The Quick Read: A pledged asset line and an asset qualifier mortgage solve different problems: the line is a credit line secured by your investment portfolio that puts cash in your hands, while the mortgage is a way to qualify for the home loan by counting your assets instead of documenting income. One gives you money. The other gives you a way to be approved for a mortgage. Georgia does not change the program figures for either one.
- A pledged asset line fits a buyer who wants cash for a down payment and wants the portfolio to stay invested.
- An asset qualifier mortgage fits a buyer with large balances and little documented income, such as a retiree or someone who just sold a business.
- The line puts market risk on you, because a falling portfolio can trigger a demand for more collateral.
- The mortgage leaves your assets in place, but they must be seasoned, documented and discounted by asset type.
- The two can work together, but the order of operations matters, and a call before you pledge anything can save you a problem.
Side-by-Side
The table below puts the two options on the same rows. The mortgage column reflects figures from select lenders in Lendmire’s wholesale network, subject to underwriting. The line column reflects published industry norms, which vary by institution.
| Factor | Pledged Asset Line | Asset Qualifier Mortgage |
|---|---|---|
| What it is | Revolving credit line on a portfolio | Home loan underwritten on assets |
| Review basis | Portfolio value and collateral rules | Eligible assets after credit percentages |
| Documentation | Statements, pledge agreement | Assets and credit; no income documented on the qualifier path |
| Property types | Home purchase is a common permitted use | Primary home, second home; investment on depletion path |
| Entity vesting | Collateral sits in your own account | Usually an individual borrower; varies by program |
| Reserve expectations | Cushion above the maintenance level | None at or below 75% LTV on qualifier path |
| Timeline | Arranged before you shop; draws are separate | Full mortgage file runs alongside the contract |
Two rows deserve a second look. The “no income documented” language applies only to the qualifier path, and your assets are still documented in full. The reserve row on the mortgage side changes above 75% loan-to-value (LTV, the loan amount as a share of the home’s value), where the lender sets the requirement.
Key Terms Defined
Pledged asset line (PAL): A revolving credit line secured by a taxable investment portfolio, also called a securities-based line of credit. The house is not the collateral.
Advance rate: The share of each holding’s value the lender will lend against. It differs by holding and by lender.
Maintenance call: A demand to add cash or securities, or repay part of the line, when the portfolio falls below the lender’s required level.
Non-purpose line: A line whose proceeds cannot be used to buy securities. Many lines are written this way.
Asset qualifier path: A mortgage path where eligible assets, after credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
Asset depletion path: A mortgage path where usable assets divided by 60 months become a monthly qualifying income. That income runs through the debt-to-income test, which compares monthly debts to income.
Haircut: The discount a lender applies to an asset because it can lose value or be hard to reach.
Seasoning: The length of time funds must sit in an account before the lender counts them.
How a Pledged Asset Line Works for a Purchase
A pledged asset line turns part of your portfolio into borrowing power without selling anything. FINRA describes these lines as a way to borrow against investment-account assets without liquidating them. The line is revolving, so you can repay and borrow again, according to a Federal Reserve Board note on securities-based loans. The same note says firms may set account-value requirements and may ask you to replenish collateral if the portfolio drops below a threshold.
Here is the step-by-step version for a home purchase:
1. You pick an institution that offers the line and open it against a taxable portfolio. Many lines do not accept retirement accounts.
2. The lender assigns an advance rate to each holding. The Federal Reserve note, citing FINRA, puts typical advance rates between 50% and 95% of account value, depending on the holding.
3. You sign the pledge and credit agreements, and the assets move into a pledged account.
4. You draw cash for the down payment or a purchase, and you owe interest on what you draw.
5. You keep the collateral above the maintenance level for as long as the line is open.
That 50% to 95% range is a market figure for lines, not a mortgage figure. For comparison, the asset qualifier path in Lendmire’s network counts brokerage balances at 100% toward the loan, subject to underwriting. The two numbers measure different things and should not be compared directly.
Two features surprise buyers. Some lines are uncommitted, meaning the bank can demand repayment. Some are non-purpose, meaning the cash cannot buy securities. Neither feature is unusual, but both matter if the line is your down-payment source.
The line is cash, and it is not a mortgage. If you are not paying all cash, you still need a home loan.
How the Asset Qualifier Mortgage Works
An asset qualifier mortgage is a home loan underwritten on what you own instead of what you earn. Across Lendmire’s wholesale network, the programs split into two paths, and you qualify on one path at a time.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Through select programs, loans run up to $4,000,000, with leverage up to 80% LTV on a purchase and up to 75% on a refinance, both on a principal residence or second home. The minimum credit score is 600, subject to underwriting. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Here is how balances count on this path:
- Brokerage accounts, certificates of deposit, money market and savings 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.
Illustratively, take an $800,000 loan. Say you hold $330,000 in brokerage accounts, which count at 100% for $330,000. You also hold $300,000 in a 401(k) while under 59½, which counts at 90% for $270,000. And you hold $200,000 in savings, which counts at 100% for $200,000. That adds up to $800,000 of usable assets, so the file is reviewed on assets alone. The lender’s own calculation governs.
Seasoning on this path is 60 days, with two months of statements for each qualifying account. Reserves are not required at or below 75% LTV. Above that, the lender sets them. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
The asset depletion path. Usable assets divided by 60 months become a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000 through select programs. Leverage is up to 80% on a purchase or rate-and-term refinance of a principal residence or second home, and 60% on a cash-out. On an investment property, leverage is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
The haircuts here are heavier:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Illustratively, $1,500,000 in securities at 80% is $1,200,000. Add $300,000 in cash at 100% and the usable total is $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income, which then has to carry the housing payment and other debts. The lender’s own calculation governs here as well.
The depletion path asks for more. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 in liquid assets. Statements must be at least 120 days old at application, plus one statement within 45 days. A first-time investor on this path needs a 700 score. Other borrowers follow the lender’s score and loan-amount matrix.
Cash-out proceeds do not count as qualifying assets. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are not eligible on the depletion path.
On other assets. Cryptocurrency, precious metals, collectibles and 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.
When a Pledged Asset Line Is the Better Fit
Picture a buyer with strong documented income, a taxable portfolio and a house to buy. That buyer may well qualify for a mortgage the ordinary way, subject to lender guidelines. What the buyer lacks is a way to fund the down payment without selling holdings. A line can address that.
The line also fits when you want to keep your holdings invested. You may not want to sell at a given moment, and a line lets you keep the position while using its value. It can also help you make a stronger offer, because you can show cash access rather than a pending sale.
Other situations point the same way:
- Your holdings sit in taxable accounts, not retirement accounts.
- You expect to repay the line from a known event, such as a sale of a business or a vesting schedule.
- You are comfortable with portfolio swings and have extra collateral you can add if asked.
- You have a clear plan for the takeout, meaning the permanent mortgage, before you draw.
The honest caution is the demand risk. The SEC and FINRA investor alert warns that borrowers may have to sell holdings if the portfolio falls, and the lender sets the terms. A line used as a down-payment source leaves a callable obligation outside your mortgage. That is a real trade-off, not a footnote.
When an Asset Qualifier Mortgage Is the Better Fit
An asset qualifier mortgage is the better fit when your problem is income documentation. Many buyers have large balances and a thin tax-return picture. Think of a retiree living on a portfolio, someone who sold a business, a recipient of an inheritance or settlement, or an early-retired professional. These borrowers are asset-rich and income-light, and wage-based underwriting reads them poorly.
For them, the mortgage counts the assets where they sit. You do not sell anything, and you do not pledge anything. Nothing in the file sets off a maintenance call.
The mortgage is also the stronger fit when most of your wealth sits in retirement accounts. Many lines take only taxable, non-retirement holdings. Both mortgage paths count retirement balances, with the haircuts above.
A few cautions apply. The mortgage is not a loan without documentation. Your statements are reviewed, your credit is pulled, and the property is appraised. The assets are discounted by type. You also need seasoned funds, so money that arrived last week may not count yet, except for sale-of-business, inheritance and legal-settlement funds on the depletion path, which are excused from that seasoning. A housing event such as a foreclosure needs 4 years of seasoning on the depletion path, and multiple bankruptcies are not eligible.
Loan-to-value also matters. On a purchase of a principal residence or second home, the ceiling is 80% on either path. On a purchase of an investment property, the depletion path caps at 65%. Because this is a consumer mortgage, standard consumer disclosures apply. Approval is subject to underwriting.
Can You Use Both Together?
You can, but the order of operations decides whether it works. A line produces cash. A qualifier produces a way to be approved. In theory, you draw on the line for the down payment and qualify the mortgage on assets. In practice, three things get in the way.
First, borrowed and pledged funds are not published as eligible assets on either path. If you draw on a line and deposit the cash, the lender will review where the money came from. The documented route is a seasoned cash balance in a regulated account, with the source reviewed.
Second, the same assets generally cannot do both jobs. Holdings pledged to a line may not count as free assets in the qualifying calculation. Confirm this against the specific program before you sign a pledge agreement.
Third, how a line balance is treated in a mortgage file varies by program. Some programs look at it as a debt, and some look at it only as a draw. Ask before you borrow.
The practical sequence is simple. Talk to a mortgage broker before you open or draw on a line. Get the qualifying assets mapped first, then decide whether a line fits the plan.
If the home is a rental, the picture changes. 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 loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so an asset qualifier is relevant only when the buyer is using personal-income-style underwriting. Lendmire’s complete DSCR loans guide walks through that route.
What Changes for a Georgia Buyer?
Not much on the program side. The asset percentages, leverage ceilings, seasoning rules and credit floors above do not change by state. Lendmire’s consumer mortgage lending is licensed in 16 states, and Georgia is one of them. Georgia prices, taxes and insurance are context for your budget and are not program parameters.
What matters is the property class. A Georgia primary residence or second home can use either mortgage path. A Georgia investment property is limited to the depletion path, with the lower leverage shown earlier.
What Happens When Markets Drop?
A market drop hits the two options in different places. With a line, the drop hits the collateral. If the portfolio falls below the lender’s threshold, you may be asked to add cash or securities or pay down the line. If you cannot, the firm may sell holdings, possibly at a poor moment. The investor alert linked above names forced sales and volatility as core risks. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
With an asset qualifier mortgage, the drop matters mainly before closing. The lender reviews the statements in the file, so a sharp decline before application lowers what counts. After closing, the mortgage is secured by the house. There is no maintenance call on your portfolio. You still owe the mortgage payment, and lower balances mean a thinner cushion.
For a deeper look at how these structures behave in a downturn, see Lendmire’s piece Pledged Asset Line vs Super Jumbo Mortgage in a Market Crash.
Common Mistakes
- Pledging before planning. Opening a line first can tie up assets the mortgage needed.
- Treating the mortgage as no-doc. Assets, credit and the property are all reviewed.
- Counting every dollar at full value. Each path applies its own credit percentages, and they differ.
- Ignoring statement age. Seasoning rules differ by path, and recent deposits may not count.
- Assuming crypto or collectibles count. Convert them to a seasoned cash balance first.
- Mixing the two paths. A borrower is reviewed on one path at a time, and the figures never blend.
The Balanced Verdict
Choose the pledged asset line if you can qualify for a mortgage on income and want cash without selling. You accept market risk and a callable obligation in exchange. Choose the asset qualifier mortgage if your income is thin on paper and your balances are large. You accept documentation, seasoning and haircuts in exchange for leaving your portfolio untouched.
The choice is often a sequence, not a contest.
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.
Frequently Asked Questions
Can I use a line of credit for my down payment and still qualify on assets?
Possibly, but it needs planning. Borrowed funds are not published as eligible assets on either path. Also confirm that pledged holdings are not counted twice.
Do I have to sell my investments to use an asset qualifier mortgage?
No. The assets are counted, not liquidated. They must be documented with statements and seasoned, and they are discounted by type. On the qualifier path, the usable total must cover the entire loan.
Does a pledged asset line count as qualifying income?
No. A line gives you cash, and it does not create income. If you need to qualify for the mortgage, you need either documented income or an asset-based path. How a line balance is counted as debt varies by program.
Which retirement accounts count, and how much?
It depends on the path. 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. Both are subject to underwriting.
Does Georgia change the rules for either option?
Not for the program figures. The asset percentages, leverage and seasoning are the same in Georgia. What changes is the property class. A rental purchase is limited to the depletion path, with lower leverage.
Lendmire’s asset-based mortgage in Georgia page presents the program for Georgia borrowers.
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 tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. FINRA
2. Federal Reserve: Estimating Securities Based Loans Outstanding
3. SEC/FINRA Investor Alert: Securities-Backed Lines of Credit
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does Real Estate Equity Count on an Asset Qualifier Mortgage? · Asset Qualifier vs Asset Depletion for an Heir · Asset Qualifier vs Asset Depletion for a FIRE Household
Guides: Asset-Based Mortgage in Georgia
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.