The Quick Read: Shrink the loan amount, or grow your eligible balances, until your usable assets, after each account’s credit percentage, equal or exceed the entire loan on the asset qualifier path, which qualifies the file on assets alone, without documenting employment or income, subject to underwriting. The test is a straight comparison of one number to another. Every change you make moves one side of it.
- On the asset qualifier path, counted assets must equal or exceed the whole loan.
- Brokerage, CD, money market and savings balances count at 100%. Retirement balances count at 90% under age 59½ and 100% at 59½ or older.
- Cutting the loan helps only if the cash you move around does not also shrink the balances you are counting.
- The asset depletion path is a different test. It turns assets into monthly income and runs that income through a debt-to-income review.
- Every figure here is a ceiling or floor through select programs, subject to underwriting. The lender’s own calculation governs.
Which Path Are You On?
Two programs share the name, and mixing them up wastes time. Across Lendmire’s wholesale network, the asset qualifier path asks whether your eligible assets cover the whole loan. The asset depletion path asks whether your assets, converted into monthly income, can carry the payment and your other debts. A borrower is qualified on one path at a time.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Assets cover the entire loan | Assets ÷ 60 months = income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% | Up to 80% primary or second home; 65% investment |
| Loan range | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property types | Primary and second homes | Also investment property |
If your balances are large and your documented income is thin, you are the reader these programs were built for. Retirees, people who just sold a business, inheritance recipients, and households living on a portfolio fit this profile. This article focuses on the qualifier path, because “lower the loan until assets cover it” describes that test. The depletion path gets its own section below.
Key Terms Defined
Usable assets: the balances left after each account’s credit percentage is applied. A $100,000 account that counts at 90% adds $90,000.
Credit percentage (haircut): the share of an account’s balance a program lets you count. Accounts that can lose value or carry withdrawal penalties are counted at less than 100%.
Seasoning: how long funds have sat in an account. On the qualifier path, that means 60 days and two months of statements for each qualifying account.
Reserves: cash a lender wants left after closing. On the qualifier path, none are required at or below 75% loan-to-value. Above that, the lender sets them.
Loan-to-value (LTV): the loan amount divided by the property’s value.
Qualifying income: on the depletion path, usable assets divided by 60 months.
What Counts Toward the Total
On the qualifier path, cash-like and brokerage balances count at 100%. That covers brokerage accounts, certificates of deposit, money market accounts and savings. Retirement accounts, meaning 401(k) and IRA balances, count at 90% if you are under 59½ and 100% once you reach 59½. Your accounts combine, so three smaller balances can add up to one qualifying total.
Some assets do not count as published. Cryptocurrency, precious metals, collectibles, borrowed or pledged funds, and business accounts beyond your ownership share are not listed as eligible. The documented route is converting them to a seasoned cash balance in a regulated account. The lender then reviews where the money came from.
The property you are buying cannot be the asset either. Equity in the home being financed never counts toward your ability to repay.
Step by Step: Shrinking the Loan Until Assets Cover It
Run the math the way an underwriter would. Do it in this order.
1. List every account you might count, with its balance and type.
2. Remove what will not count. That includes borrowed funds, gifts, business money you do not own, and anything not seasoned for 60 days.
3. Apply the credit percentages. Multiply each balance by its percentage.
4. Add the results. That total is your usable assets.
5. Compare the total to the loan. If usable assets are equal or higher, the asset test is met. If they are lower, you have a gap.
6. Close the gap by lowering the loan, adding eligible balances, or both. Then run steps 3 to 5 again.
Here is a worked example. The accounts are modeled assumptions, and the lender’s own calculation governs. Say you hold $330,000 in brokerage accounts, $300,000 in a 401(k) and $150,000 in savings, and you are under 59½. The brokerage counts at 100%, which is $330,000. The 401(k) counts at 90%, which is $270,000. Savings count at 100%, which is $150,000. Your usable assets are $750,000.
| Round | Loan | Usable assets | Result |
|---|---|---|---|
| 1 | $800,000 | $750,000 | $50,000 short |
| 2 | $800,000 | $800,000 (savings raised by $50,000) | Covers |
| 3 | $750,000 | $750,000 | Covers |
Round 1 fails. Round 3 fixes it by trimming the loan, which usually means a lower purchase price or a larger down payment. Round 2 fixes it by adding $50,000 of seasoned, eligible balance. Both reach the same answer from opposite sides of the equation.
Why a Bigger Down Payment Does Not Always Help
A larger down payment shrinks the loan. It also moves cash out of your accounts. If the same accounts supply the down payment and count toward the loan, you may be shrinking both sides of the test at once.
Picture a $1 reduction in the loan. It raises your cash to close by $1. If that dollar came from a counted account, usable assets drop by up to $1 as well. The gap has not closed. It has only moved.
Two questions settle this with a lender:
- Are balances counted before or after the funds for closing leave the account?
- Is the requirement a fixed sum, or does it scale with the loan?
The answers differ by program, which is a good reason to compare several. A lender that counts balances as they stood before closing treats your file very differently from one that counts only what remains. Seeing many guidelines side by side is the practical advantage of working through a wholesale network.
A cleaner fix is to bring the purchase price down, so the loan and the down payment can both shrink without leaning harder on the same accounts. Another is to keep leverage at or below 75% loan-to-value, which removes the reserve requirement on this path. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Other Levers Besides a Smaller Loan
A smaller loan is one lever among several. Each has a cost.
| Lever | What it does | Tradeoff |
|---|---|---|
| Lower price | Shrinks loan and down payment | Fewer homes to choose from |
| Add eligible assets | Raises the total directly | Needs 60 days of seasoning |
| Move funds to cash | Lifts a 90% account to 100% | May trigger a penalty or tax |
| Wait until 59½ | Retirement balances reach 100% | Depends on your timeline |
| Switch to depletion path | Changes the test to income | Different leverage and minimums |
On moving funds, tax treatment varies, so consult a qualified professional before selling investments to raise cash.
Waiting until 59½ moves your retirement balances from 90% to 100%. On a $300,000 account, that is a real difference to the total. It only works if your timeline allows it.
Back-Solving From Your Assets
You can also work backward. Add up your usable assets, using the same credit percentages as above. That total is the largest loan the asset test supports on this path.
From there, the price follows from leverage. On a purchase, the qualifier path allows up to 80% loan-to-value, so the loan is at most 80% of the value. On a refinance of a principal residence or second home, the ceiling is 75%. Divide your maximum loan by those percentages to find the value range you can shop in. Your down payment also has to come from somewhere, and that question loops back to the circularity above.
Where the General Rule Breaks
The simple version (“assets cover the loan, done”) has edges.
Same dollar, two jobs. Some programs want reserves on top of the assets that qualify you. Others let one dollar do both jobs. Above 75% loan-to-value the lender sets reserves, so ask before you assume.
Borrowed funds. Money you borrowed against an account or against another asset is not eligible. If a loan secured by an account reduces its balance, expect the lender to count the net figure.
Retirement accounts. The age threshold matters. Under 59½, balances count at 90%. At 59½ or older, they count at 100%. On the depletion path, retirement accounts count at 70% at any age.
Real-estate equity. It counts on the depletion path at 60%, but not on the qualifier path. The home being financed never counts on either one.
Statements. Each qualifying account needs two months of statements. A balance that arrived last week, and cannot show 60 days of history, does not count yet.
Credit. A 600 minimum score applies on the qualifier path, subject to underwriting. Multiple bankruptcies are not eligible. A first-time investor on the depletion path needs 700.
The Depletion Version of the Same Problem
On the asset depletion path, you do not need assets to equal the loan. You need assets that convert to enough monthly income. The conversion is usable assets divided by 60 months.
Take $1,500,000 in securities plus $300,000 in cash, which is $1,800,000 in total holdings. Securities count at 80%, so $1,200,000 of the $1,500,000 is usable. Cash counts at 100%, so the full $300,000 is usable. That makes $1,500,000 usable, divided by 60 months, for $25,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
Here, lowering the loan means lowering the housing payment relative to that income. Paying off other debts helps for the same reason. The path also has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is your only income source. Asset-derived income may also supplement documented income up to a 45% debt-to-income ratio, and in that case the minimum-assets rule is waived.
Leverage differs too. On the depletion path, a principal residence or second home allows up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets.
“No Income Documentation” Is Not “No Documentation”
You will not document employment or income on the qualifier path, but you will document every asset you count. The federal ability-to-repay rule allows a lender to base its decision on assets other than the dwelling that secures the loan, and it requires verification using third-party records. In practice, that means statements for every account. The same rule text is available through Cornell’s Legal Information Institute. The rule does not set a debt-to-income threshold or an asset minimum, so each program sets its own.
When This Is the Wrong Tool
If you are buying a rental, check the occupancy first. The asset qualifier path covers principal residences and second homes. Investment property is available only on the depletion path, and at lower leverage than the other occupancy types.
For a pure rental purchase, DSCR financing is usually the better match. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and it is built for business-purpose investor loans. Borrowers who document income with deposits may fit a bank statement program better. Lendmire’s complete DSCR loans guide walks through how those programs compare.
Borrowers worried about selling investments to qualify should see whether you have to liquidate assets to reserve a loan.
What to Prepare Before You Test a Lower Loan
Line these up before you ask a loan officer to run the numbers:
- Two months of statements for every account you plan to count
- A record of when each balance arrived, to show 60 days of seasoning
- Your age, since it sets the retirement percentage
- The purchase price range you are willing to consider
- A list of debts secured by any of those accounts
- Your credit profile, since 600 is the floor on the qualifier path
Ask the loan officer one blunt question: where does the closing cash sit in the formula? The answer tells you whether a smaller loan really closes your gap.
Frequently Asked Questions
Do I need other income to use an asset qualifier mortgage?
No employment or income is documented on the qualifier path. The file is reviewed on assets alone, subject to underwriting and credit review. Your assets are documented in full, though, and the lender still reviews your credit and housing history.
Do retirement accounts count?
Yes, on both paths, at different percentages. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age.
Does a bigger down payment always fix a shortfall?
Not always. A larger down payment cuts the loan, but it also pulls cash from your accounts. If those accounts are the ones being counted, the gap may stay the same. Adding seasoned balances or lowering the price tends to work more reliably.
Is there a minimum asset amount?
On the qualifier path, the requirement is that usable assets equal the full loan, with loans up to $4,000,000. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is your only income source.
What if the value of my investments drops before closing?
A drop lowers the balance on your statements and therefore your usable assets. Lenders review the statements they receive, so a thin cushion is a risk. Many borrowers build in a margin above the loan amount for this reason.
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 mortgage broker that arranges these loans through select lenders in its wholesale network, with consumer mortgage lending in 16 states. Program figures change, every file is underwritten individually, and nothing here is a commitment to lend.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose traditional personal-income documentation understates their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB Regulation Z, 12 CFR 1026.43
2. Cornell Legal Information Institute, 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: Can Cryptocurrency Count Toward an Asset Qualifier Mortgage? · Does a Late Mortgage Payment Disqualify You From an Asset Qualifier Loan? · Does an IRA Count on an Asset Qualifier Mortgage?
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
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.