The Quick Read: A retiree moving to Tennessee can buy a home by qualifying on savings and investments instead of a paycheck, either by letting eligible assets cover the whole loan or by converting them into monthly qualifying income, subject to underwriting, the account types involved, and whether the home is a residence or a rental. The assets are fully documented with statements. Nothing is sold, frozen, or pledged.
- The asset qualifier path counts eligible balances against the entire loan and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create income that must pass a debt-to-income test.
- Retirement accounts count at 90% to 100% on the qualifier path and 70% on the depletion path, depending on the account and your age.
- Rental properties bought after the move usually run through a different lane, DSCR, which reads the property’s rent instead of your balance sheet.
Many retirees have seven-figure balances and almost no documented income. Standard mortgage underwriting reads that as a weak file. Asset-based underwriting reads it as a strong one. The rest of this article shows how that works, where it breaks, and how a Tennessee move fits in.
Key Terms Defined
Asset qualifier path: a way to qualify where eligible assets, after the credit percentages, must equal or exceed the entire loan amount.
Asset depletion path: a way to qualify where usable assets are divided by 60 months to produce a monthly qualifying income.
Usable assets: the part of each balance the program counts after its percentage is applied.
Haircut: the discount a program applies to a balance, such as counting securities at 80% of their value.
Seasoning: the length of time funds must have sat in your accounts, shown by statements, before they count.
Debt-to-income ratio (DTI): your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Loan-to-value (LTV): the loan amount as a percentage of the home’s value or price.
DSCR: debt service coverage ratio. It compares a rental’s monthly rent with its monthly debt payment, so the property’s income is what gets tested.
Which Path Fits You: Assets as the Loan, or Assets as Income?
Start with this question: do your eligible assets equal the whole loan, or do they need to become income first? A borrower is qualified on one path at a time. The two paths use different percentages, so never blend their numbers.
On the asset qualifier path, eligible assets must equal or exceed the entire loan. No employment or income is documented. Through select programs, leverage runs up to 80% LTV on a purchase and 75% on a refinance, for a principal residence or second home. Loans go up to $4,000,000. Credit scores start at 600, subject to underwriting. Reserves are not required at or below 75% LTV. Above that, the lender sets them. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
On the asset depletion path, your usable assets become monthly income. A principal residence or second home can reach 80% LTV on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. An investment property is capped at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loans run from $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor needs 700. Cash-out proceeds never count as qualifying assets. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The depletion path also has a floor. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are the only income source, liquid assets can never be below $250,000. Asset-derived income can also supplement documented income, such as Social Security or a pension, up to a 45% DTI. In that case, the minimum-assets rule is waived.
Which Assets Count, and for How Much?
Across the wholesale network, the pattern is consistent. Cash-like balances count at full value, securities count for less, and retirement accounts count for the least. The exact percentages depend on the path.
Asset qualifier path: share of the balance that counts.
| Asset | Counts at |
|---|---|
| Brokerage accounts | 100% |
| CDs, money market, savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Accounts combine. Seasoning is 60 days, with two months of statements for each qualifying account.
Asset depletion path: share of the balance that counts.
| Asset | Counts at |
|---|---|
| Cash accounts and CDs | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
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.
Some assets do not count on the depletion path at all. They include 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 borrowed or pledged funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
How Underwriting Treats Your Accounts, Step by Step
Here is how a file runs, whichever path you land on.
1. Inventory eligible assets. The lender lists depository, brokerage, and retirement balances in your name. Wealth in a business, collectibles, or unrelated property usually does not read as liquid.
2. Apply the percentages. Each balance is multiplied by its program percentage. The result is your usable assets.
3. Net out money already spoken for. Down payment and closing costs come from the same accounts. Most programs we place files with do not let one dollar do two jobs, so the lender decides which balance it counts.
4. Run the test for your path. On the qualifier path, usable assets are compared with the loan. On the depletion path, they are divided by 60 months and run through the DTI test.
5. Review credit and housing history. Asset strength does not replace credit. A housing history of 0x30x12 is the target, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible.
6. Verify with statements. The lender reads account statements. It does not liquidate anything.
Take the qualifier example. An $800,000 loan is backed by $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) held under age 59½ (90% counts, so $270,000), and $200,000 in savings (100% counts, so $200,000). Usable assets total $800,000, and the borrower is reviewed on assets alone.
Now take the depletion example. $1,500,000 in securities counts at 80%, or $1,200,000. Add $300,000 in cash at 100%. Usable assets are $1,500,000. Divide by 60 months, and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the DTI test. This arithmetic is illustrative, and the lender’s own calculation governs.
Why Assets Are Allowed at All
Buying on assets is not a loophole. The federal ability-to-repay rule for home loans, in CFPB Regulation Z, section 1026.43, says a lender may base its repayment decision on income, on assets other than the home being bought, or on both. Its examples include savings, vested retirement amounts, stocks, bonds, and CDs. The value of the home you are buying cannot count.
The same rule requires the lender to verify the assets it relies on with reliable third-party records. The eCFR text of the rule spells that out. That is why statements and seasoning matter, and why “no income documented” never means no documentation.
The rule prescribes no divisor or haircut. Those are program conventions, which is why percentages differ so much between lenders and why every file is reviewed individually.
Does the Tennessee Move Change the Process?
The loan mechanics do not change by state. The program figures above are the same for a Tennessee borrower. Tennessee is among the 16 states where Lendmire, a mortgage broker, is licensed for consumer mortgage lending. Lendmire places these loans through select lenders in its wholesale network. What changes is sequencing, because you are often selling one home while buying another.
1. Sort the old home’s proceeds first. Once sale proceeds sit in a regulated depository or brokerage account, they are ordinary assets. They must still meet seasoning on the path you choose. Tax treatment varies, including on selling a home or securities in a move year, so consult a qualified professional.
2. Decide what is the down payment and what is the pool. If sale proceeds are your down payment, they cannot also prop up your qualifying balance. Size the pool for the down payment, closing costs, and a cushion first.
3. Pick the path. If liquid assets can cover the loan, the qualifier path is simpler. If the home is larger or you want to preserve cash, the depletion path with its DTI test may fit better.
4. Gather statements. Plan for two months of statements per account on the qualifier path. On the depletion path, plan for statements at least 120 days old plus one recent statement. Any large recent transfer will get a question about its source.
5. Shop with the loan size in mind. The qualifier path reaches $4,000,000 and the depletion path reaches $3,500,000, which covers most lake and higher-priced Tennessee purchases. Metro, suburban, and rural homes can differ on property-type questions that the lender reviews at appraisal.
Selling first or buying first is its own decision.
Three Retirees, Three Different Paths
These are hypothetical profiles built to show the decision, not predict an outcome.
The early retiree with a 401(k). Picture a couple in their late fifties living off a portfolio. Their money sits in brokerage accounts, savings, and a 401(k) they cannot touch penalty-free yet. The qualifier path counts that 401(k) at 90% until 59½. If the three buckets match the qualifier example above, assets alone cover the loan with no income documented.
The retiree with a big securities portfolio. A single retiree holds mostly stock funds plus a cash cushion. The qualifier path may not stretch far enough, so the depletion path converts the pool to income. Using the depletion example’s shape, $1,500,000 usable becomes $25,000 of monthly qualifying income. That clears the minimum-assets test, and the cash balance clears the $250,000 liquid floor. What remains is the DTI test, which depends on the housing payment and any other debts.
The retiree whose wealth is mostly property. Say someone owns a paid-off lake house and a rental, with modest savings. The depletion path counts real-estate equity at 60%, but the $250,000 liquid floor still applies when assets are the only income source. A thin cash balance can sink the file. The fix is often to convert part of the property into cash that has seasoned in a regulated account. A pension or Social Security can also supplement asset-derived income up to a 45% DTI. In that case the minimum-assets rule is waived.
Where the General Rule Breaks
- Retirement accounts and age. The qualifier path steps from 90% to 100% at 59½. The depletion path uses 70% at any age, so an IRA that looks big on paper counts for less there.
- Net worth is not eligible assets. Business interests, collectibles, and gifted or borrowed funds generally do not count.
- Reserves are not income. The same dollars cannot be both cash to close and the base of your qualifying income.
- Credit still matters. A 600 floor on the qualifier path, the lender’s matrix on the depletion path, and a 700 requirement for a first-time investor on that path are all separate gates from asset strength.
- Investment property. It is available only on the depletion path, with lower leverage than a residence.
- Housing events. A housing event needs 4 years of seasoning on the depletion path.
- Joint accounts. Accounts combine on the qualifier path, but funds generally need to be in a borrower’s name.
Asset Qualification vs Other Ways to Buy
| Way to buy | Best fit | Main trade-off |
|---|---|---|
| Paying cash | Large liquid balances, no wish for debt | Locks up liquidity and portfolio growth |
| Asset qualifier path | Eligible assets cover the whole loan | Balances must be seasoned and documented |
| Asset depletion path | Big portfolio, low documented income | Derived income must pass the DTI test |
| Standard mortgage on retirement income | Steady pension, Social Security, distributions | Needs documented income that is large enough |
| Bridge or equity loan | Funds needed before the old home sells | A second loan, with its own terms |
Selling investments to pay cash can trigger gains, and it shrinks the portfolio that funds your retirement. Borrowing keeps the portfolio intact, but it adds a payment. Test that payment against your withdrawal plan, and stress-test it against a market drop after closing. Both paths run from your statements, so a drop before application can change the answer.
Rentals After the Move: Where DSCR Comes In
A retiree may use both lanes. The relocation home is financed on assets. Rentals bought afterward are a different animal. 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.
DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. That means your personal balance sheet is not the test. Asset depletion reads you. DSCR reads the property. A retiree with large assets but heavy existing debt may fit one lane better than the other.
Frequently Asked Questions
Do I need income to get a mortgage in retirement?
Not necessarily. On the qualifier path, no employment or income is documented, and eligible assets must cover the entire loan. On the depletion path, assets become qualifying income that passes a DTI test. Both are subject to underwriting.
Do I have to sell my investments?
No. Assets are counted as a qualifying convention. Nothing is sold, frozen, or pledged. You still need enough documented cash for the down payment and closing costs.
Can I use an IRA or 401(k)?
Yes. On the qualifier path, retirement accounts count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age.
Does this work for a second home or a rental?
A second home works on both paths. An investment property works only on the depletion path, at 65% LTV on a purchase or rate-and-term refinance and 60% on a cash-out. A rental financed on its rent usually moves to DSCR instead.
What if most of my wealth is home equity?
Equity counts at 60% on the depletion path only. It does not count on the qualifier path. The $250,000 liquid floor still applies when assets are the only income source, so converting some property wealth into seasoned cash is often the fix.
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 programs options based on your statements, the property, credit profile, leverage, and your goals. Programs are subject to underwriting. This is not a commitment to lend.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z, section 1026.43
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 You Relocate to Florida and Buy a Home on Assets Before You Have Local Income? · Can Two Pennsylvania Retirees Buy a Home Together on an Asset Qualifier Mortgage? · Can You Buy a Second Home in Georgia on Assets Instead of Income?
Guides: Asset-Based Mortgage in Tennessee
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.