The Quick Read: Qualifying means choosing one of two asset paths, documenting every account with statements, and confirming how much of a six-month cushion the lender wants held back. Then you size the cash-out inside the leverage ceiling that path allows, through select programs and subject to underwriting.
- Asset qualifier path: eligible assets, after the credit percentages, must equal or exceed the entire loan. No employment or income is documented.
- Asset depletion path: usable assets are divided by 60 months into a qualifying income, which then runs through the debt-to-income test.
- Six months of reserves is a lender-set cushion, not a published program figure. On the qualifier path, no reserves are required at or below 75% loan-to-value on a refinance.
- Cash-out proceeds never count as qualifying assets.
Key Terms Defined
Asset-based mortgage: a consumer mortgage on a principal residence or second home, qualified on documented assets instead of documented income. The depletion path also reaches investment property.
Asset qualifier path: assets alone cover the whole loan amount.
Asset depletion path: usable assets divided by 60 months become monthly qualifying income.
Reserves: liquid funds left after closing, counted in months of the full housing payment (principal, interest, taxes, insurance and any association dues).
Seasoning: the time funds have sat in an account, shown by statements.
Haircut: the part of a balance that does not count. If securities count at 80%, the haircut is 20%.
What This Loan Is and Who It Fits
An asset-based cash-out refinance fits a borrower with large balances and little documented income. Think of a retiree living off a portfolio, someone who sold a business, an heir, or a professional who retired early. A file like that can look thin on a pay-stub review and strong on a statement review.
Lendmire’s asset-based mortgage programs are placed through select lenders in its wholesale network. The brokerage arranges the loan. The lender underwrites and approves it. Every file is fully underwritten. The borrower skips traditional personal-income documentation, pay stubs and employment verification, but the assets are documented with statements.
Consumer mortgage lending for this program is licensed in 16 states, listed in the FAQ below.
Which Path Are You On?
A borrower is qualified on one path at a time. Never blend the figures from the two paths. Pick the path first, then read the figures that belong to it.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Cover the whole loan | Convert to monthly income |
| Income documented | None | Derived, runs through DTI |
| Refinance leverage | Up to 75% (principal or second home) | 60% cash-out, any occupancy |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
| Statements | 60 days, two months per account | 120 days old, plus one within 45 days |
Qualifier-path leverage is up to 75% loan-to-value on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on that path, and at what leverage, is set by the lender. It is not published, so confirm it before you plan around it.
The depletion path publishes a cash-out ceiling of 60% loan-to-value on a principal residence, a second home or an investment property. That is the clearest cash-out number in the program. The same path allows up to 80% on a rate-and-term refinance of a principal residence or second home, and up to 65% on a rate-and-term refinance of an investment property. Those are not cash-out figures.
What Six Months of Reserves Means Here
Six months of reserves means six times the full monthly housing payment, held in liquid funds after closing. Take the principal, interest, taxes, insurance and dues, then multiply by six. That is the whole calculation.
Here is the catch. The program does not publish a six-month figure. On the depletion path, no reserve months are published. So six months is usually a lender’s request on a specific file, or a cushion the borrower chooses to hold.
Two separate questions come up on most files:
- Does the lender want reserves in addition to the balances that qualify the loan?
- Is the cushion counted from existing accounts only?
Ask both before the file is built. Cash-out proceeds never count as qualifying assets, and borrowed or pledged funds do not count either. Do not plan to meet the cushion with the money the refinance itself produces.
How Assets Are Counted
Each account type counts at a set share of its balance. Here is how the qualifier path treats them, subject to underwriting:
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
An illustrative case on the qualifier path: an $800,000 loan with $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) under 59½ (90% counts, so $270,000) and $200,000 in savings (100% counts, so $200,000). That adds up to $800,000 of usable assets, which is reviewed on assets alone. The lender’s own calculation governs.
The depletion path is stricter:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Here is the depletion example. $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100% counts) is $1,500,000 usable. 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.
On the depletion path, these are not eligible:
- Custodial accounts
- Deferred compensation
- Escrow accounts
- Foreign funds
- Cash on hand
- Stock options
- Non-vested restricted stock units
- Funds from non-regulated financial companies
Privately held company stock is not an eligible asset on either path. A founder or shareholder qualifies through documented liquid assets instead. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages above.
Cryptocurrency, precious metals, collectibles, pledged funds and business accounts beyond the borrower’s ownership share are not published as eligible on either path. The documented route is to convert them to cash in a regulated account. The lender then reviews the source of those funds.
Eligibility Gates Beyond the Balances
Credit sets the next gate. The qualifier path starts at a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700. Housing history is 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.
The depletion path also carries minimum assets. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is the only income source. Asset-derived income may also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Seasoning is the quiet killer here. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. A large transfer made last month into a brand-new account will draw a source-of-funds request. On the depletion path, statements must be 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.
Applying, Step by Step
1. Pick the path. Ask whether assets can cover the whole loan (qualifier) or whether they have to become income (depletion). Cash-out on a rental points to the depletion path. A principal residence or second home can use either, subject to the lender.
2. Pull statements for every account. Include account holder names, balances and full pages. Two months per account for the qualifier path. For the depletion path, include one statement at least 120 days old and one within 45 days.
3. Run the count. Apply the percentages above to each balance. Compare the total with the loan amount (qualifier) or divide by 60 and test the income (depletion).
4. Check the leverage. Compare the cash-out you want with the ceiling for your path and occupancy. If the figure is above the ceiling, the options are less cash or a different structure.
5. Settle the cushion question. Ask whether the lender wants six months of housing payments held separately. Show those funds on their own statements.
6. Submit the file. The broker packages credit, statements, a property description and a payoff statement for the existing loan. The lender reviews it, orders the appraisal and underwrites.
7. Reconcile the settlement. The existing loan and costs come out of the new loan first. Net cash is what remains, so do not size a project against the gross figure.
Where Files Stall
Unseasoned deposits. Money moved in recently, without a source, does not count until it is documented. Move funds well before applying.
The wrong path. Borrowers pick the qualifier path with balances that fall short of the full loan. They would have fit the depletion path, with its lower leverage but income-based test.
Cash-out assumed on the qualifier path. The published leverage there is for purchase and refinance. Cash-out is set by the lender, so ask before you plan.
Thin balances after haircuts. A large retirement balance counts at 70% on the depletion path. The haircut is the 30% that does not count, and that gap is what shrinks the income.
Investment property. Only the depletion path covers it, at up to 60% loan-to-value on a cash-out. Because it is a rental, the loan is business-purpose. Federal rules treat credit to acquire, improve or maintain non-owner-occupied rental property as business purpose, and a trade-association compliance note cautions that business-purpose treatment is not uniform across rules. The lender sets the classification on each file. Small residential income properties are appraised on Fannie Mae’s Form 1025, which is only a form name here and not a program rule.
Owner-occupancy mix-ups. A loan that starts as a rental and shifts to personal use changes the file. Disclose the planned use up front.
Is This the Right Path?
Use it when balances are large, income is light and documented, and the cash-out ceiling covers the need. Skip it when income is strong and documented. A full-documentation loan will then usually carry fewer asset conditions.
Other routes sit nearby. A borrower who documents income through deposits belongs in a bank statement cash-out refinance. A rental owner who wants the property’s own income to carry the loan should look at a DSCR cash-out with six months of reserves. A HELOC is a separate product with its own rules.
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
Is six months of reserves a program requirement?
It is not a published program figure. On the qualifier path, no reserves are required at or below 75% loan-to-value on a refinance, and above that the lender sets them. The depletion path publishes no reserve months. A lender can still ask for six months of housing payments on a specific file, so confirm before you submit.
Can cash-out proceeds count toward reserves or qualifying assets?
No. Cash-out proceeds never count as qualifying assets on the depletion path, and borrowed or pledged funds are not eligible on either path. Plan the cushion from accounts you already hold, seasoned and documented.
Does an asset-based loan mean no documentation?
No. It means no traditional personal-income documentation, pay stubs or employment verification on the qualifier path. Every file is fully underwritten, and the assets are documented with statements.
Can I use my retirement account?
Yes, at a reduced share. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Where is the program available?
Consumer mortgage lending for this program is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs change, and every file is underwritten individually. Nothing here is a commitment to lend.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB, Regulation Z § 1026.3
2. ABA Banking Journal, compliance Q&A
3. Fannie Mae Selling & Servicing Guide Forms
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Asset-Based Cash-Out Refinance Program Before Six Months on Title · Best Asset-Based Cash-Out Refinance Program Using a Brokerage Account to Qualify · Asset-Based Cash-Out Refinance Requirements on a Primary Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.