The Quick Read: Usually, yes: a Pennsylvania buyer can qualify on IRA balances without taking a withdrawal, as long as the IRA is documented with statements and counted as an asset rather than pledged as collateral, and the buyer fits one of two asset-based paths, subject to underwriting. The IRA stays invested and in your name the whole time. It simply proves what you have.
- On the asset qualifier path, eligible assets must cover the entire loan amount, and no employment or income is documented.
- On the asset depletion path, usable assets divided by 60 months become qualifying income that has to carry the housing payment.
- IRA balances count at 90% under age 59½ and 100% at 59½ or older on the qualifier path, and at 70% at any age on the depletion path.
- You do not need to show traditional personal-income documentation, pay stubs or employment verification, but statements, credit and an appraisal are required.
Across the wholesale network Lendmire works with, this is a niche that suits retirees, business sellers, people who received an inheritance or settlement, and households living off a portfolio. Their balances are large and their documented income is small. A Pennsylvania borrower sees the same program figures as anyone else, since Pennsylvania is one of the 16 states where Lendmire’s consumer mortgage lending is licensed. Every figure below is a ceiling or floor, not an offer, and every file is underwritten individually.
Which Path Fits You?
Pick the path first, because the two paths use different math and a borrower is reviewed on only one at a time. The qualifier path asks whether your assets cover the whole loan. The depletion path asks whether your assets, converted to monthly income, can carry the payment.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% LTV | Up to 80% (home), 65% (investment) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
The leverage figures above for the depletion path apply to a purchase on a principal residence or second home (80%) and on an investment property (65%). LTV, short for loan-to-value, is the loan balance divided by the property’s value.
If your portfolio is big compared with the loan, the qualifier path is usually the simpler fit. If your portfolio is solid but the loan is large relative to it, depletion may work better because it only needs the converted income to carry the payment. Lendmire’s asset-based mortgage programs cover both, and the file is placed with select lenders that review each one on its own terms.
How Much of Your IRA Actually Counts
Your IRA almost never counts dollar for dollar. Lenders apply a percentage to each account type, and the percentage differs by path. Plan around the usable amount, not the statement balance.
On the asset qualifier path, through select programs, the credit looks like this:
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% if you are under 59½, and at 100% at 59½ or older.
- Accounts combine, so a mix of IRA, savings and brokerage can add up to the loan amount.
On the asset depletion path, the percentages are lower:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80% and private stock at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Some assets do not count on either path. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are out on the depletion path. Cryptocurrency, precious metals and collectibles are not published as eligible on either path. The documented route for those holdings is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
Cash-out proceeds from a refinance never count as qualifying assets on the depletion path.
Two Worked Examples
Both examples below are illustrative. The lender’s own calculation governs, and nothing here is an offer.
Qualifier path. Say you want an $800,000 loan and hold three accounts:
- Brokerage accounts: $330,000, counted at 100%, so $330,000.
- A 401(k), with you under age 59½: $300,000, counted at 90%, so $270,000.
- Savings: $200,000, counted at 100%, so $200,000.
That adds up to $800,000 of usable assets, which equals the loan. The file is reviewed on assets alone, with no income documented. If you were 59½ or older, the retirement balance would count at 100%, leaving more cushion.
Depletion path. Now say you hold $1,500,000 in securities and $300,000 in cash.
- Securities at 80% count as $1,200,000.
- Cash at 100% counts as $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 your other debts through the debt-to-income test. Debt-to-income, or DTI, compares your monthly debts with your monthly income. Notice that the securities took a 20% haircut. An IRA in the same position would take a 30% one.
Where depletion is your only income source, the program wants qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid. Asset-derived income can also supplement documented income, such as a pension, up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
Why You Can Count an IRA but Not Pledge It
This is the question behind the title. The rule is simple: showing an IRA is allowed, pledging it is not. Federal tax law treats using an IRA as security for a loan as a withdrawal. IRS Publication 590-B lists using an IRA as security for a loan as a prohibited transaction. It adds that the pledged part is treated as a distribution included in your gross income. The federal regulation on IRAs repeats the same pledging rule.
That is why a lender reviewing your IRA statement is different from a lender taking a lien on it. In an asset-based mortgage, the IRA is evidence. The note and mortgage name only the property. No control agreement is placed on the account, and nothing is liquidated. The statement shows ownership and a balance, the lender applies its percentage, and the account stays where it is.
Practically, here is what to watch for:
- If any lender asks you to pledge, assign or freeze the IRA as a condition of the loan, stop and ask why. That is a structure to avoid.
- If a lender asks you to move IRA money into a regular account first, you are taking a distribution. That is a different decision with its own consequences.
- Tax treatment varies; consult a qualified professional before relying on any of this.
Ways to Use an IRA Toward a Home, Compared
The qualifying route changes what happens to the money. Here is how the common options stack up for someone who wants to keep retirement funds invested.
| Option | IRA withdrawal needed? | Main trade-off |
|---|---|---|
| Counted as an asset (qualifier) | No | Assets must cover the entire loan |
| Converted to income (depletion) | No | 70% credit; DTI test applies |
| Withdraw and spend it | Yes | Money leaves the account |
| Pledge as collateral | Treated as one | Counts as a taxable distribution |
The first two rows are the point of this article. The last two are what most people picture, and they carry the costs the first two avoid. A buyer who is reviewed on assets keeps the account compounding and keeps a distribution off the tax return for the purchase year.
Seasoning and Statements: What the Lender Will Ask For
The assets are fully documented. The absence of traditional personal-income documentation, pay stubs and employment verification does not mean the absence of paperwork. Each path has its own rules.
- Qualifier path: 60 days of seasoning, with two months of statements for each qualifying account.
- Depletion path: statements 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.
Beyond statements, expect an appraisal, a credit review and proof you own the accounts. On the qualifier path, credit starts at a 600 minimum score. On the depletion path, the lender’s matrix sets the score. A first-time investor buying an investment property on the depletion path needs 700.
Housing history is reviewed too. The program looks for 0x30x12, meaning no 30-day lates in the last twelve months. One late is considered case by case. Multiple bankruptcies are not eligible, and a housing event such as a foreclosure needs 4 years of seasoning on the depletion path.
Large deposits need a source. A deposit from an unexplained origin can be excluded, which can leave you short of the loan amount. If you are shifting money between your own accounts, keep the trail clear.
Key Terms Defined
Asset qualifier: a path where eligible assets, after the credit percentages, must equal or exceed the entire loan.
Asset depletion: a path that divides usable assets by 60 months to create a qualifying monthly income.
Haircut: the percentage of a balance the lender does not count, which reflects liquidity and market risk.
Seasoning: the amount of time funds must sit in your account before they count.
Debt-to-income (DTI): your monthly debts compared with your monthly income, used to test whether you can carry the payment.
Prohibited transaction: an action involving an IRA that federal tax law forbids, such as pledging it as security.
Edge Cases Worth Knowing
Under 59½. On the qualifier path, your IRA counts at 90% instead of 100%. On the depletion path, retirement accounts count at 70% regardless of age. Your age affects the credit, not your eligibility.
IRA annuities. The same federal publication says borrowing against an IRA annuity contract makes its fair market value taxable. Your statements can still show the balance. The loan just cannot be secured by the contract.
A self-directed IRA buying property. This is a separate structure where the IRA itself is the buyer. It requires non-recourse financing and usually a specialized custodian. It does not fit the personal-borrower paths here, so a borrower in this situation should speak with a custodian and a tax professional first.
Buying an investment property. The asset depletion path accepts investment property at lower leverage: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. The loan is business-purpose, not consumer. If the rental’s income should carry the loan, that is a rent-coverage loan instead, and a different conversation. Lendmire arranges either, but the title question here is about qualifying on assets.
Joint ownership. If an account is held with someone who is not on the loan, the lender may not count it. If an account sits in a trust, expect extra review. Put these questions to your loan officer before you apply, not after.
Market swings. IRAs invested heavily in stocks move with the market. A balance that drops between statements can shrink your usable assets. A cushion above the minimum protects you.
What About Pennsylvania?
Nothing in the program changes at the state line. The percentages, seasoning rules and leverage ceilings are the same for a buyer in Pennsylvania as anywhere else the program is available. State-level items, such as local property taxes and homeowners insurance, affect your monthly obligation but are not program parameters. On the depletion path, those costs feed into the DTI test, so they matter to the math even though they do not change the rules.
The mechanics match; only the state context differs.
Mistakes That Cost Buyers Time
- Assuming the statement balance is the usable balance. Apply the percentage first, then compare to the loan.
- Blending the two paths. You are on one path at a time. Do not add depletion income to the qualifier test.
- Moving money just before applying. New deposits need sourcing, and moves can reset seasoning.
- Counting cash-out proceeds. On the depletion path, they never count as qualifying assets.
- Treating “no income documentation” as “no documentation.” Every file is fully underwritten. The assets are documented with statements.
Frequently Asked Questions
Do I have to withdraw money from my IRA to qualify?
No. On both paths, the lender counts the balance shown on your statements and applies a percentage. Nothing is withdrawn or liquidated. You do need to show ownership and that the funds are accessible, and the lender reviews the account as part of underwriting.
Does a Roth IRA count the same as a traditional IRA?
Both are retirement accounts, and the program credits retirement balances by path and age, not by account label. On the qualifier path, that is 90% under 59½ and 100% at 59½ or older. On the depletion path, it is 70% at any age. The lender confirms the specifics on your statements.
Can a Pennsylvania buyer use an IRA to buy a rental property?
Through the asset depletion path, yes, subject to underwriting. Investment property is allowed there at up to 65% LTV on a purchase and 60% on a cash-out refinance, and the loan is business-purpose. Investment property is not part of the qualifier path in this program, which covers principal residences and second homes. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
What is the minimum credit score?
The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix, which depends on the score and loan amount. A first-time investor on the depletion path needs 700. Housing history of 0x30x12 is the standard, and approval is never promised.
How many statements will I need?
On the qualifier path, expect two months of statements for each qualifying account and 60 days of seasoning. On the depletion path, statements must be at least 120 days old at application, plus the most recent one within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
Next Step
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’s asset-based mortgage in Pennsylvania page presents the program for Pennsylvania 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.
Investors who want the broader program framework can review how DSCR loans work.
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References
2. 26 CFR §1.408-1 (Cornell Law School Legal Information Institute)
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 to Refinance a Pennsylvania Mortgage After Retiring With No W-2 Income · Can a Georgia Trust Beneficiary Qualify for a Mortgage on Trust Assets? · Can a Michigan Widow Qualify for a Mortgage on Life Insurance and Retirement Assets?
Guides: Asset-Based Mortgage in Pennsylvania
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.