The Quick Read: The deciding test is simple. The lender runs your statements both ways. Do the eligible assets cover the entire loan outright, or do they convert into monthly income that carries the payment through the debt-to-income test? You are then qualified on whichever one path the file clears, never both at once. These figures are ceilings and floors through select programs, subject to underwriting, not offers.
- Asset qualifier path: eligible assets, after credit percentages, must equal or exceed the whole loan. No employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income. That income must carry the housing payment and other debts.
- Investment property: it fits only the depletion path in this program. Qualifier is for principal residences and second homes.
- Asset mix decides a lot: brokerage, CDs, money market and savings count more fully on the qualifier path. Retirement funds and securities are discounted on the depletion path.
- Assets are always documented: “no income documentation” never means “no documentation.”
Key Terms Defined
Asset qualifier is the path where eligible assets must equal or exceed the entire loan amount. Nothing is converted into income.
Asset depletion is the path where usable assets are divided by 60 months. The result is a qualifying income that runs through the debt-to-income test.
Debt-to-income (DTI) is the share of monthly income that goes to the housing payment and other debts.
Haircut is the percentage a lender trims off an asset’s balance because that asset is less certain than cash. A 70% credit on retirement funds is a 30% haircut.
Seasoning is how long funds have sat in an account before the lender counts them.
Usable assets are the balances left after credit percentages are applied and cash needed to close is set aside.
Why Two Paths Exist at All
Some borrowers have large balances and small documented income. Think of a retiree who moved to North Carolina after selling a house, or a business owner who just sold the company. A household living on a portfolio looks similar. A standard income review can understate what these borrowers can carry.
An asset-based mortgage solves that in two different ways. The qualifier path asks whether you could pay off the loan from your balances. The depletion path asks whether your balances, spread over a fixed schedule, would produce enough monthly income to carry the payment and your other debts.
Across Lendmire’s wholesale network, the names are not standardized. Some lenders use “asset qualifier” and “asset depletion” as synonyms. Others use “asset qualifier” for a method that never turns assets into income. This article defines the terms by the program Lendmire places files with. If you shop elsewhere, ask what each label means on that lender’s sheet before comparing.
The Two Paths Side by Side
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| What is tested | Assets vs. whole loan | Derived income vs. DTI |
| Income documented | None | Derived from assets |
| Occupancy | Primary, second home | Primary, second, investment |
| Purchase leverage | Up to 80% | 80% primary/second; 65% investment |
| Loan amount | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
Subject to underwriting, through select programs. Depletion-path refinance leverage appears in the leverage section below.
How the Lender Actually Decides, Step by Step
The lender does not ask you to choose. It runs the file under each path your occupancy allows and picks the one that works. Here is the sequence.
Step 1: Check occupancy and property. A principal residence or second home can go down either path. An investment property can only go down the depletion path. That step alone settles many files.
Step 2: Inventory the assets. The lender lists every account you want counted, with statements. It sets aside the cash you need for the down payment and closing costs. What remains is the pool it can count.
Step 3: Apply the credit percentages. Each path has its own table (covered below). Never mix the two. A brokerage account is worth 100% on one path and 80% on the other if it holds securities.
Step 4: Run the qualifier test. Do the eligible assets equal or exceed the entire loan amount? If yes, the file can qualify on assets alone. No DTI test on documented income applies, because no income is documented.
Step 5: Run the depletion test. Divide usable assets by 60 months. That number is your monthly qualifying income. The lender then sets it against the proposed housing payment and your other debts. The file also has to meet the path’s minimum-asset rule.
Step 6: Check the gates. Credit score, housing history, leverage, loan amount, statement age and seasoning all have to fit the path being tested. A file can pass the math and still fail a gate.
Step 7: Pick the winner. If only one path clears, that settles it. If both clear, the tiebreakers are practical: higher leverage, simpler documentation, lighter seasoning, and which assets stay untouched. If neither clears, the answer is a smaller loan, a larger down payment, or a different product altogether.
Notice what the lender is really comparing. It is not “which program is better.” It is which test your balance sheet passes with the least friction.
What Counts, and How Much, on Each Path
Asset qualifier path (share of the balance that counts):
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% under age 59½, and 100% at 59½ or older.
- Accounts combine, so several balances can add up to cover the loan.
Asset depletion path (share of the balance that counts):
- Cash accounts and certificates of deposit: 100%.
- Securities: 80%.
- Private stock: 75%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
Several things are 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.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path. The documented route is converting them into a seasoned cash balance in a regulated account. The lender reviews the source of that money. They never count at a percentage.
One more rule matters on the depletion path: cash-out proceeds never count as qualifying assets. You cannot borrow against one property to qualify for the next.
Worked Examples
These use the program’s percentages and the 60-month divisor. The lender’s own calculation governs.
Example 1: A retiree moving to North Carolina, qualifier path. Picture a borrower buying a home with an $800,000 loan. Their accounts hold $330,000 in brokerage (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). Usable assets total $800,000. That equals the loan, so the file is reviewed on assets alone, subject to underwriting. No income is documented. Had the borrower been 59½ or older, the 401(k) would have counted in full.
Example 2: Asset-rich, debt-heavy, depletion path. Consider a borrower with $1,500,000 in securities and $300,000 in cash. On the depletion path, securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets come to $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the DTI test.
Example 3: The same balances run both ways. Run Example 2’s balances through the qualifier path instead. Brokerage securities count at 100%, not 80%, so the pool becomes $1,500,000 plus $300,000 in cash, or $1,800,000. If the loan is at or below that figure and within the path’s limits, qualifier may work and no DTI math is needed. If the loan is larger than the pool but the borrower’s debts are light, depletion may pass where qualifier cannot. The same statements give different answers depending on the test.
Example 4: Second home with a big existing mortgage. A borrower with a substantial balance sheet but heavy monthly debts will often find that the qualifier path fits better. The depletion path would stack the new payment on top of those debts. The qualifier path never runs that test. For a loan above the pool but with light debts, depletion may be the only one that clears.
Where the General Rule Breaks
You hold investment property, not a home. The qualifier path is for principal residences and second homes. For an investment property, the depletion path is the asset route. Business-purpose rental financing is typically DSCR instead, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Asset-based qualification on a rental is the alternative when a property’s rent is thin, a renovated unit has no lease yet, or most of your wealth sits in liquid accounts. Lendmire’s complete DSCR loans guide explains how the rental route compares.
You rely on retirement funds. The qualifier path counts a 401(k) or IRA at 90% under age 59½ and 100% from 59½ on. The depletion path counts retirement accounts at 70% at any age. Age therefore matters on one path and not the other. Tax treatment varies; consult a qualified professional before relying on any retirement withdrawal.
You have employment or pension income too. On the depletion path, asset-derived income may supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. The qualifier path has no income test to supplement.
Your assets are new. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning on the depletion path. Money that moved last week usually does not count.
Your balance is large but not large enough. The depletion path needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, liquid assets can never fall below $250,000. A big loan can need big assets even when the math looks fine.
You are a first-time investor. On the depletion path, a first-time investor needs a 700 score. A housing event, such as a foreclosure, needs 4 years of seasoning on that path. Multiple bankruptcies are not eligible.
Leverage and Loan Size
Leverage is where the two paths separate most for refinances and rentals. Every figure here is through select programs, subject to underwriting.
On the qualifier path, leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out is allowed on this path is set by the lender and is not published. Loans reach $4,000,000. Reserves are not required at or below 75% loan-to-value, and above that the lender sets them.
On the depletion path, a principal residence or second home can reach 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. Loans run from $125,000 to $3,500,000. No reserve months are published.
If your assets cover the loan, the qualifier path has no leverage advantage on a purchase of a home, since both paths cap a principal residence or second home purchase at 80%. If your assets fall short of the loan, depletion is the only one left.
What the Rules Say, Briefly
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. Federal rule text on business-purpose credit turns on the loan’s purpose and occupancy facts, not the property type alone. Asset-based mortgages for principal residences and second homes are consumer loans, so a different frame applies. The federal ability-to-repay standard allows a lender to rely on verified assets, and it must verify only the amounts it actually relies on, using reasonably reliable third-party records. That is why asset statements are documented on both paths.
North Carolina Specifics
The program figures do not change by state. A North Carolina borrower sees the same percentages, floors and ceilings. Lendmire’s consumer mortgage lending is licensed in 16 states, and North Carolina is one of them.
What changes is the file itself. North Carolina draws retirees relocating in, second-home buyers, and owners selling a business or a house elsewhere. Those profiles tend to hold large balances and modest documented income. The occupancy choice matters most: a principal residence or second home can use either path, while an investment property can only use depletion. Whether a particular loan counts as residential or commercial under North Carolina law depends on its purpose and structure, so that question belongs with a licensed professional, not a general explainer.
When the Answer Is “Both” or “Neither”
Both pass. Compare leverage, seasoning, documentation load and which accounts you would rather leave untouched. Many borrowers prefer qualifier for the lighter documentation. Others prefer depletion when the file has an income need elsewhere.
Neither passes. The usual fixes are a smaller loan, a larger down payment, moving assets to eligible accounts and letting them season, or a different product. A borrower who documents income with deposits may fit a bank statement program. A rental purchase may fit DSCR, where qualification is primarily property-level rental income covering the payment. Select lenders in the network also offer DSCR programs below 1.00 coverage, with leverage and terms adjusted.
What to Bring and What to Ask
Bring recent statements for every account, with two months for each qualifying account on the qualifier path. Bring older statements too if you are testing depletion, since one must be at least 120 days old. Bring a list of everything you expect to put toward the down payment and closing. Bring your age if retirement funds are in play.
Ask the loan officer three questions:
- Which path does my occupancy allow?
- Does the lender’s version of each label match yours?
- If I clear both paths, which one preserves more of my balances?
Frequently Asked Questions
Are asset qualifier and asset depletion the same thing?
Not in this program. Asset qualifier tests whether eligible assets cover the entire loan and documents no income. Asset depletion divides usable assets by 60 months to create qualifying income. Lenders may use the labels differently, so confirm the definition before comparing offers.
Which path gives higher qualifying power?
It depends on the loan and the asset mix. The qualifier path counts brokerage accounts at 100% and allows up to 80% leverage on a purchase, but assets must cover the entire loan. The depletion path discounts securities to 80% and retirement funds to 70%, yet it can work when assets fall short of the loan and debts are light. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does the depletion path still need a debt-to-income review?
Yes. The derived income goes through the debt-to-income test against the housing payment and other debts. The qualifier path documents no income, so the lender’s review rests on the assets.
Can I combine asset income with a paycheck or pension?
On the depletion path, asset-derived income may supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does. The qualifier path does not blend income at all.
Do I have to sell my investments?
No liquidation is required to qualify. The assets are documented and counted, though cash needed for the down payment and closing is set aside first, and cash-out proceeds never count as qualifying assets.
If You Are Qualifying on Assets
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 that arranges these loans through select lenders in its network, and every file is underwritten individually. Paying attention to asset seasoning can help you avoid a transfer made too late.
Lendmire’s asset-based mortgage in North Carolina page presents the program for North Carolina borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages (P&L-only, 1099-only and asset-based paths) through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z § 1026.3, business-purpose exemption
2. Cornell LII, 12 CFR § 1026.43
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 to Buy Before You Sell in Virginia Using an Asset Qualifier Mortgage · How to Document an Indiana Asset Qualifier Mortgage Without an Employer · Reserves vs Qualifying Assets on an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in North Carolina
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
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.