The Quick Read: It depends on the path. On the asset depletion path, funds in a brokerage account count at 80% while cash counts at 100%. On the asset qualifier path, a brokerage balance counts at 100%, the same as savings, but the shares must still be documented and seasoned. A mutual fund and an ETF are treated alike by the programs Lendmire places files with. The real differences are the path, the account type, and the job the money does.
- Qualifier path: brokerage, savings, money market and CDs all count at 100%, subject to underwriting.
- Depletion path: cash and CDs count at 100%, securities at 80%, retirement accounts at 70%.
- Cash to close: unsold shares do not fund a closing. The money has to arrive as cash.
- Fund versus ETF: no program in the network gives one a different credit than the other.
Which Path Are You On?
An asset-based mortgage is a consumer loan for borrowers with large balances and little documented income. Retirees, business sellers, and households living on a portfolio are typical examples. Two paths exist, and a borrower is qualified on one at a time.
The asset qualifier path needs eligible assets, after the credit percentages, to equal or exceed the entire loan. No employment or income is documented. The assets are documented in full.
The asset depletion path takes usable assets, divides them by 60 months, and treats the result as monthly income. That income must carry the housing payment and other debts through the debt-to-income test.
Every figure below names its path. The two tables never blend.
How Much Does a Fund Count Compared With Cash?
On the qualifier path, funds in a brokerage account count the same as cash. On the depletion path, they do not. The gap comes from how each path uses the money: one counts the balance against the loan, the other turns it into income.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Savings or cash accounts | 100% | 100% |
| Certificates of deposit | 100% | 100% |
| Brokerage (funds, ETFs, stocks) | 100% | 80% |
| 401(k) or IRA | 90% under 59½, 100% after | 70% at any age |
| Private stock | Not published | 75% |
| Real-estate equity | Not published | 60% |
Figures are typical ceilings through select programs, subject to underwriting.
Some assets are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles, and pledged or borrowed funds. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender then reviews the source.
Funds that hold niche or concentrated positions, such as a crypto-focused fund, draw extra scrutiny. Don’t assume a broad-market credit applies to them. Ask before you plan around the balance.
Do Mutual Funds and ETFs Get Different Treatment?
No. Both are marketable securities, and across the network they sit in the same bucket as stocks and bonds in a brokerage account. The difference between them is how they trade, not how a lender credits them.
Investor.gov, the SEC’s investor education site, describes both as liquid. Mutual fund shares sell at the next calculated net asset value on a business day. ETF shares sell on the market at the going price during trading hours. FINRA adds that an ETF’s market price can drift from its net asset value during the day. State Street Global Advisors notes that thinly traded ETFs can show wide bid-ask spreads.
Both are liquid, but neither is a fixed-dollar balance. That price movement is the logic behind a haircut on the depletion path. It is also why a lender reviews the most recent statement closely.
One myth is worth correcting. Some borrowers believe ETFs are riskier collateral than mutual funds, or the reverse. In underwriting files we see, the account type and the use of funds matter far more than the wrapper.
What Role Do the Funds Play?
Funds play one of three roles, and the role matters more than the label. They can cover cash to close, serve as the assets that qualify the loan, or become income on the depletion path.
- Cash to close. Unsold shares do not fund a closing. If your down payment and costs must come from the portfolio, shares have to be sold, and the cash has to be in your account before closing.
- Qualifying assets (qualifier path). The credited balance across accounts must cover the whole loan amount. Reserves are not required at or below 75% loan-to-value. Above that, the lender sets them.
- Qualifying income (depletion path). The credited balance divided by 60 months becomes monthly income.
Cash-out proceeds from the new loan never count as qualifying assets on the depletion path. Funds that arrive as gifts or loans are not published as eligible either.
Two Worked Examples
Both examples below use illustrative numbers. The lender’s own calculation governs.
Qualifier path. The loan is $800,000. The borrower holds three accounts:
- Brokerage accounts of $330,000 count at 100%, which is $330,000.
- A 401(k) of $300,000, held under age 59½, counts at 90%, which is $270,000.
- Savings of $200,000 count at 100%, which is $200,000.
Usable assets total $800,000, which matches the loan. The borrower is reviewed on assets alone, subject to underwriting.
Depletion path. The borrower holds $1,500,000 in securities and $300,000 in cash.
- Securities count at 80%, which is $1,200,000.
- Cash counts at 100%, which is $300,000.
- Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income.
That income then has to carry the housing payment and other debts through the debt-to-income test. Moving the securities to cash before applying would raise the credit from 80% to 100%. It would also trigger a sale, which is the tradeoff covered below.
Documentation and Seasoning for Fund Accounts
Expect full statements, every page, for every account you want counted. The qualifier path asks for 60 days of seasoning and two months of statements per account. The depletion path asks for statements at least 120 days old at application plus the most recent one 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.
Large or recent transfers draw sourcing questions. Moving money between accounts the week before you apply can restart the seasoning clock. Do the moving early.
Ownership matters too. The accounts should be in the borrower’s name. Shares that are pledged or margined are encumbered, and the network does not publish pledged or borrowed funds as eligible.
Credit and size limits apply as well. The qualifier path runs from a 600 minimum score, with loans up to $4,000,000. The depletion path follows the lender’s matrix, with loans from $125,000 to $3,500,000. The depletion path also requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset income is the only income, at least $250,000 must be liquid.
Leverage differs by path and property:
- Qualifier path: up to 80% on a purchase and 75% on a refinance of a principal residence or second home.
- Depletion path, principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out.
- Depletion path, investment property: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out.
What Happens If the Market Drops Before Closing?
A falling balance can shrink your credited assets. The lender works from the most recent statement, so a decline between statements and closing can cut the counted amount.
On the qualifier path, assets must cover the entire loan. If you land exactly on the line, as the example above does, a small drop can leave you short. Build in a cushion, or convert part of the portfolio to cash to lock in the value.
On the depletion path, a lower balance means lower monthly income, which tightens the debt-to-income test.
Keep the Portfolio Invested or Sell to Cash?
Keep it invested if you are on the qualifier path and your cash to close is covered separately. Funds already count at 100% there. Selling would only create a cost and, as noted above, restart seasoning on any new account.
The math tilts toward cash on the depletion path. Each dollar in securities earns 80 cents of credit, while a dollar in cash earns the full 100 cents. Converting can lift income by a meaningful amount. It also locks in any gain or loss, and it ends the portfolio’s growth.
Tax treatment varies; consult a qualified professional before selling.
A balanced approach works for many borrowers. Hold enough plain cash for closing and keep the rest invested. Then run both versions of the file side by side before deciding.
Why Agency Rules Do Not Carry Over
You may have read that large agency programs count funds at full value. Fannie Mae’s Selling FAQ describes how that agency treats certain assets for reserves, with no liquidation required. That is one agency’s rule for its own product.
The asset-based programs here set their own credit percentages, and the depletion path applies 80% to securities. Don’t carry an agency figure into this file.
The same caution applies to rental investing. 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 file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Funds there mostly matter for cash to close and reserves, and credit percentages vary by lender.
For an investment property on an asset basis, only the depletion path applies, at the lower leverage shown above.
Key Terms Defined
Haircut: the share of an asset’s balance a lender does not count, which accounts for price swings.
Seasoning: how long funds have sat in an account before the lender will credit them.
Net asset value: the per-share value of a mutual fund, calculated once each business day.
Marketable securities: publicly traded holdings, including stocks, bonds, mutual funds, and ETFs.
Asset depletion: a method that divides usable assets by 60 months to create qualifying income.
Frequently Asked Questions
Do ETFs and mutual funds count at 100% like cash?
On the qualifier path, brokerage balances count at 100%, the same as savings, subject to underwriting. On the depletion path, securities count at 80% while cash counts at 100%. The fund type does not change either figure.
Can I use unsold shares as my down payment?
No. Cash to close has to arrive as cash. Shares that you plan to keep can count toward qualifying assets, but a down payment funded from the portfolio requires a sale first. Plan for the cash to sit in your account before closing.
Does a money market fund count like a money market account?
A money market account counts at 100% on the qualifier path and as cash on the depletion path. A money market mutual fund held inside a brokerage account is generally reviewed as a brokerage balance. Because lenders differ on this point, confirm how your specific holding is treated before relying on it.
How are retirement accounts treated?
On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Balances combine across accounts, subject to underwriting.
What if my portfolio loses value after I apply?
The lender works from your most recent statement, so a drop can reduce the credited amount. A cushion above the required total helps. Converting part of the portfolio to cash is another way to protect the number.
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, and its consumer lending is licensed in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Programs change, and every file is underwritten individually. This is not 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.
Investors who want the broader program framework can review how DSCR loans work.
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. Investor.gov, SEC investor bulletin on mutual funds and ETFs
3. State Street Global Advisors, ETFs vs. mutual funds
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 a Business Owner Use Company Cash to Qualify for an Asset-Based Mortgage? · How Much of Mutual Funds Counts Toward Asset Depletion Income? · Reserves vs Qualifying Assets 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
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.