The Quick Read: Yes, through select asset-based programs, subject to underwriting. The IRA balance is verified as an asset and counted at a percentage. It is not cashed out and it is not pledged as collateral. The home or rental is the collateral.
- On the asset qualifier path, eligible assets must cover the entire loan, and no employment or income is documented.
- On the asset depletion path, usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Spending IRA money on the down payment or closing costs is a real withdrawal. Qualifying on the balance is not.
- Program figures are the same for a Michigan borrower as anywhere else. Michigan is one of the 16 states where Lendmire’s consumer mortgage lending is licensed.
Why an IRA Balance Can Qualify You Without a Withdrawal
The lender reads your statement and counts the balance. Nothing moves out of the account. That is the whole mechanic.
Think of it as a verified-asset figure. The IRA stays invested, and the lender applies a percentage to reflect that the money carries tax exposure. Then it either compares the result to the loan amount or converts it to monthly income.
This fits a specific borrower: retirees, people who sold a business, heirs, and households living off a portfolio. Balances are large. Documented income is not. Traditional personal-income documentation or pay stubs would understate what the household can actually afford.
Lendmire is a broker. It places these files through select lenders in its wholesale network. The lender’s own calculation governs, and every file is underwritten individually.
Which Path Fits: Assets Cover the Loan, or Assets Become Income?
Pick one path. A borrower is qualified on one path at a time, and the two tables never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Assets cover the whole loan | Assets become monthly income |
| Income documented | None | Derived income, run through DTI |
| Purchase leverage | Up to 80% | 80% primary or second home; 65% investment |
| Refinance leverage | Up to 75% | 80% rate-and-term; 60% cash-out (primary or second home) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
All of this is subject to underwriting and offered through select programs. These are ceilings and floors, not offers. On the depletion path, an investment property is limited to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Whether cash-out is allowed on the qualifier path is set by the lender, so no figure applies there.
The qualifier path suits a borrower whose liquid and retirement balances exceed the loan. The depletion path suits a borrower who needs the assets to carry the payment as income.
How Much of the IRA Counts?
It depends on the path, and the percentages differ. Name the path every time you read a figure.
On the asset qualifier path, brokerage, CD, money market and savings balances count at 100%. A 401(k) or IRA counts at 90% if you are under 59½ and at 100% at 59½ or older. Accounts combine.
On the asset depletion path, cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
Here is the qualifier math, illustrative only. Say the loan is $800,000. A borrower under 59½ holds $330,000 in brokerage accounts (100%), $300,000 in an IRA or 401(k) (90%, so $270,000 counts) and $200,000 in savings (100%). That totals $800,000 of usable assets and meets the loan on assets alone.
Now the depletion version. Say $1,500,000 in securities counts at 80%, or $1,200,000. Add $300,000 in cash at 100%. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
The lender’s own math governs. Treat both examples as shapes, not quotes.
Why Not Just Pledge the IRA?
Because pledging is itself a taxable event. An IRA cannot secure a loan without consequences.
The IRS lists using an IRA as security for a loan among prohibited transactions. The federal regulation at 26 CFR § 1.408-1 is on the same side of the line. The pledged portion is treated as distributed to the owner. A custodian explainer, Horizon Trust, notes a 10% additional tax usually applies on top of income tax when the owner is under 59½.
So a clean file keeps the lender’s lien on the property only. The IRA is a statement in the package, not a security interest. A 401(k) is a different animal, because a plan loan may be allowed under plan rules. An IRA has no loan feature at all.
Withdraw or Don’t? Where the Line Falls
Qualifying with the balance and funding the closing with it are two separate acts. People blur them, and that causes most of the surprises.
| Action | Is it a withdrawal? | Effect |
|---|---|---|
| Qualify on the IRA balance | No | Account stays invested |
| Pledge the IRA as collateral | Treated as one for the pledged portion | Taxable distribution |
| Use IRA cash for the down payment | Yes | Real distribution, tax consequences |
| Rely on other cash for closing | No | IRA untouched |
Here is the double-counting trap. The same dollars cannot qualify you and also pay your down payment. If $300,000 sits in the IRA and you pull part of it to close, the usable pool shrinks by that amount. A file that qualified on paper can fall short once the closing funds come out.
The fix is simple. Decide before you apply which accounts are qualifying assets and which are closing funds. Keep them separate and documented.
Seasoning, Statements and What Gets Documented
The assets are documented on both paths. No income documentation never means no documentation.
On the qualifier path, expect 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be 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.
The depletion path adds minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are the only income source, liquid assets must never fall below $250,000. If asset income only supplements documented income, it can be used up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Gather these before you apply:
- Statements for every account used, in your name
- Proof the account is vested and you can reach the funds
- Source documents for any recent large deposit
- A clear note on which accounts are closing funds
Moving money between accounts mid-file is where files stall. A transfer creates a new account with no seasoning. Keep balances where they are while the file is open.
Credit and Property Rules That Still Apply
Assets do not replace credit. The qualifier path sets a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700.
Housing history is 0x30x12. 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. Nothing here removes the credit check.
This is a consumer mortgage, so TRID disclosures apply. That differs from investor financing, which is covered below.
What Does Not Count
Several asset types are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share. Do not assume 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. On the depletion path, custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are also out.
If the Property Is a Rental
Investment property is allowed only on the depletion path, with the lower 65% and 60% leverage. That is a real cost for a buyer who wants a rental. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Most pure rental purchases move to a different product. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Personal income is not the test, so an IRA rarely matters beyond showing funds for the down payment and any reserves. Read Lendmire’s complete DSCR loans guide for how that path works.
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. The CFPB’s Regulation Z provision treats credit to acquire non-owner-occupied rental property as business purpose.
Buying through a self-directed IRA is a separate structure. The IRA itself owns the property, financing must be non-recourse, and debt-financed income can trigger extra tax. That is not a standard borrower-owned file, and Lendmire does not describe it as an available product here.
Related Reading on Asset-Based Qualifying
For larger loans, see How to Use Retirement Assets to Qualify for a Jumbo Mortgage.
Key Terms Defined
Asset qualifier path: A program where eligible assets must equal or exceed the whole loan and no income is documented.
Asset depletion path: A program that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The percentage reduction applied to an account because of tax and market exposure.
Seasoning: The length of time funds have sat in your account, shown by statements.
Vested: Money that belongs to you outright and that you are able to reach.
Frequently Asked Questions
Do I have to be retired to use IRA assets?
No. The programs above do not require retirement. On the qualifier path, the percentage counted depends on age: 90% under 59½ and 100% from 59½. On the depletion path, retirement accounts count at 70% at any age.
Does a Roth IRA count?
Retirement accounts count under both paths, subject to underwriting. The program figures above do not split Roth from traditional, so the lender’s review of your specific statement decides.
Is qualifying on my IRA a taxable event?
Qualifying on the balance is not a withdrawal. Cash you take from the IRA for a down payment is. Tax treatment varies; consult a qualified professional.
Can I use my IRA and my spouse’s IRA together?
Accounts combine on the qualifier path. Ownership and access rules still apply, and the lender decides how a spouse’s account is handled based on the file and who is on the loan.
What if the market drops before the loan is finished?
The statement figures drive the count. A balance that falls after the statement date can change the result, so lenders review the most recent documents. Leave a cushion above the minimum if your accounts are market-invested.
Does Michigan change the program rules?
No. The figures are the same in every licensed state. Michigan taxes, insurance and local prices are context for your budget, not program parameters.
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 or request a quote.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan 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. IRS – Retirement topics: Prohibited transactions
3. Horizon Trust – Borrowing against an IRA
4. CFPB – Regulation Z § 1026.3
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 Big Can an Assets-Only Mortgage Be? · Can Equity in a Rental Property Help You Qualify for an Asset-Based Mortgage? · Can You Get a HELOC With No Income by Qualifying on Assets?
Guides: Asset-Based Mortgage in Michigan
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.