The Quick Read: Yes, through select asset-based programs, an IRA balance can count toward qualifying while the money stays in the account, so no withdrawal is needed. The IRA is evidence of assets and is never pledged as collateral. On most files the borrower documents the account with statements and the lender discounts the balance according to the program.
- Two paths exist: assets cover the whole loan, or assets are converted into monthly qualifying income.
- On the asset qualifier path, an IRA counts at 90% under age 59½ and 100% at 59½ or older, subject to underwriting.
- On the asset depletion path, retirement accounts count at 70% at any age.
- Both paths document the assets with statements. Neither is a no-documentation loan.
- Pledging the IRA itself as security triggers a taxable distribution. Avoid any lender or advisor who suggests it.
How Can an IRA Count Without a Withdrawal?
A lender can treat an IRA balance as proof that the borrower can carry the loan. The money stays invested. The lender reads the statement, applies a percentage to the balance, and moves on. Nothing leaves the account, so nothing is taxed.
Lendmire arranges these loans as a broker through select lenders in its network. The asset-based mortgage program covers consumer purchases and refinances of a principal residence or second home, subject to underwriting. Consumer lending under this program is licensed in 16 states, and New Mexico is one of them. The program figures below do not change by state.
Here is the line you cannot cross. Counting an IRA is fine. Pledging it is not. The IRS lists using an IRA as security for a loan among its prohibited transaction examples. The statute, restated in the Treasury regulation at 26 CFR 1.408-1, says the portion of the account used as security is treated as distributed to the owner. IRS Publication 590-A adds that the pledged part of a traditional IRA is included in gross income, and the 10% additional tax on early distributions may also apply, which generally means before age 59½.
So a lender that asks for a pledge is creating a tax event. A lender that asks for statements is doing underwriting. Know which one you are talking to.
Which of the Two Paths Fits an IRA Holder?
The asset qualifier path fits a borrower whose eligible assets equal or exceed the entire loan. The asset depletion path fits a borrower who wants the assets turned into monthly income that carries the payment. A borrower is qualified on one path at a time. The tables never blend.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| What it tests | Usable assets at least equal the full loan | Usable assets ÷ 60 months = income |
| Income documented | None | Derived income, run through DTI |
| IRA credit | 90% under 59½, 100% at 59½+ | 70% at any age |
| Purchase leverage | Up to 80% | Up to 80% (primary or second home) |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
Investment property is a narrow case. It is available only on the asset depletion path, where the loan is business-purpose, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor on that path needs a 700 score.
All of this is subject to underwriting, and the figures are ceilings and floors, not offers.
How Does the Asset Qualifier Path Treat an IRA?
The qualifier path counts eligible assets after a credit percentage and asks one question: do they cover the entire loan? If yes, the file is reviewed on assets alone, and no employment or income is documented. Across the wholesale network, this is the cleanest route for a cash-heavy borrower.
Credit percentages on this path: brokerage accounts, certificates of deposit, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Run an illustration. An $800,000 loan with $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) under 59½ (90% = $270,000) and $200,000 in savings (100% = $200,000) counts $800,000 of usable assets. That is reviewed on assets alone. The lender’s own calculation governs, and the arithmetic is illustrative.
Other terms on this path, through select programs:
- Credit score: 600 minimum.
- Seasoning: 60 days, with two months of statements for each qualifying account.
- Reserves: none required at or below 75% loan-to-value. Above that, the lender sets them.
- Cash-out on this path is set by the lender and is not published. Do not plan around it.
The percentages explain why the age line matters. A borrower at 58 gets a 10% haircut on the IRA. The same borrower at 60 gets none.
How Does the Asset Depletion Path Work With an IRA?
The depletion path converts usable assets into monthly qualifying income by dividing by 60 months. That income then has to carry the housing payment and other debts through the debt-to-income test. The IRA counts at 70% at any age.
Haircuts on this path: cash accounts and certificates of deposit 100%, securities 80%, private stock 75%, retirement accounts 70%, real-estate equity 60%.
The illustration: $1,500,000 in securities (80% = $1,200,000) plus $300,000 in cash (100% = $300,000) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income, which then carries the housing payment and other debts through the debt-to-income test. Again, illustrative only.
The minimums are real. 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 depletion is the only income source. Asset income can also supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Statement rules differ from the qualifier path. Statements must be at least 120 days old at application, plus the most recent statement within 45 days. Credit follows the lender’s matrix. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
This path is the main answer for a buyer who wants a personal mortgage on IRA assets. It runs a debt-to-income test, which is the point: the IRA becomes income on paper while staying invested.
Which Accounts Count?
Retirement accounts count on both paths, with different percentages. Everything depends on ownership, access and documentation. A practical read by account type:
| Account | Qualifier path | Depletion path |
|---|---|---|
| Traditional IRA | 90% under 59½, 100% after | 70% |
| Roth IRA | Same as above | 70% |
| 401(k) | Same as above | 70% |
| Brokerage | 100% | 80% (securities) |
| Savings, CDs, money market | 100% | 100% (cash, CDs) |
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 and pledged or borrowed funds are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Joint accounts and non-borrower co-owners are where files stall. The account needs to be in the borrower’s name, with the borrower’s access clear on the statement. A spouse’s account is a conversation to have with the lender before the file goes in, not after.
Withdraw or Leave It Alone?
Leaving the IRA invested is usually cleaner. Withdrawing to show cash creates income, and for a traditional IRA the basis is generally zero, so the distribution is included in income under 26 CFR 1.408-4. Under 59½, the 10% additional tax may stack on top.
| Move | Tax effect | Underwriting effect |
|---|---|---|
| Leave in place, count balance | None | Percentage haircut on the path used |
| Withdraw to show cash | Ordinary income, possible 10% | Cash counts, but you paid to get there |
| Pledge IRA as collateral | Pledged part treated as distributed | Not a legitimate structure |
You may hear a workaround: take a temporary distribution, qualify, redeposit. Skip it. The haircut on the IRA is a smaller cost than a taxable distribution, and asset-based qualifying exists so the borrower does not have to do this.
Tax treatment varies; consult a qualified professional before relying on any outcome.
What Do Underwriters Ask For?
Statements, in full, with every page.
1. Custodian statements for each qualifying account, all pages, showing owner name and balance.
2. For the qualifier path: two months of statements per account and 60 days of seasoning.
3. For the depletion path: a statement at least 120 days old, plus the most recent statement within 45 days.
4. Credit documentation and a property appraisal.
5. A source explanation for any large recent deposit.
What trips files up:
- Large recent deposits without a paper trail.
- Accounts held in a name that does not match the borrower.
- Pledged or restricted funds, which underwriters may exclude.
- Assuming the figures are fixed. Programs change, and every file is underwritten individually.
The consumer mortgage disclosure rules that apply to owner-occupied loans apply to this program. That is not the case for business-purpose investor loans.
New Mexico: Community Property and Signing
New Mexico is one of nine community-property states. That matters at the signing table more than at qualification. The statute at NM Stat. 40-3-13 requires both spouses to join in a mortgage of community real property, with an exception for purchase-money mortgages.
For a refinance of a home you already own, expect the title company to ask about spousal joinder. For a purchase, the exception may apply. Either way, this is a title and signing question, not a bar on using IRA assets. Confirm the details with a title company or attorney. It is not legal advice.
The thing to plan around is the spouse’s IRA. A spouse’s account counts only if the lender can document ownership and access. Raise it early.
What Are the Alternatives?
If the assets are real but the IRA is too small to carry a loan, other routes exist. Documented-income loans work for borrowers whose pay stubs and traditional personal-income documentation tells the story. The bank statement program is for borrowers who document income with deposits. Business-purpose rental financing is a separate DSCR product. A buyer holding a rental in an entity can look at a DSCR path separately, but this article stays on qualifying with assets.
One more distinction worth making. A self-directed IRA that buys property itself is a different structure. The IRA is the buyer, and per one custodian, it may borrow only on a non-recourse basis, since a personal guarantee is a prohibited transaction. That is not what this program does. This program is a consumer mortgage to a person, with the IRA documented as an asset.
Key Terms Defined
Asset qualifier path: A route where eligible assets, after credit percentages, must equal or exceed the whole loan, with no income documented.
Asset depletion path: A route where usable assets divided by 60 months become monthly qualifying income tested through debt-to-income.
Haircut: The share of an account balance that does not count toward qualifying.
Seasoning: How long funds have sat in an account before they count.
Prohibited transaction: An IRA action, such as pledging the account as loan security, that the IRS treats as a distribution.
Vested: Owned outright by the borrower, with no forfeiture risk.
Frequently Asked Questions
Do I have to be retired to use an IRA this way?
No. The program does not require retirement. Age matters only for the percentage: on the qualifier path an IRA counts at 90% under 59½ and 100% after, and on the depletion path retirement accounts count at 70% at any age. Everything is subject to underwriting.
Does a Roth IRA count?
Yes, Roth balances are treated like other retirement accounts: 90% or 100% on the qualifier path depending on age, 70% on the depletion path. The Roth needs to be in the borrower’s name, with statements documenting the balance.
Can a spouse’s IRA count toward my loan?
It can if the lender can document ownership and access, but it needs to be raised before the file goes in. In New Mexico, spousal joinder on title is a separate signing issue. A title company or attorney can confirm what applies to your property.
Can I pledge my IRA to the lender instead?
No. Pledging an IRA is a prohibited transaction, and the pledged part is treated as distributed and taxable. The asset-based approach avoids this by counting the balance rather than pledging it.
Is this a no-documentation loan?
No. Every file is fully underwritten. The assets are documented with statements. What the borrower skips is traditional personal-income documentation, pay stubs and employment verification on the qualifier path.
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 through its asset-based mortgage program, based on your statements, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183.
Lendmire’s asset-based mortgage in New Mexico page presents the program for New Mexico 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 traditional personal-income documentation, 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
2. Cornell LII – 26 CFR 1.408-1
4. Cornell LII – 26 CFR 1.408-4
5. LegalClarity – New Mexico Community Property
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 Co-Borrowers Combine Accounts on a New Mexico Asset Qualifier Mortgage? · How Texas Retirees Qualify for a Mortgage Without a Paycheck · How FIRE Households in New Mexico Get a Mortgage Without Working
Guides: Asset-Based Mortgage in New Mexico
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.