How Jumbo Loan Asset Depletion Rules Work for Mixed Accounts

The Quick Read: A lender sorts each account into a bucket, discounts the bucket by an asset-type percentage, subtracts the money needed to close, and divides what remains over a set number of months. The result is monthly qualifying income, and the assets stay where they are. Cash counts closest to full value, brokerage accounts take a discount, and retirement accounts usually take the largest one. Every lender sets its own percentages and divisor, so the same portfolio can produce different incomes at different lenders.

• The mix of accounts matters as much as the total balance.
• Money used to close cannot also be counted as income.
• The divisor is the biggest swing factor.
• No federal formula exists, so each program’s guidelines decide.
• On a primary residence, the asset-depletion alternative runs to about 80% LTV, subject to lender guidelines.

Picture a borrower with a large portfolio and a thin tax return. Maybe a retiree, maybe someone who sold a business. Traditional income math says no. Asset depletion says the balance sheet is the income source. This piece walks through how that works when the portfolio is not one tidy account but a mix.

What Asset Depletion Means on a Jumbo File

Asset depletion is an income-qualifying method. The lender treats a slice of your liquid and semi-liquid assets as if it were spread out over a fixed number of months. That monthly figure is your qualifying income. You do not sell anything, and you do not have to draw it down.

It fits borrowers whose assets are large and whose reported income is small or irregular. Retirees, people between jobs after a sale, and heavy-depreciation filers are the usual profiles. Across the wholesale network, the method is used on owner-occupied homes. It is a consumer mortgage method, so it is not the tool for a rental. Rentals run on a different path, covered in Lendmire’s complete DSCR loans guide.

Loan sizes in the alt-doc space run roughly $125,000 to $3,500,000, and reserves commonly sit around six months of the housing payment. Those are typical network figures. Individual lenders vary.

Key Terms Defined

Haircut: the percentage discount a lender applies to an asset type before counting it.

Divisor: the number of months the eligible pool is spread over to produce monthly income.

Net eligible assets: the pool left after discounts and after funds needed at closing are removed.

Seasoning: how long funds have sat in an account before the lender will count them.

Custodian statement: the account statement from a brokerage or retirement custodian that shows holdings and value.

Reserves: liquid funds held after closing to cover the housing payment for a set number of months.

Who Sets the Rules?

There is no federal haircut or divisor. The federal repayment-capacity framework asks a lender to consider income or assets as one of eight underwriting factors. It does not say how to convert a balance into income.

Third-party reviewers filing with the SEC have noted that federal rules give no definitive guidance on how asset-based qualifying satisfies those requirements. In the same filing, one reviewed program leaned on substantial reserves rather than income verification. The practical read: legitimacy comes from verified assets plus reserves, and the numbers come from each lender’s program sheet.

That is why the answer to “how much income do I get” always starts with “which lender.”

How Underwriting Treats the Pool, Step by Step

This is the general sequence most programs follow. Percentages, divisors, and the way a lender sequences certain adjustments, such as when a haircut is applied, can change by program.

1. Inventory and document every account. Custodian or bank statements establish the balance. These are investment or deposit statements, not the 12 months of bank deposits used in a bank statement loan.

2. Sort accounts into buckets. Cash and equivalents. Publicly traded securities in taxable brokerage accounts. Retirement accounts, sometimes split by borrower age or plan type. Other items, such as insurance cash value, only where a program accepts them.

3. Apply a per-bucket percentage. Cash counts at or near full value. Securities are discounted for market swings. Retirement funds are discounted for the tax cost of pulling them out.

4. Subtract funds committed to the deal. Down payment, closing costs, and required reserves come out of the pool. A dollar cannot be both the down payment and the income base.

5. Divide by the program’s divisor. The net eligible total divided by the number of months gives monthly income. A longer period cuts the income. The same portfolio can yield roughly half as much under a much longer divisor.

6. Run the result through debt-to-income. The figure can stand alone or sit alongside Social Security, pension, or other documented income.

7. Check the overlays. Credit score, reserves, seasoning, account access, and occupancy all apply, subject to lender guidelines.

How Each Account Type Is Treated

Treatment follows access and tax friction. The reasoning is simple, and it is the same reason you will see the same pattern across lenders.

The retirement line is the one that surprises people. Early IRA distributions, generally those taken before age 59½, typically carry an additional tax on top of regular income tax unless an exception applies. That tax cost is not a mortgage rule, but it is the underlying reason underwriters shave retirement balances, and why 59½ shows up as a line in guidelines. Lendmire’s piece How to Use Retirement Accounts for Reserves on an Asset Depletion Mortgage covers that side in detail.

A Mixed Portfolio Run Through the Steps

These are modeled assumptions, not program terms. Say a borrower holds three pools: cash, a taxable brokerage account, and a retirement account. Assume cash counts at 100%, brokerage at 80%, and retirement at 70%. Assume a purchase that needs a down payment, closing costs, and reserves.

Here is the order that matters. Apply the percentages to each bucket first. Then subtract what the deal consumes. Then divide.

The twist is which bucket pays for the deal. If the down payment comes from cash, the cash bucket shrinks, but the higher-discounted buckets stay whole. If the down payment comes from brokerage, the 80% bucket shrinks instead. Pulling from retirement triggers tax friction and is usually a poor trade. Because the buckets carry different percentages, the same total spend leaves a different net pool depending on where it came from.

As a rule of thumb, funding the deal from the highest-counted bucket costs the most qualifying income, because you lose dollars that were counting at full value. Funding from a lower-counted bucket costs less qualifying income but may cost more in taxes or market exposure. Some programs subtract before discounting and some after. That sequence changes the result, so ask which one applies before moving money.

Where the General Rule Breaks

These are the named edge cases that move a file.

Retirement-heavy pools. The more of the pool sits in retirement, the bigger the discount. Some programs split by age or plan type, such as IRA versus 401(k).

Concentrated stock positions. A large single holding may take an extra discount. Unvested shares, private-company stock, and business operating funds are often excluded entirely.

Accounts already paying out. If a borrower is already taking retirement distributions, some programs use the documented distributions as income instead. That is a different treatment from depletion.

Joint and third-party ownership. Accounts owned by someone who is not a borrower may be excluded. A spouse’s account on a joint file needs its own paperwork.

Pledged or borrowed funds. Assets borrowed against typically do not count.

Agency divisors. Agency programs use their own rigid methods. Do not apply those divisors to jumbo asset-based programs. They are a different product.

Recently moved money. Large transfers between your own accounts need a paper trail. Moving funds right before applying creates sourcing questions that a clean statement history avoids.

Asset Depletion or Bank Statements?

The two are separate routes for borrowers whose traditional personal-income documentation understates what they can carry. The right pick depends on where the strength sits.

Owner-occupied cash-out on bank statements tops out at 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio. Those are typical network ranges, subject to lender guidelines and credit. For a rental, neither is the usual path. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and it is a business-purpose loan reviewed differently from an owner-occupied mortgage.

What Derails These Files

Most of the trouble is paperwork and sequencing, not the math.

• Double counting. Reserves, down payment, and income base cannot share the same dollars.
• Face-value thinking. Counting a retirement balance at 100% overstates income by a wide margin.
• Stale statements. Custodian statements that are out of date force a re-run.
• Unexplained transfers. A large deposit with no paper trail stalls review.
• Wrong titling. An account held by a non-borrower may not count at all.
• Assuming one formula. A calculator estimate is not an approval. The lender’s own program sheet governs.

A documentation checklist by account type keeps this clean. For cash: recent statements and sourcing of any large deposit. For brokerage: custodian statements showing holdings and ownership. For retirement: custodian statements plus proof of access and vesting. For jointly held accounts: titling documents and borrower relationship.

Next Step

If you hold a mix of cash, brokerage, and retirement accounts and want to see how the numbers work, Lendmire can help you compare asset-based and alt-doc options through select lenders in its wholesale network. Lendmire is a broker, not a lender, and every file is reviewed individually. Consumer mortgage programs are available in 16 states.

Tax treatment varies; consult a qualified professional.

About Lendmire

As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB ATR small-entity compliance guide

2. SEC ABS-15G due-diligence filing