LTV Is Determined On An Asset Depletion Mortgage By Loan Tier — The Quick Read: Loan-to-value on an asset depletion file steps down as the loan gets bigger, and it steps down differently by occupancy. A primary residence gets the most leverage, a second home gets less, and an investment property gets the least at almost every size. Across a wholesale non-QM network, purchase leverage on a primary residence commonly starts at its highest point for the smallest loan sizes and tapers progressively lower as the loan climbs into the millions, with everything above $4,000,000 reviewed case by case before it goes to submission.
That’s the short version. The rest of this comes down to how the tiers actually break, what moves the divisor separately from the LTV cap, and where the ladder changes shape entirely once a file crosses into eight-figure territory.
Key Terms Defined
Asset depletion (also called asset utilization or asset dissipation) is a way to qualify for a mortgage using liquid assets instead of a paycheck — the lender divides eligible assets by a set number of months to produce a monthly income figure.
Loan-to-value (LTV) is the loan amount divided by the property’s value or purchase price, expressed as a percentage — a lower LTV means more equity or down payment in the deal.
Divisor is the number of months a lender divides eligible assets by to create qualifying income. A shorter divisor produces more monthly income from the same asset pool; a longer divisor produces less.
Haircut is a discount applied to certain asset types — retirement accounts especially — before they enter the depletion formula, reflecting withdrawal penalties and volatility.
Debt-to-income (DTI) is the borrower’s total monthly debt obligations divided by qualifying income. The imputed income from an asset depletion calculation typically feeds directly into this ratio.
Reserves are liquid funds a borrower must have left over after closing, usually expressed in months of housing payment, to cover the mortgage if income disruptions happen.
What Actually Sets the LTV Tier
The loan amount is the single biggest lever. Across the wholesale programs Lendmire places files with, leverage on a primary residence tops out at 90% for loans between $300,000 and $1,000,000, with a 680 credit floor. Move up to $1,000,000–$1,500,000 and purchase leverage steps to 85%, with the credit floor rising to 700. From $1,500,000 to $2,000,000, purchase stays at 85% but the credit floor climbs again to 720.
That pattern — LTV compresses, credit floor rises — repeats at every tier increase. It’s not a coincidence. Bigger loans carry more absolute dollar exposure, so investors in the network ask for a thicker equity cushion and a stronger credit file as compensation. Occupancy sets a parallel track: a second home or investment property runs roughly five points lower than a primary residence at comparable sizes, because a borrower under financial stress protects the home they live in first.
Here’s how that plays out through $4,000,000, where the loan tier and occupancy interact most:
| Loan Size | Primary Residence | Second Home | Investment Property |
|---|---|---|---|
| $300K–$1M | 90% (680+ credit) | 85% (700+) | 85% (700+) |
| $1M–$1.5M | 85% (700+) | 80% (680+) | 80% (680+) |
| $1.5M–$2M | 85% (720+) | 80% (700+) | 80% (700+) |
| Loan Size | Primary Residence | Second Home | Investment Property |
|---|---|---|---|
| $2M–$2.5M | 80% (720+) | 80% (720+) | 80% (720+) |
| $2.5M–$3M | 80% (720+) | 75% (720+) | 75% (720+) |
| $3M–$3.5M | 75% (720+) | 65% (760+) | 60% (680+) |
| $3.5M–$4M | 75% (760+) | 65% (760+) | 60% (680+) |
Notice the investment-property column falls off faster than the second-home column past $3,000,000. That’s an occupancy-risk overlay, not a documentation issue — non-owner-occupied properties are the first thing a lender’s credit committee tightens once the loan gets large. Every figure here is a ceiling through select wholesale programs, subject to full underwriting — not a promise.
What Happens Above $4 Million?
Above $4,000,000, nothing on this ladder is automatic. Every file gets reviewed case by case before it’s even submitted to a lender. Purchase leverage on a primary residence in the $4,000,000–$5,000,000 band commonly lands around 65%, requiring a 760 credit score, then drops to roughly 60% for $5,000,000–$6,000,000 at a 680 floor. Second home and investment leverage sit a few points below that at the same sizes.
Past $6,000,000, the portfolio non-QM program in the network stops carrying files, and a separate bank portfolio program takes over on twelve-month bank statements alone — with its own ladder running 65% to $5,000,000, 60% to $10,000,000, and 55% out to $30,000,000, interest-only capped at 60% or the band’s ceiling, whichever is lower. That program overlaps the portfolio program between $4,000,000 and $6,000,000, then stands alone above it. There’s no single “max LTV” answer once a file gets this large — the honest answer depends on the borrower’s asset pool, property type, and which program actually fits the file, decided loan by loan.
Why the Divisor Isn’t the Same Lever as the LTV Cap
This is where most investors get confused. The divisor decides how much monthly income an asset pool produces. The LTV cap decides how much loan the property can support. They’re set independently, and a strong number on one doesn’t buy room on the other.
Within the asset-allowance path used across the network, liquid assets get divided by 36 months when the file is supplemental and overall DTI sits at or below 60%, by 60 months when DTI runs above that, or by 84 months when the asset income is standing in for the whole file, or on any loan above $3,500,000. That path caps at 80% LTV and applies to primary residences and second homes only. A borrower with a big enough asset pool to clear the 84-month divisor comfortably still doesn’t unlock more than 80% — the LTV ceiling for that path is fixed regardless of asset surplus. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
There’s also an assets-only route with no DTI calculation at all: it requires U.S. liquid assets equal to the loan amount, plus closing costs, plus sixty months of any net loss carried on other residential property. That’s a liquidity test, not an income test, and it exists for borrowers who would rather prove they can cover the loan outright than run the depletion math.
Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Counts, and What Gets a Haircut
Not every dollar in a brokerage account enters the depletion formula at full value. Checking and savings typically count at full value. Retirement accounts count at 70% under the network’s guidelines, rising to 80% once the borrower is 59.5 or older, reflecting early-withdrawal penalties on younger accounts. Business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward the asset pool at all.
Market disclosures give a sense of how much this varies lender to lender. In one securitization exhibit filed with the SEC, an investor’s asset-utilization guidelines counted IRA balances at 60% for a borrower under retirement age, stock accounts at 70%, and personal checking or savings at 100% — a different haircut schedule than the network figures above, filed by a different investor entirely. No two programs apply the same discount, which is exactly why shopping this loan type by asking a single source for “the max LTV” produces an incomplete answer.
For a rental-property buyer specifically, worth knowing: what an asset depletion mortgage is and how it functions as a personal-qualification tool matters more once the property side of the file is being underwritten separately. DSCR loans, by contrast, qualify primarily on the property’s own rental income covering the payment, subject to lender guidelines — not the borrower’s balance sheet at all. Lendmire’s complete DSCR loans guide walks through that qualification path for investors comparing the two routes side by side.
Reserves, Cash-Out, and the Fine Print That Moves With Size
Reserve requirements climb with loan size the same way LTV compresses. Across the network, files under $500,000 typically need 3 months of reserves; up to $1,500,000, that rises to 6 months; above $1,500,000, it’s 9 months, plus 2 additional months for every other financed property the borrower carries, capped at 12 months. First-time real estate investors are held to 12 months regardless of size.
Cash-out follows its own ceiling. On the portfolio program, cash-out proceeds are effectively unlimited at or below 60% LTV, but capped at $1,500,000 cash-in-hand above that line. The bank portfolio program publishes no cap of its own. Above $3,500,000 on a primary residence and $3,000,000 on a second home or investment property, super-jumbo overlays kick in: a 700 credit floor, no history of late housing payments in the prior two years, 48 months of seasoning past any credit event, and cash-out proceeds can’t be counted toward the reserve requirement. Files sized above the standard super-jumbo bank statement line tend to see this overlay stack apply in full.
Common Misconceptions
A larger asset cushion doesn’t automatically buy a higher LTV tier. It improves the qualifying income and the DTI math, but the LTV ceiling for a given loan size and occupancy is fixed — surplus assets beyond the minimum don’t move it.
Retirement accounts don’t count dollar for dollar. A $500,000 IRA isn’t treated the same as $500,000 sitting in checking; the haircut applies before the divisor does.
There’s no single industry-standard divisor. Every non-QM investor sets its own, and it isn’t negotiable within a given published program once set.
Asset depletion isn’t the same product as DSCR financing. One substitutes a balance-sheet figure for personal income; the other is reviewed on the property’s own rent. They can be combined, but they’re answering different underwriting questions.
For deeper background on the mechanics discussed here, see Consumer Financial Protection Bureau — eCFR 12 CFR 1026.43.
Frequently Asked Questions
Does a bigger down payment always unlock a better LTV tier on asset depletion?
No. The LTV ceiling is set by loan size, occupancy, and credit tier, not by how much surplus asset cushion sits above the minimum needed to qualify. A borrower can be asset-rich and still land in the same LTV band as someone who barely clears the depletion math, because the down payment itself doesn’t change which tier the loan falls into.
Can asset depletion be used on an investment property?
Within the network, the asset-allowance divisor path is limited to primary residences and second homes. Investment-property files typically rely on DSCR lender review instead, using the property’s own rental income, subject to lender guidelines and full underwriting.
Why does the credit score floor rise as the loan gets bigger on the same program?
Larger loans carry more absolute dollar risk, so lenders in the network ask for stronger credit as a compensating factor. It’s the same logic behind falling LTV — size and risk move together, and credit is one of the levers used to offset it.
Is there a hard cap on how large an asset depletion loan can get?
Through the wholesale programs Lendmire works with, loan sizes run from $300,000 up to $30,000,000, with the portfolio program carrying files to $6,000,000 and a separate bank portfolio program handling twelve-month bank statement files up to $30,000,000 on its own ladder. Everything above $4,000,000 is reviewed case by case before submission.
What happens if a borrower’s assets barely clear the depletion formula?
That file usually gets pushed into a lower LTV tier or a higher reserve requirement, because there’s less margin if the asset pool underperforms or gets drawn down. A thin asset cushion is treated as a compensating-factor gap, similar to a lower credit score.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
If you’re weighing an asset depletion mortgage against a DSCR loan for a rental purchase, Lendmire can help compare leverage, documentation, and reserve requirements across the wholesale programs it works with, based on your actual asset pool and property goals. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 40 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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. SEC EDGAR — VMC Asset Depositor LLC, Form ABS-15G exhibit
2. Consumer Financial Protection Bureau — eCFR 12 CFR 1026.43
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.
