a few months, while another points to the problem of using HELOC money for reserves immediately. Those are individual opinions, not underwriting rules.

Our read is simpler. Money drawn from a line looks like borrowed funds, and seasoning is how you separate it from a last-minute transfer. If reserves matter to your file, see Lendmire’s piece How Much Equity and Reserves a Rental HELOC Lender Expects.

For contrast only, Fannie Mae’s published guidance says vested retirement funds can be used for reserves without withdrawing them (Fannie Mae FAQ). That is a conventional-mortgage rule. Home equity lines and DSCR programs set their own treatment, so do not assume it carries over.

Where the General Rule Breaks

Terminology. Some lenders will not use the word HELOC on a non-owner-occupied property even when they offer a similar product. Asking for a line of credit secured by an investment property can get you a different answer.

Occupancy tiers. Ceilings in our network depend on the property type. On an investment property the line tops out at 70% combined loan-to-value (CLTV), with a 700 minimum credit score and a maximum line of $500,000. On a primary residence or second home the ceiling can reach 90% CLTV, but only at a 720-or-better credit profile. Do not read a primary-residence figure onto a rental.

Title. The line must be held by you personally or by a revocable living trust. An LLC cannot hold title, which is the sharpest structural difference from a DSCR loan. A rental already deeded to an LLC needs a vesting change or a DSCR cash-out instead.

Property type. Single-family, 2-4 unit, PUD, townhome and condominium properties are eligible. Manufactured homes, co-ops, condotels, log homes, commercial and mixed-use properties are not.

Geography. Home equity lines are available only in Lendmire’s 16 full-service states, which is narrower than the 41-market DSCR footprint.

Draw structure. Investment lines run a 5-year interest-only draw followed by a 25-year repayment. At least 75% of the line is drawn at closing, and the payment floats rather than converting to fixed.

Is Counting Your Accounts the Right Path?

Often it is not. A working-age investor with big balances and thin reportable income can look stronger through assets than through traditional personal-income documentation, but the result swings with the program. Shopping across lenders matters more than any one typical percentage.

If the target is a rental purchase or refinance, run the rent through a DSCR file first. The strongest files clear both tests: enough equity and enough rental coverage.

One caution. Clearing 1.00 on a DSCR file is not the same as positive cash flow. Repairs, vacancy, management and utilities sit outside the calculation.

Questions to Ask Before You Apply

Use these with any lender. Get the answers in writing.

• Do you accept asset-derived income on this line, or only for reserves?
• What percentage of brokerage and retirement balances do you count, and does age change it?
• What depletion period do you divide by?
• Do you subtract the down payment, closing costs and reserves first?
• How many months of statements do you need, and how do you treat recent transfers?
• Is the DTI test run on the maximum-draw interest-only payment?
• Do you treat undrawn credit lines or HELOC cash as reserves?

If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. All figures are subject to lender guidelines and full file review.

The percentage a lender prints on its website matters less than the one it puts in writing for your file.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage broker. Home equity lines of credit — on a primary residence, a second home or an investment property — are arranged through wholesale lenders in Lendmire’s 16 full-service states, and every line is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. IRS Topic 557: Tax on Early Distributions From Traditional and Roth IRAs

2. BiggerPockets: Using a HELOC to Buy an Investment Property

3. Fannie Mae: Top Trending Selling FAQs