The Quick Read: A lender routes a Colorado file by checking four facts: how the home will be used, whether your usable assets cover the entire loan, whether you also have documented income, and whether your balances clear the depletion minimums, all subject to underwriting. Assets that cover the loan outright point to the qualifier path. Assets that must become monthly income point to depletion. The program figures are the same in Colorado as anywhere else.
- The qualifier path covers the whole loan with eligible assets and documents no income.
- The depletion path divides usable assets by 60 months and runs the result through a debt-to-income test.
- Investment property is available only on the depletion path, through select programs.
- You are qualified on one path at a time, never a blend of both.
- Both paths document every asset. Skipping income documents never means skipping documents.
Key Terms Defined
Programs and lenders use these words loosely, so here is how this article uses them.
- Asset qualifier: a path where eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
- Asset depletion: a path that turns usable assets into a monthly qualifying income, which must then carry the housing payment and other debts.
- Usable assets: the share of each balance the program counts, after the percentages that apply to that account type.
- Haircut: the cut taken off a balance that can swing in value or is harder to reach, such as stocks or retirement money.
- Debt-to-income (DTI): monthly debts divided by monthly qualifying income.
- Seasoning: how long money has sat in an account before the lender counts it.
Why do pages online disagree about all this? Some treat the two names as the same thing. Others use qualifier as the umbrella and depletion as the formula inside it. Terminology is not standardized across lenders. Read the guideline’s definition, not the label.
What Does the Lender Check First?
The lender starts with the property and its use, because that gate decides which path is even open. A principal residence or second home can go either way. An investment property can go only on the depletion path.
After that, the order runs like this:
1. Use of the property. Primary, second home, or rental.
2. Eligible assets. Which accounts you hold, and what each counts for on each path.
3. Documented income. Whether you have a pension, Social Security, or other income the lender can verify alongside the assets.
4. Loan size against assets. Do usable assets equal the whole loan, or do they have to produce income?
5. Credit and housing history. Score, mortgage lates, and any recent housing event.
6. Statements and seasoning. Whether the paper trail is old enough and complete.
Notice that income comes third, not first. These programs are built for borrowers whose balances are large and whose tax-return income is small or messy. Retirees, business sellers, inheritance recipients, early-retired professionals, and households living off a portfolio fit that description.
How the Qualifier Path Works
The qualifier path asks one question: do your counted assets equal or exceed the entire loan? If yes, you qualify on assets alone, subject to underwriting. Nothing is divided by months and no DTI is calculated.
Through select programs, this path typically allows up to 80% loan-to-value on a purchase and 75% on a refinance, for a principal residence or second home. Loans run up to $4,000,000. The credit floor is a 600 score, and reserves are typically not required at or below 75% loan-to-value. Above that, the lender sets them. The lender does not publish whether cash-out proceeds are allowed on this path, so don’t plan around it.
Here is what each account counts for on the qualifier path.
| Asset (qualifier path) | Share that counts |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) or IRA, under age 59½ | 90% |
| 401(k) or IRA, 59½ or older | 100% |
Accounts combine. Here is an illustration, and the lender’s own calculation governs. Take an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That is $800,000 of usable assets against an $800,000 loan. It is reviewed on assets alone, subject to underwriting.
Seasoning is 60 days, with two months of statements for each qualifying account.
How the Depletion Path Works
The depletion path treats your portfolio as a paycheck. It counts your usable assets, divides by 60 months, and calls the result monthly qualifying income. That income then carries the housing payment and your other debts through the DTI test.
Nothing is sold. The 60-month divisor is a qualifying convention, not a plan to spend down your accounts. The lender never liquidates anything.
Leverage here depends on the property. On a principal residence or second home, the ceiling is typically 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. Loans run from $125,000 to $3,500,000.
The haircuts are heavier than on the qualifier path.
| Asset (depletion path) | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Equity in other real estate | 60% |
The home you are buying cannot count as an asset toward its own loan. Federal rules say the same about the dwelling that secures the mortgage, as covered below.
Not eligible on the depletion path: 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. Lendmire’s piece How to Use Deferred Compensation in an Asset Depletion Mortgage File explains why that one trips up so many files.
Here is the second illustration, again with the lender’s own calculation governing. Say you hold $1,500,000 in securities (80%, so $1,200,000) and $300,000 in cash (100%, so $300,000). That is $1,500,000 usable. Divide by 60 months and you get $25,000 of monthly qualifying income. That figure must then carry the housing payment and other debts through the DTI test.
Two more rules matter. Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 liquid when depletion is your only income source. But if asset income only supplements documented income, up to a 45% DTI, the minimum-assets rule is waived.
Statements must be at least 120 days old at application, plus a recent one within 45 days. Funds from a business sale, inheritance, or legal settlement are excused from that seasoning.
Side by Side: What Each Path Tests
| Factor | Qualifier path | Depletion path |
|---|---|---|
| What is tested | Assets cover the whole loan | Derived income passes DTI |
| Income documented | None | Derived, plus any documented |
| Investment property | Not available | Available |
| Loan range | Up to $4,000,000 | $125,000 to $3,500,000 |
| Purchase leverage, primary or second home | Up to 80% | Up to 80% |
| Credit | 600 floor | The lender’s matrix |
| Main trade-off | Assets must equal the loan | Heavier haircuts and minimums |
Think of it this way. The qualifier path tests a balance-sheet cushion. The depletion path tests an income figure against debts. A borrower with large balances and few debts often finds the qualifier path simpler. A borrower with a big portfolio relative to the loan, an investment purchase, or documented income to pair with it often finds depletion fits.
If Your File Looks Like This
| Your file | Likely route | Why |
|---|---|---|
| Assets exceed the loan, second home | Qualifier | Assets cover it outright |
| Colorado rental purchase | Depletion | Only path open to investment property |
| Assets below loan, documented pension | Depletion, supplementing | Minimum-assets rule is waived |
| Wealth in options or unvested RSUs | Neither yet | Not eligible until converted |
| Wealth mostly in an IRA, under 59½ | Qualifier | 90% counts, versus 70% on depletion |
| Business sale proceeds just landed | Either, with care | Seasoning rules differ by path |
Credit also steers the choice. A first-time investor on the depletion path needs a 700 score. Housing history runs 0x30x12, and one 30-day late in the past twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
Where the Choice Flips
Same borrower, two paths. Return to the $800,000 loan from the qualifier illustration. On the qualifier path it passes with $800,000 of usable assets. Now run those same accounts through depletion: brokerage at 80% is $264,000, the 401(k) at 70% is $210,000, and savings at 100% is $200,000. That is $674,000 usable.
It fails. $674,000 sits below the $1,000,000 minimum, which is the lesser of $1,000,000 or 1.25 times the loan. The file never reaches the DTI test. Same borrower, same accounts, different answer.
Now flip it the other way. Say you buy a Front Range rental whose rent doesn’t cover the payment, and you hold a large portfolio. The qualifier path is closed because the property is an investment. Depletion stays open, subject to underwriting. Or say your assets fall short of the loan but you draw a documented pension. Depletion can supplement that income, and the minimum-assets rule is waived.
One path at a time is a hard rule. If the first path fails, the file can be re-run under the other when the facts fit, but it needs its own documents and its own review.
What Changes on a Colorado File?
The program figures don’t change. Leverage, haircuts, minimums, and seasoning are the same for a Colorado borrower as for anyone else, subject to underwriting. What changes is the fact pattern that tends to show up.
A mountain-town second home bought by someone with big, simple balances usually routes to the qualifier path. The assets are mostly brokerage, savings, and retirement money, and they cover the loan. A rental purchase along the Front Range routes to depletion, because that is the only path open to investment property. Loan size matters too. Larger purchases in expensive Colorado markets land inside the qualifier range up to $4,000,000 or the depletion range up to $3,500,000. Nothing above $4,000,000 is available on either path.
Two other patterns come up. Borrowers whose wealth sits in employer stock options, unvested RSUs, or deferred compensation find that much of it doesn’t count until it is converted. And founders who just sold a business hold a large cash balance with no recent income, which is exactly the file these paths were built for.
Business money has one more catch. Cash retained inside a company is not yours until it is distributed. Accounts beyond your ownership share are not published as eligible. The documented route is moving the money to a seasoned balance in your own regulated account, with the source reviewed by the lender.
Why Both Methods Exist at All
Federal law doesn’t name either method. The consumer ability-to-repay rule, found in 12 CFR 1026.43, lists income or assets as things a creditor must consider. It excludes the value of the dwelling that secures the loan. It also requires verification through reliable third-party records, which is why every account needs statements.
The CFPB’s official interpretation adds that a creditor must keep documentation showing how it considered income or assets. It also allows additional factors. A law-firm summary of the rule update notes the standard is to consider income or assets, debts, and DTI or residual income, not to meet one fixed ratio.
The practical result is flexibility. Each lender writes its own divisor, haircuts, and minimums. That is why a broker who sees many guidelines can tell you which version fits your file. These asset-based loans are consumer mortgages, so consumer disclosures apply. Business-purpose DSCR loans are exempt from those.
What About a Rental That Pays for Itself?
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. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your assets then serve as reserves and liquidity rather than income. Where coverage falls below 1.00, select lenders in the network offer programs, though leverage and terms adjust.
So the question for a Colorado rental buyer is simple. Does the rent carry the property? If yes, DSCR is usually the cleaner route, and Lendmire’s complete DSCR loans guide walks through it. If the rent doesn’t carry it and your balance sheet is strong, the depletion path is the alternative. A bank statement program, for borrowers who document income with deposits, is a different product again.
Documents to Gather
- Statements for every account you want counted, with the right recency for your path.
- Proof of age for retirement accounts, since 59½ changes the qualifier percentage.
- A paper trail from any entity to your personal account for business money.
- Documentation for large deposits, with the source of funds.
- Proof of documented income, if you plan to supplement.
- A realistic list of what is held in options, RSUs, crypto, or metals. Those aren’t published as eligible on either path.
One caution on crypto, metals, and collectibles. They are not published as eligible, and the lender won’t count them at a percentage. The route is converting them to a seasoned cash balance. Funds that you sell may carry consequences.
Two more mistakes to avoid. Don’t count the same dollars twice. Money used for the down payment, closing costs, or reserves can’t also generate income. And don’t trust online calculators that ignore haircuts.
Frequently Asked Questions
Are asset qualifier and asset depletion the same thing?
Not in this program. The qualifier path checks that eligible assets cover the whole loan and documents no income. The depletion path turns usable assets into monthly income over 60 months and runs a DTI test. Lenders use the names interchangeably, so always read the guideline definition.
Do I have to sell my investments?
No. Depletion is a qualifying calculation, and the lender never liquidates your accounts. You keep your holdings. The funds you use for the down payment and closing costs do leave your accounts, and they come off the total before any income is derived.
Can I use either path on a rental property?
Only the depletion path, through select programs, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The qualifier path covers principal residences and second homes. If rent covers the payment, DSCR is often the better fit for a rental, subject to lender guidelines.
Does “no income documented” mean no documents?
No. Every asset you count is documented with statements, and the lender reviews the source of funds. The qualifier path documents no employment or income. The depletion path derives income from assets. Both are underwritten individually, subject to credit approval.
What if the first path fails?
A file can often be re-run under the other path when the facts fit, though it needs its own review and documents. A borrower is qualified on one path at a time. Common fixes are adding documented income to supplement depletion, waiting for assets to season, or converting ineligible holdings to cash.
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. Lendmire is a broker and arranges these loans through select lenders in its wholesale network. Programs change, and every file is underwritten individually.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB Reg Z § 1026.43 interpretation
3. Consumer Finance Monitor, CFPB finalizes ability-to-repay and qualified mortgage rules
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Depletion vs Bank Statement HELOC for an Owner Between Businesses · How to Qualify for an Asset Qualifier Mortgage · How to Qualify for an Asset Depletion Jumbo Loan
Guides: Asset-Based Mortgage in Colorado
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.