The Quick Read: Yes, through select asset-based programs, an Indiana buyer can qualify on IRA balances without withdrawing a dollar, because the lender counts the statement balance as evidence of assets or converts it into calculated income while the money stays invested, and the loan is secured by the property rather than the account. Every file is fully underwritten, and the assets are documented with statements. Nothing here is a commitment to lend, and terms are subject to underwriting.
- The asset qualifier path counts a 401(k) or IRA at 90% under age 59½ and 100% at 59½ or older, with no traditional personal-income documentation, pay stubs or employment verification.
- The asset depletion path counts retirement accounts at 70% at any age and divides the usable total by 60 months to create qualifying income.
- Pledging an IRA as collateral is a different act and is not how these loans work.
- Money moved out of the IRA for a down payment is a real distribution. Money counted for qualifying is not.
What Does Qualifying on IRA Assets Actually Mean?
It means the lender treats your vested retirement balance as proof you can repay, instead of asking for a paycheck. It is a qualifying method, not a separate kind of property loan. The IRA stays where it is, in your name, at your custodian.
This fits a specific borrower. Think of a retiree living on a portfolio, someone who just sold a business, an early-retired professional, or a household that received an inheritance or settlement. Balances are large. Documented income is small. Traditional underwriting reads that file as weak, even though the borrower has plenty of money.
The programs described here are placed by Lendmire, a mortgage broker, through select lenders in its network. They are consumer mortgages on a principal residence or second home. Investment property is eligible only on the depletion path, where the loan is business-purpose. Indiana is one of the 16 states where Lendmire’s consumer mortgage lending is licensed, and the figures below are the same for an Indiana borrower as for any other. State taxes and local prices are context, never program terms. You can see the full lineup on the asset-based mortgage programs page.
Which Path Fits: Assets as the Loan, or Assets as Income?
Pick the asset qualifier path if your eligible assets can cover the entire loan amount. Pick the asset depletion path if your assets are large but fall short of the loan, or if you want the property on an investment basis. A borrower is qualified on one path at a time, and the two tables never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How it works | Assets must equal or exceed the whole loan | Assets become monthly income |
| Income documented | None | Derived from assets |
| Retirement credit | 90% under 59½; 100% at 59½+ | 70% at any age |
| Purchase leverage | Up to 80% | Up to 80% (65% investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
All figures are ceilings and floors through select programs, subject to underwriting. They are not offers.
How Does an IRA Balance Count on Each Path?
On the qualifier path, the IRA counts for most of its balance, and sometimes all of it. Brokerage accounts, CDs, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Here is an illustrative example. A borrower wants an $800,000 loan. They hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100% counts, so $200,000). That is $800,000 of usable assets against an $800,000 loan, so the file is reviewed on assets alone. The lender’s own calculation governs.
On the depletion path, the treatment is harsher for retirement money. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. The usable total is divided by 60 months. That result is your monthly qualifying income, and it must carry the housing payment and other debts through the debt-to-income test.
A second illustration: $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. Retirement balances run through the same steps at their 70% credit.
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.
Not every asset counts. 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 are out on the depletion path. Crypto, precious metals and collectibles are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
Do You Have to Withdraw or Liquidate the IRA?
No. This is the most common misunderstanding. The lender uses a calculation or a balance test. Your money stays in the account and keeps compounding. Tax treatment varies; consult a qualified professional before moving any funds.
What you must avoid is mixing up counting with pledging. Pledging means signing the IRA over as security for the loan. Per Ed Slott’s IRA education site, a pledged IRA is treated as a distribution, and a 10% early-distribution penalty applies if the owner is under 59½. Greenleaf Trust describes the same rule and cautions borrowers about listing an IRA on an asset schedule handed to a lender.
The loan is secured by the home. A properly structured asset-based loan never puts a lien on your retirement account. If a closing document names the IRA as collateral, stop and ask why.
One more habit worth skipping: pulling money out temporarily, parking it in a checking account and putting it back. You do not need it, it creates a real transaction on your statements, and it can muddy the paper trail the lender has to review.
Which IRA Types and Situations Work?
Traditional and Roth IRAs both fall under the retirement-account treatment. The same percentages apply, because the programs credit the account category, not the tax flavor. Other situations depend on the account’s accessibility, and the lender reviews each one.
| Situation | How it is handled | Watch for |
|---|---|---|
| Traditional or Roth IRA | Retirement credit on either path | Must be in your name |
| Under 59½ | 90% on qualifier; 70% on depletion | Qualifier credit is lower |
| 59½ or older | 100% on qualifier; 70% on depletion | Depletion credit does not rise |
| 401(k) | Same retirement credit as an IRA | Vesting and access |
| Self-directed IRA holding real estate | Not published as eligible | Illiquid; lender review |
| Inherited IRA | Set by the lender’s review | Confirm before applying |
The age gap matters. A borrower at 59½ or older on the qualifier path gets full credit on the IRA, while the same borrower on the depletion path gets 70%. A borrower under 59½ gets 90% on the qualifier path. Across the wholesale network, the qualifier path is the better home for retirement money when assets can cover the loan.
Vesting and access matter too. Confirm your specific account with a loan officer before you plan around it.
What Happens to Down Payment, Closing Costs and Reserves?
Funds you spend on the purchase cannot also count as qualifying assets. If your down payment comes from the IRA, that money is distributed, and the remaining balance counts at its program percentage. Plan the sources first, then the qualifying pool.
The practical sequence goes like this. Add up the cash you will bring and where it sits. Use non-retirement cash for the down payment and closing costs when you can. Leave the IRA untouched, then count whatever balance remains.
On the qualifier path, reserves are not required at or below 75% loan-to-value. Above that, the lender sets them. The depletion path publishes no reserve months, though the program reviews every file individually.
Depletion has its own floor. Qualified assets must equal at least the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid when asset depletion is your only income source.
How the Routes Compare
An asset-based mortgage is one of several ways to buy without a paycheck. Each route changes what the lender sees and what happens to your IRA.
| Route | What the lender sees | Effect on your IRA | Best fit |
|---|---|---|---|
| Asset qualifier | Assets cover the loan | None; balance stays | Cash-heavy buyer, no income |
| Asset depletion | Assets become income | None; balance stays | Large portfolio, smaller than loan |
| Actual distributions | Documented withdrawals | Taxable income created | Already drawing income |
| Pledging the IRA | A lien on the account | Treated as a distribution | Avoid |
| Agency method | Narrower retirement test | Varies by the agency | Conventional-profile borrowers |
Agency programs from Fannie Mae and Freddie Mac accept a narrower set of retirement assets and spread them over a much longer term. They are a different set of rules and do not govern these loans. Bank statement loans are for borrowers who document income through deposits. Business-purpose rental financing is DSCR, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. In that case personal assets mostly matter as reserves.
Where Do the Federal Rules Fit?
Federal rules explain why asset-based qualifying is allowed at all. Under 12 CFR 1026.43, a lender making a consumer mortgage must consider the borrower’s income or assets, other than the home that secures the loan. The CFPB’s small-entity compliance guide lists vested retirement amounts among the examples of assets a creditor may consider.
Two practical consequences follow. The home itself cannot be the asset that proves repayment. And the lender still reviews the rest of the file: credit, the property and, on the depletion path, debt-to-income.
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. That is why this article keeps the consumer asset programs and investor rental financing separate.
What Documents and Seasoning Should You Expect?
Expect statements, and lots of them. These programs skip traditional personal-income documentation, pay stubs and employment verification, but they do not skip paper. The assets are documented on both paths.
- Qualifier path: 60 days of seasoning and 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. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
- Both paths: accounts in your name, large deposits explained, and the source of funds reviewed.
- Credit: the qualifier path has 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: 0x30x12, with one 30-day late in the last twelve months considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
Start gathering statements before you pick a house. Seasoning is the step that trips up borrowers who move money between accounts right before applying.
An Indiana Buyer’s Decision: Home or Rental?
For a principal residence or second home in Indiana, both paths are open. The qualifier path reaches 80% leverage on a purchase and 75% on a refinance. The depletion path reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
For an Indiana investment property, only the depletion path applies, with 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. Those figures are lower on purpose.
Here is where the flip point sits. If your assets can cover the whole loan and the property is your home, the qualifier path usually gives better leverage and no derived-income math. If the loan outsizes your assets or the property is a rental, the depletion path is the only asset-based route. A rental that carries itself on rent may fit better under a DSCR loan, where qualification runs on the property. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust.
Common Mistakes to Skip
- Moving money right before applying. It breaks seasoning and creates questions.
- Treating the IRA as collateral. Counting is fine. Pledging is not.
- Spending the same dollars twice. Down payment money cannot also be qualifying assets.
- Assuming one lender’s formula fits all. Credit percentages and divisors differ widely across lenders. The figures here are this program’s.
- Calling it no documentation. It is fully underwritten, with statements.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, must equal or exceed the entire loan amount.
Asset depletion: A path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The share of a balance the lender does not count, such as the 30% left out of retirement accounts on the depletion path.
Seasoning: The length of time funds must sit in your account before they count.
Pledge: A signed agreement making an asset collateral for a loan, which is not how these programs work.
Debt-to-income: Monthly debts, including the housing payment, measured against monthly income.
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. Reach the team at 828-256-2183.
Frequently Asked Questions
Do I have to be retired to use IRA assets?
No. Retirement status is not the test. The program looks at account balance, ownership and age-based credit. On the qualifier path, borrowers under 59½ get 90% credit on a 401(k) or IRA, and borrowers 59½ or older get 100%. Underwriting reviews every file.
Does a Roth IRA count the same as a traditional IRA?
Both are retirement accounts, and the same percentages apply to either: 90% or 100% on the qualifier path by age, and 70% on the depletion path. The account must be in your name and documented with statements. Eligibility review decides edge cases.
Can my spouse’s IRA count toward my loan?
It depends on who is on the loan and whose name is on the account. Assets generally need to belong to a borrower on the file. Joint and spousal situations get reviewed individually, so share both sets of statements with a loan officer early.
What if the market drops before I apply?
The balance on your most recent statements is what gets counted. A drop reduces usable assets, and on the depletion path it reduces derived income. Build a cushion above the minimum and review fresh statements before you make an offer.
Will using my IRA to qualify create a tax bill?
Using a statement balance as underwriting evidence is different from taking money out, and the lender does not need you to move the funds. Actual withdrawals can have tax consequences. Speak with a qualified tax professional before you move any money.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
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. Ed Slott and Company, IRA Help
2. Greenleaf Trust, Pledging IRAs as Security
4. CFPB ATR/QM 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: Can a New Mexico Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can a Georgia Buyer Qualify for a Mortgage on IRA Assets Without Withdrawals? · How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage?
Guides: Asset-Based Mortgage in Indiana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- 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.