The Quick Read: The file’s numbers choose the path, and the first test is simple. Can your verified assets cover the entire loan on their own? If so, the asset qualifier path usually fits. If not, the asset depletion path turns those assets into monthly income instead.
- Asset qualifier path: your eligible assets, after the credit percentages, must equal or exceed the whole loan. No employment or income is documented. It runs to $4,000,000 on a principal residence or second home, subject to underwriting.
- Asset depletion path: usable assets divided by 60 months become qualifying income. That income carries the housing payment and your other debts through the debt-to-income test. Loans run $125,000 to $3,500,000 through select programs.
- Property type: only the depletion path reaches investment property.
- Documentation: both paths document your assets. “No income documentation” never means no documentation.
- One path at a time: a borrower is qualified on one path per file. The figures here are ceilings and floors, not offers.
Picture a Texas retiree with a large brokerage account, an IRA, and a pension that would not impress a loan officer. Or a founder who just sold a company and has cash but no paycheck. Both are asset-rich and income-light. Both can be right for one path and wrong for the other, and the reason is arithmetic, not preference.
Key Terms Defined
Asset qualifier path. A way to qualify on assets alone: eligible assets must cover the entire loan amount, and income is not documented.
Asset depletion path. A way to convert eligible assets into a monthly qualifying income that then runs through the debt-to-income test.
Credit percentage (haircut). The share of an account balance the lender counts. Lenders discount accounts whose value can swing or be taxed.
Usable assets. Your balances after the credit percentages are applied, and after money going into the deal is removed.
Debt-to-income (DTI). Your monthly debts, including the new housing payment, divided by your monthly qualifying income.
Seasoning. The time funds must sit in an account, shown by statements, before the lender counts them.
Principal residence and second home. The two occupancy types both paths can finance. Investment property is the third, and only the depletion path covers it.
How Does the Lender Decide Between the Two Paths?
A lender decides by working through six questions in order. The first two usually settle it: what the property is, and whether usable assets cover the whole loan. The rest decide whether the chosen path holds up.
1. What is the property? A principal residence or second home can go either way. An investment property can only go through the depletion path.
2. Do usable assets equal or exceed the whole loan? If yes, the qualifier path is open. If no, the lender looks at depletion.
3. How heavy is your debt load? The qualifier path documents no income, so there is no DTI ratio to fail. The depletion path forces a DTI test, and large existing debts can break it.
4. Do you have other documented income? Social Security, a pension, or rental income can sit next to depletion income. Asset-derived income can supplement documented income up to a 45% DTI ratio. When it does, the minimum-assets rule is waived.
5. Are the statements seasoned? The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants statements at least 120 days old plus the latest one within 45 days.
6. Do credit and leverage fit? The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount.
Across the wholesale network Lendmire places files with, the sizing question usually comes first and the income question second. Many files that look like depletion files at first glance turn out to be qualifier files once someone totals the usable balances against the loan.
Side by Side: What Each Path Actually Tests
The two paths test different things. The qualifier path asks whether assets cover the loan. The depletion path asks whether assets, converted to income, carry the payment. Everything else follows from that split.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| What it tests | Assets cover the whole loan | Derived income carries payment and debts |
| Property use | Principal residence or second home | Primary, second home, or investment |
| Loan range | Up to $4,000,000 | $125,000 to $3,500,000 |
| Statements | 60 days seasoning, 2 months per account | 120-day-old plus one within 45 days |
| Credit | 600 minimum | Lender’s score and loan-amount matrix |
| DTI | No income documented | Derived income runs through DTI |
Leverage differs by path too, and it depends on occupancy. On the qualifier path, you can borrow up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on that path is set by the lender and is not published.
On the depletion path, leverage on a principal residence or second home reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. All of it is subject to underwriting.
What Counts as an Asset on Each Path?
The credit percentages differ by path, and the difference can flip which path looks better. The same dollar in a brokerage account counts for more on the qualifier path than on the depletion path.
Asset qualifier path (share of the balance that counts):
- 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.
Asset depletion path (share of the balance that counts):
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts 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 it.
Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path. Skip any hope that they count at a percentage. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Here is the practical catch. A retiree past 59½ with most of the wealth in an IRA sees 100% credit on the qualifier path and 70% on the depletion path. That gap alone can decide the file.
The Same File Run Both Ways
Run one portfolio through both paths and the winner usually jumps out. These figures are illustrative, and the lender’s own calculation governs.
Say a Texas buyer needs an $800,000 loan on a principal residence. Their balances look like this:
- Brokerage accounts: $330,000 at 100% counts $330,000.
- 401(k) under 59½: $300,000 at 90% counts $270,000.
- Savings: $200,000 at 100% counts $200,000.
That totals $800,000 of usable assets, which equals the loan. The file is reviewed on assets alone on the qualifier path, subject to underwriting. No income gets documented, and no DTI test runs.
Now run the same balances through the depletion path. The brokerage account counts as securities at 80%, so $330,000 becomes $264,000. The 401(k) counts at 70%, so $300,000 becomes $210,000. Savings still counts $200,000. Usable assets total $674,000. Divided by 60 months, that is roughly $11,200 of monthly qualifying income.
That income then has to carry the housing payment and other debts. But the file hits a wall earlier. The depletion path wants qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. For an $800,000 loan, that is $1,000,000, and this borrower has $674,000. The qualifier path wins, and it wins by a wide margin.
Flip the scenario. A different borrower holds $1,500,000 in securities (80% counts $1,200,000) plus $300,000 in cash (100% counts $300,000). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income, which then carries the housing payment and other debts through the DTI test. Now suppose the house costs more than $1,500,000 of usable assets can cover. The qualifier path is closed, since assets must equal the whole loan. The depletion path is the only route, and it works only if DTI passes.
Why Two Paths Exist at All
The two paths exist because the federal ability-to-repay rule lets a lender rely on income, assets, or both. CFPB Regulation Z section 1026.43 requires a lender to consider your current or expected income or assets, other than the value of the home securing the loan. It must also consider DTI or residual income. A law-firm review of CFPB supervisory findings adds that a lender only has to verify the income or assets it actually relies on.
That is the whole logic. The depletion path converts assets into income and runs DTI. The qualifier path rests the review on the assets themselves. The rule names neither product, so these labels are industry usage, and lenders apply them differently.
Two details matter to your file. First, a down payment cannot count as an asset, per a second CFS Review post on non-QM loans. That is why money going into the deal comes out before any division. Second, the lender must verify what it relies on using reasonably reliable third-party records, as the CFPB compliance guide explains. For you, that means account statements.
Which Borrower Fits Which Path?
Borrower profile usually points to one path. Think of the table below as a starting point, not a verdict, since every file is underwritten individually.
| Borrower profile | Likely path | Why |
|---|---|---|
| Retiree 59½+, large IRA | Qualifier | 100% credit; assets can cover the loan |
| Seller of a business | Either | Funds excused from depletion seasoning |
| Heavy existing debt | Qualifier | No DTI test on this path |
| Modest pension plus assets | Depletion | Asset income supplements documented income |
| Buyer of an investment property | Depletion | Qualifier path excludes investment property |
A few notes on those rows. On the depletion path, sale-of-business, inheritance, and legal-settlement funds are excused from the 120-day statement-age rule. A founder with fresh sale proceeds can use that. A borrower with documented income and a high debt load, on the other hand, may fail DTI under depletion and still pass the qualifier path.
Mixed-income borrowers deserve a closer look. Depletion income can sit on top of pensions or Social Security, up to a 45% DTI ratio. When it supplements documented income, the minimum-assets rule is waived. That makes depletion the natural fit for a household that has some income and a good portfolio.
Where the General Rule Breaks
Most of the surprises come from a handful of edge cases. Know them before you apply.
Down payment from the same account. The funds going into the deal come out of your usable balance first. Total the account after the down payment and closing funds leave, not before.
Labels and divisors. Lenders use these names inconsistently. Some call a shorter-horizon version of depletion a qualifier, and some use “utilization” for depletion. The divisor, not the label, is the number that matters. Across the programs Lendmire places files with, the divisor on the depletion path is 60 months. Lenders use different ones, so ask for the divisor in writing.
Credit and history. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor on that path needs 700. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
Reserves. On the qualifier path, none are required at or below 75% loan-to-value, and above that the lender sets them. The depletion path has no published reserve months.
Failing one path. A file that misses the qualifier path can often be re-run on the depletion path, but that is a fresh review. The credit percentages, minimums, and DTI test all change. Both paths are never blended on one file. For a deeper look at depletion sizing, see How a Jumbo Lender Sizes a Loan on Asset Depletion for a Retiree.
On files like this, the failure points are rarely the headline numbers. They are a large deposit nobody can explain, a statement that is a few days too young, or an account that was assumed to count and does not. Fixing those before submission matters more than shopping lenders.
What This Means for a Rental Investor
If your goal is a pure rental purchase, an asset path is rarely the first tool. 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 loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Personal income and DTI are not the test. Lendmire’s complete DSCR loans guide walks through that route.
The asset paths matter when an asset-rich investor wants a home to live in or a second home. The rental portfolio can stay on DSCR financing while a principal residence or second home goes through assets. One caution: assets consumed in one calculation are not available for another loan.
The assets stay where they are. You document them. You do not have to sell them. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
If you do want an investment property on the depletion path, expect tighter leverage than on a home: 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. This one is a genuine judgment call. Some investors will find DSCR financing cleaner for a rental, while others with rent that does not carry the payment may find depletion the only workable route.
How to Confirm Everything With Your Lender
Before you submit, ask the lender or broker to confirm these in writing:
- Which path your file is being reviewed on.
- The divisor, if the lender uses depletion.
- The credit percentage for each asset type you hold.
- The minimum qualified assets on the depletion path.
- How statements and large deposits are seasoned.
- How the credit score and loan amount matrix applies to you.
- Whether any account you plan to use is on the ineligible list.
Frequently Asked Questions
Does the lender choose the path, or do I?
The numbers choose it, and you and your broker present the file on the path that fits. Usable assets against the loan amount is the first test, and property type is the second. The lender then underwrites that path, and the lender’s own calculation governs.
Which path gives me more borrowing power?
Neither always wins. The qualifier path counts brokerage and savings at 100%, but usable assets must cover the entire loan. The depletion path can support a loan larger than your assets, but only if the derived income passes the DTI test and the minimum-assets rule is met or waived.
Can I combine asset income with pension or other documented income?
Yes, on the depletion path. Asset-derived income may supplement documented income up to a 45% DTI ratio, and the minimum-assets rule is waived when it does. The qualifier path documents no income, so nothing blends there. One path is used per file.
Does this work for an investment property in Texas?
Only on the depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor on that path needs a 700 score. For a straightforward rental purchase, DSCR financing is usually the better fit.
Do the figures change because the property is in Texas?
No. The program figures are the same by state, and Lendmire’s consumer mortgage lending is licensed in 16 states, Texas among them. State facts such as taxes and insurance still flow into the full housing payment that the depletion path’s DTI test measures.
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. Call 828-256-2183 to talk through your balances. As a broker, Lendmire arranges these loans through select lenders; it is not a commitment to lend.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z, section 1026.43
2. CFS Review: CFPB Addresses Non-QMs Under Ability-to-Repay Rule
3. CFS Review: CFPB Prohibits Considering Down Payments for Non-QMs
4. CFPB ATR/QM 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: How an Asset Depletion Mortgage Works · How Asset Depletion Income Is Calculated From Your Portfolio · How Big Can an Asset Depletion Jumbo Loan Be?
Guides: Asset-Based Mortgage in Texas
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.