The Quick Read: Usually all of it. Across the wholesale network Lendmire works with, a certificate of deposit counts at 100% of its balance on both asset-based paths, the same as checking or savings. That 100% is the credit the lender gives the balance, and the lender’s own calculation governs, subject to underwriting.
- Qualifier path: CDs count at 100%, and total eligible assets must cover the whole loan amount.
- Depletion path: CDs count at 100%, then usable assets are divided by 60 months to produce qualifying income.
- Money for the purchase comes out first. A CD used for the down payment cannot also generate income.
- Statements are required. Both paths document the assets, even though the qualifier path documents no income.
- Penalties rarely matter. Early-withdrawal penalties are usually interest-based and are not how the credit is set.
Picture a retired business owner. Her documented income is thin, but she holds a ladder of CDs at several banks. A standard mortgage sees little income. An asset-based file sees a large, stable balance. This page explains how the CD portion of that balance gets counted, where it stops counting, and what to do before you apply.
Lendmire is a mortgage broker. It arranges these loans through select lenders in its network and does not lend directly. Consumer mortgage lending for this program is licensed in 16 states. Every file is underwritten individually, and nothing here is a commitment to lend.
Which Path Are You On?
There are two paths, and a borrower is qualified on one at a time. Name the path whenever you see a number, because the two tables differ.
On the asset qualifier path, eligible assets must equal or exceed the entire loan amount. No employment or income is documented. Through select programs, leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home, with loans up to $4,000,000.
On the asset depletion path, eligible assets become monthly income. The lender takes usable assets, divides by 60 months, and runs the result through the debt-to-income test. That is the share of your monthly income that goes to debts, including the new housing payment. Loans run $125,000 to $3,500,000, subject to underwriting.
Same CD, different job. On one path it helps cover the loan outright. On the other it becomes income. Lendmire’s asset-based mortgage program page lays out both paths side by side.
How Much of a CD Counts, Path by Path
A CD counts at 100% on both paths. Here is how that compares with the other assets in the same program.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Certificates of deposit | 100% | 100% |
| Savings / cash accounts | 100% | 100% |
| Money market | 100% | 100% (cash) |
| Brokerage / securities | 100% | 80% |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
The pattern is simple. Cash and cash-equivalents get full credit. Assets that can fall in value get trimmed. A CD sits with cash because the principal is stable and the lender can see exactly what it is worth.
Lenders do not set these percentages from a federal table. The federal ability-to-repay rule lists certificates of deposit among the assets a lender may consider, and it sets no percentage for them. Each investor’s published program decides the credit, per the CFPB’s Regulation Z commentary. That is why you see different numbers from different lenders. Across the programs Lendmire places files with, CDs are among the easiest assets to document.
The Math, Step by Step
The order of operations matters more than most borrowers expect. Here is the sequence on the depletion path.
1. Gather statements. Each CD needs a statement or certificate showing owner name, balance, and maturity date.
2. Apply the credit percentage. A CD counts at 100%. Securities count at 80%, retirement accounts at 70%.
3. Subtract money leaving the pool. The down payment, closing costs, and any required reserves come out first.
4. Divide by 60 months. The result is monthly qualifying income.
5. Run debt-to-income. That income must carry the housing payment and your other debts.
Here is a worked example. Say you hold $1,500,000 in securities, which count at 80%, or $1,200,000. You also hold $300,000 in cash, which counts at 100%. That is $1,500,000 usable. Divide by 60 months and you get $25,000 of monthly qualifying income. Swap the $300,000 of cash for $300,000 of CDs and the result is identical, because both count at 100%. This is illustrative only, and the lender’s calculation governs.
Now picture the same idea on the qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100%), $300,000 in a 401(k) while under 59½ (90%, or $270,000), and $200,000 in savings (100%). That counts $800,000 of usable assets, which covers the loan on assets alone. A CD in place of the savings would count the same.
One more point trips people up. The assets are counted, not sold. You do not liquidate the CD to qualify.
What Gets Subtracted Before the CD Counts
Any CD you spend on the purchase leaves the pool. This is the overlap that catches careful savers.
Say you have $400,000 in CDs and plan to put some of it toward the down payment. The portion you spend is gone from the income pool. Only what remains is divided by 60. The same goes for closing costs and any reserves a lender requires.
So plan the order. Decide which CDs fund the purchase and which stay behind as income-producing assets. Because partial withdrawals are often not allowed, this can mean breaking one CD whole and redepositing the leftover. A Motley Fool explainer notes that you may have to withdraw, and pay the penalty on, the entire CD. Map this out before you touch anything.
Does an Early-Withdrawal Penalty Shrink the Count?
Not as a rule. The program credits a CD at 100% of its balance, and the penalty is a separate bank-side cost that matters only if you actually cash the CD.
Federal law sets a floor and no ceiling. Within the first six days after deposit, the penalty is at least seven days of simple interest, per the OCC’s HelpWithMyBank. After that, the account agreement controls. Bankrate describes a typical penalty as about 60 days of interest on a one-year CD, or 180 days on longer terms.
Those penalties are mostly interest, so they are small beside principal. The catch: if the penalty exceeds the interest earned, the bank can take the difference from the original deposit. That is a real cost if you plan to break a young CD to fund closing. It is not a reason the lender would cut your counted balance.
Edge Cases That Change the Answer
Some CDs do not count the way a plain bank CD does. These are the questions lenders ask.
Ownership. The owner must be on the loan. A CD held by a business or an LLC counts only to the extent of your ownership share, if at all, and the asset pool is usually personal.
Pledged or borrowed funds. A CD pledged as collateral for another loan, or funded with borrowed money, is not published as eligible on either path. The documented route is moving the money into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Foreign funds and custodial accounts. These are not eligible on the depletion path.
Seasoning. On the qualifier path, funds need 60 days of seasoning and two months of statements per 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 on the depletion path. A CD opened last week with a transfer from a source the lender cannot trace invites questions.
Maturity and rollover. A CD near maturity is cleaner to document. Automatic rollover can lock the funds again, so check the terms on your certificate.
Cash-out proceeds. On the depletion path, proceeds from a cash-out refinance never count as qualifying assets.
Depletion Path Minimums and Leverage
Counting CDs is only half the picture. The depletion path has floors that apply no matter how large your CD balance is.
Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They are never below $250,000 liquid when asset depletion is your only income source. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived.
Leverage on this path depends on the property, subject to underwriting:
| Occupancy | Purchase / rate-and-term | Cash-out |
|---|---|---|
| Principal residence, second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
Credit follows the lender’s matrix on the depletion path, and a first-time investor on this path needs a 700 score. The qualifier path has a published 600 minimum. Housing history of 0x30x12 is the target, and one 30-day late in the last twelve months is considered case by case.
Misconceptions Worth Clearing Up
“A CD is locked, so it doesn’t count.” It counts. A CD is accessible subject to a penalty, and the federal rule names certificates of deposit among assets a lender may consider.
“I have to cash it out.” You do not. Assets are counted for qualification, not liquidated.
“Asset depletion means no debt-to-income test.” Wrong on the depletion path. Assets become income, and the debt-to-income test still runs. On the qualifier path, no income is documented and the review rests on the assets.
“Federal law sets the percentage.” It does not. The percentage is a program guideline.
“No income documentation means no documentation.” The assets are documented on both paths.
CDs Versus Other Assets: What to Do Before You Apply
If you hold a mix of accounts, the depletion path rewards cash and CDs. A brokerage account counts at 80% there, and a retirement account at 70%. Moving money into cash or CDs can raise the counted total. Retirement withdrawals can carry tax and penalty consequences.
Before any move, confirm it with a loan officer. A transfer made just before applying may trigger seasoning questions.
The qualifier path flips the logic. Brokerage and CDs both count at 100%, so there is little reason to restructure. What matters there is total eligible assets against the whole loan.
If you are buying a rental, there is another route to compare. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Asset-based programs look at your balances instead. A cash-heavy investor with a weak-rent property may compare both.
Key Terms Defined
Asset depletion: a method that turns a pool of savings and investments into monthly qualifying income by dividing it over a set number of months.
Asset qualifier: a path where eligible assets must cover the entire loan, and no income is documented.
Divisor: the number of months, here 60, that usable assets are divided by to produce monthly income.
Haircut: the amount a lender trims from an asset’s balance. A securities balance counts at 80% on the depletion path, so the haircut is 20%.
Seasoning: how long funds must sit in an account, with statements, before the lender counts them.
Debt-to-income: the share of monthly income that goes to debt payments, including the new housing payment.
Documenting Your CDs
Gather these before you apply:
- The CD certificate or latest statement showing your name, balance, and maturity date.
- Statements that meet the seasoning window for your path.
- The early-withdrawal terms from the account agreement.
- Proof that no CD is pledged as collateral.
- A paper trail for any recent large deposit.
A clean file is mostly a matter of showing the lender that the money is yours, it has been there, and you can reach it.
Frequently Asked Questions
Do CDs count at full value?
Yes, through select programs in Lendmire’s network. A CD counts at 100% of its balance on both the qualifier path and the depletion path, subject to underwriting. Securities and retirement accounts get trimmed on the depletion path. The lender’s own calculation governs.
Does an early-withdrawal penalty reduce my CD’s value for qualifying?
Not as a rule. The program credits the CD’s balance, and the penalty is a bank-side cost that applies only if you cash the CD. Penalties are usually days or months of interest. They matter most when you plan to break a CD for closing funds.
Can a CD I use for my down payment also count as income?
No. Down payment, closing costs, and reserves come out of the pool before the 60-month division on the depletion path. Only the CDs that remain generate qualifying income.
Do I have to sell or cash out my CDs to qualify?
No. Assets are counted for qualification only. You keep them, though any money you spend on the purchase leaves the counted pool.
Can I use a CD held in my business name?
Usually not in full. Business accounts count only to the extent of your ownership share, and the asset pool is generally personal. Moving the funds into a seasoned personal account in a regulated bank is the documented route.
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.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. 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.
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References
1. CFPB Regulation Z, Section 1026.43
2. Motley Fool, CD early-withdrawal penalty
3. OCC HelpWithMyBank, CD penalties
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Qualifier vs Asset Depletion for an Ohio Retiree · How a 401(k) Counts Toward a Virginia Asset Qualifier Mortgage Under Age 59½ · Can You Buy a California Rental Property on Asset Depletion Income?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.