The Quick Read: A lender picks the path by testing which one the file actually clears. The asset qualifier path asks whether your eligible assets cover the entire loan. The asset depletion path turns those assets into monthly income and runs the debt-to-income test. A borrower is qualified on one path at a time, subject to underwriting.
- Qualifier path: eligible assets must equal or exceed the whole loan, and no employment or income is documented.
- Depletion path: usable assets divided by 60 months become qualifying income that must carry the housing payment and other debts.
- Leverage differs: up to 80% on a purchase and 75% on a refinance on the qualifier path, through select programs.
- Asset credit differs: retirement money counts at 90% to 100% on the qualifier path and 70% on the depletion path.
- Same program figures apply in New Mexico. Only the property, taxes, and local prices change.
This guide walks through how the choice gets made, step by step. It is written for people with large balances and small documented income: retirees, business sellers, and households living on a portfolio. Lendmire is a broker. It arranges these loans through select lenders in its network, and those lenders underwrite and approve each file.
What Are the Two Paths, in Plain Words?
Think of one path as a bucket test and the other as a paycheck conversion.
On the asset qualifier path, the lender adds up your eligible assets after applying a credit percentage to each account type. If the total equals or exceeds the entire loan amount, you qualify on assets alone. No employment or income gets documented. The assets themselves are documented, though. “No income documentation” never means “no documentation.”
On the asset depletion path, the lender adds up usable assets after haircuts, divides by 60 months, and treats the result as monthly income. That income then has to carry the full housing payment plus your other debts through the debt-to-income test.
One warning on labels. No federal rule defines either term. Both are product names, and lenders use them differently. Some treat the two as one method. Others treat them as separate tracks with different tests. Across the wholesale network Lendmire works with, the two are separate paths with separate tables, so the written guidelines for your specific program matter more than the label.
How Does a Lender Actually Choose?
The choice is rarely a matter of preference. It follows a sequence, and the file’s numbers usually settle it.
1. Inventory the assets. The lender lists every account, who owns it, and what type it is.
2. Apply the credit percentages for each path. The same account is worth different amounts depending on the path. More on that below.
3. Test the qualifier path. Do eligible assets equal or exceed the entire loan? If yes, the file clears without income.
4. Test the depletion path. Divide usable assets by 60. Does the resulting income carry the housing payment and other debts within the debt-to-income limit?
5. Check the minimums and leverage. Each path has its own loan-to-value caps and asset floors.
6. Pick the path that clears. If both clear, the borrower’s goals and the occupancy decide.
Here is the honest part. Many files clear only one path, and the loan size is usually the reason. Qualifier needs assets at least equal to the loan. Depletion needs enough monthly income to cover the payment, which often means assets well above the loan amount.
Federal law sets a loose frame behind all this. The CFPB’s ability-to-repay compliance guide says a creditor must consider and verify income or assets, and it lists eight factors. That is why a file that rests on assets still gets a documented ability-to-repay review. It does not set a fixed debt-to-income number, so each program writes its own.
Side by Side: Qualifier vs. Depletion
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| What is tested | Assets cover the whole loan | Assets become monthly income |
| Debt-to-income | No income documented | Derived income runs through DTI |
| Purchase leverage | Up to 80% | Up to 80% primary/second; 65% investment |
| Refinance leverage | Up to 75% | 80% rate-and-term; 60% cash-out (65% rate-and-term investment) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 floor | The lender’s matrix |
| Properties | Principal residence, second home | Also investment property |
All figures are ceilings and floors through select programs, subject to underwriting. They are not offers.
How Do the Credit Percentages Change the Answer?
This is where files tip from one path to the other. The same balance counts for different amounts.
On the qualifier path, brokerage accounts, certificates of deposit, money market, and savings all count at 100%. 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
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. If deferred pay is part of your picture, Lendmire’s piece How to Use Deferred Compensation in an Asset Depletion Mortgage File covers what can and cannot be counted.
Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds 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 source reviewed by the lender. Cash-out proceeds from the subject loan never count as qualifying assets.
Notice the pattern. A retirement-heavy borrower under 59½ does better on the qualifier path, where 401(k) money counts at 90%. On the depletion path the same money counts at 70%. A borrower holding mostly cash does equally well on both, which pushes the decision toward loan size and occupancy.
Two Worked Files
These are illustrations only. The lender’s own calculation governs.
File one: assets cover the loan. Picture a borrower seeking an $800,000 loan. She holds $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%, so $200,000). Usable assets total $800,000. That equals the loan, so she is reviewed on the qualifier path on assets alone, subject to underwriting. Run the same accounts through depletion and the retirement piece drops to 70%, which shrinks the pool. Qualifier wins.
File two: assets become income. Say a borrower holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets are $1,500,000. 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. Here the loan is much smaller than the asset pool, so the income conversion has real room. If the requested loan were larger than the usable assets, qualifier would fail outright, and depletion would not help either, since it usually needs assets well above the loan.
The takeaway: when your assets exceed your loan, depletion still works because the income carries the payment. When your assets only just match the loan, qualifier is the cleaner fit.
Where Does the General Rule Break?
Several edge cases change the answer.
Investment property. The qualifier path is for principal residences and second homes. Investment property is available only on the depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Consumer lenders still apply the same depletion tests there.
Depletion minimums. The depletion path needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. Where depletion is the only income source, liquid assets can never fall below $250,000. If derived income only supplements documented income, up to a 45% debt-to-income ratio, the minimum-assets rule is waived.
Seasoning and statements. The qualifier path wants 60 days of seasoning and two months of statements per qualifying account. The depletion path wants 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. Fresh money from a sale does not have to age.
Credit history. A first-time investor on the depletion path needs a 700 score. Housing history is 0x30x12, though one 30-day late in the last 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.
Reserves. The qualifier path requires none at or below 75% loan-to-value. Above that, the lender sets them. The depletion path publishes no reserve months.
Cash-out. Whether cash-out is allowed on the qualifier path, and at what leverage, is set by the lender and is not published. Treat any qualifier cash-out claim with suspicion.
When Does Rental Income Make This a DSCR Question Instead?
If the property is a pure rental, neither asset path is usually the answer. Debt service coverage ratio loans are business-purpose investor loans, and they qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Asset-based paths are borrower-level tools. They matter when you need a primary residence or second home, or when your own income is the obstacle.
Lendmire’s complete DSCR loans guide covers how rental-based qualification works. The deciding question is simple: is this home for you to live in, or a business asset that pays for itself? Business-purpose loans fall outside most consumer-mortgage rules, per the Cornell LII text of 12 CFR 1026.3. That exemption turns on the purpose of the loan, so classification should never be guessed at.
What Does This Look Like for a New Mexico Borrower?
The program figures do not change by state. A $4,000,000 qualifier ceiling is the same in Santa Fe as anywhere else. What changes is the property, local prices, and the buyer.
New Mexico files that fit this product tend to involve retirees buying a primary residence or second home, relocating buyers who sold a business or a house elsewhere, and households living on a portfolio. These borrowers often show strong balances and thin documented income. Lendmire’s consumer mortgage lending is licensed in New Mexico, among 16 states.
Key Terms Defined
Asset qualifier: A path where eligible assets must equal or exceed the entire loan, with no income documented.
Asset depletion: A path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The percentage of an account balance a lender refuses to count, because the money could lose value or carry tax or penalty costs.
Seasoning: The length of time funds must sit in an account before the lender counts them.
Debt-to-income (DTI): Your monthly debts divided by your monthly income. Lenders cap it.
Ability-to-repay review: The lender’s required check that you can handle the loan, which it must document even when no income is used.
What Should You Do Before Applying?
Gather statements for every account you might count. Know which path your birthday, account mix, and loan size favor. Do not move money around without a plan, because new deposits invite sourcing questions.
The Federal Reserve’s hosted Reg Z commentary explains that the creditor sets its own debt-to-income or residual income threshold. In practice, that means two lenders can read the same file differently. Because Lendmire is a broker with access to several lenders’ guidelines, it can compare programs rather than fit you to one.
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. You can also call 828-256-2183 or request a quote.
Frequently Asked Questions
Do I have to sell my investments to use either path?
No. The assets show capacity to repay. They are not a repayment source you must liquidate. They stay invested, and the lender documents them through statements.
Can a lender run my file both ways?
Yes, and it is a sensible way to test. Each path has its own tables, so the same accounts produce different totals. You are qualified on one path at a time, though, never a blend.
Does having large assets guarantee approval?
No. Credit, the property, leverage limits, and seasoning all still apply, and every file is underwritten individually.
Which path works for an investment property?
Only asset depletion, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance, through select programs. For a pure rental, a DSCR loan, which qualifies primarily on property-level rental income, is usually the better fit.
How does retirement money count?
On the qualifier path it counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire offers an asset-based mortgage program for New Mexico borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB ATR/QM Compliance Guide
3. Federal Reserve hosted Reg Z commentary
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does an Asset Depletion Loan Require Any Income? · How to Qualify for an Asset Qualifier Jumbo Loan · How Big Can an Asset Qualifier Mortgage Be?
Guides: Asset-Based Mortgage in New Mexico
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.