The Quick Read: Usually, but only partly and only for certain jobs. Across the wholesale network, a retirement balance typically counts toward reserves at a discount, 70% of value or 80% once the owner is 59½ or older, and it does not raise bank statement income, which comes from deposits.
- Reserves are the main job. Vested retirement money counts at 70%, or 80% at 59½ and older, subject to full underwriting.
- Bank statement income comes from 12 or 24 months of deposits, never from a retirement balance.
- Asset allowance and assets-only are separate paths that turn liquid assets, retirement included, into qualifying income.
- Business funds, gift funds, unvested stock, cryptocurrency and most trusts never count.
- Above $4,000,000, every file is reviewed case by case before submission.
Everything here reflects what select wholesale programs typically allow. It is not a commitment to lend, and each file is underwritten individually.
The Two Jobs Retirement Money Can Do
A retirement balance can support reserves, or it can feed an asset-based qualification path. It cannot do the third thing borrowers hope for, which is add to deposit income on a bank statement file.
| Role | Does retirement money help? | What it needs |
|---|---|---|
| Bank statement income | No | 12 or 24 months of deposits |
| Reserves | Yes, at a discount | Vested, accessible, documented |
| Asset allowance or assets-only | Yes, at a discount | Liquid assets, separate path |
Bank statement programs build income from deposits after an expense ratio. Scotsman Guide describes these programs as averaging 12 to 24 months of deposits in place of traditional personal-income documentation. A 401(k) statement is not a deposit. It sits in the reserve test and, on a different path, in the asset test.
Most self-employed borrowers on these files are founders, physicians, attorneys and investors whose returns understate cash flow. Their income case runs on deposits. Their retirement account is the cushion behind it.
How Much of the Balance Counts?
Across the network, retirement accounts count at 70% of value. Once the owner is 59½ or older, most programs move that to 80%. The discount is a rough stand-in for what a withdrawal would cost.
The IRS explains that withdrawals before 59½ generally carry an extra 10% tax on top of ordinary income tax. Lenders do not compute your actual tax bill. They apply a flat percentage instead, which is why the age line matters.
Here is a worked illustration with no dollars attached. Say a borrower is 52 and holds a vested 401(k) and a taxable brokerage account. The 401(k) is credited at 70%. The same balance at age 60 would be credited at 80%. Cash in a personal checking account counts in full. The mix matters as much as the total.
A few points that trip files:
- Only the vested, accessible balance counts. Unvested stock and unvested employer match are ignored.
- An outstanding 401(k) loan lowers the balance. The IRS notes that IRAs and IRA-based plans such as SEP and SIMPLE cannot offer participant loans, so loan questions apply to employer plans.
- The account must belong to a borrower on the loan. A non-borrowing spouse’s account is a program-specific question, so confirm it before counting on it.
- Business funds, gift funds, unvested stock, cryptocurrency and trusts other than a revocable living trust never count.
How the Reserve Test Actually Runs
The lender takes verified assets and subtracts funds needed to close, meaning the down payment and closing costs. It then applies the haircut to retirement balances. What remains is compared to the required months of full payment, taxes and insurance included.
Reserves typically run three months on loans to $500,000, six months to $1,500,000, and nine months above that. Each additional financed property adds two months, up to a 12-month maximum. First-time investors are held to 12 months.
That ladder explains why a balance that looks large can fall short. The requirement grows with loan size and property count. The usable balance stays fixed, then shrinks again after the haircut. It is division, nothing more.
On a super jumbo, there is a second rule. Above $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property, cash-out proceeds cannot satisfy reserves. Reserves have to come from funds independent of the transaction. A retirement account fits that test. A cash-out refinance of the same property does not.
When Retirement Money Becomes Income Instead
Asset allowance and assets-only turn liquid assets into qualifying income. They are separate from a bank statement file, and they apply to primary and second homes only, at 80% maximum leverage, through select wholesale programs.
Asset allowance divides liquid assets by a set number of months:
- 36 months as a supplement when debt-to-income is at or below 60%.
- 60 months as a supplement when debt-to-income is above 60%.
- 84 months for a standalone qualification, or any loan above $3,500,000.
Retirement balances enter that math at the same 70% or 80% credit. Scotsman Guide notes that asset depletion programs can use retirement funds, which matches what the network sees.
Assets-only is stricter in a different way. It needs no debt-to-income calculation, but U.S. liquid assets must equal the loan amount, plus closing costs, plus 60 months of any net loss on other residential property. That bar is high for a retirement-heavy borrower, because the haircut shrinks the counted balance before it is measured against the loan.
One trap is double-counting. The same dollars cannot qualify you for income and also fill the reserve test in full. Assets used to qualify come out of what is left for reserves, and funds used to close come out first. Plan the order before applying.
Does the Answer Change at Super Jumbo Size?
Yes. The treatment of the account does not change, but the file around it does. Above the super jumbo line, programs add overlays: a 700 credit floor, a 0x30x24 housing history, and 48-month seasoning on any credit event. Borrowers must be U.S. citizens or permanent residents.
Leverage steps down with size. On a primary residence purchase through select wholesale programs, leverage runs 90% to $1,000,000, 85% to $2,000,000, 80% to $3,000,000 and 75% to $4,000,000 at the top credit tier. Second homes and investment property run about five points lower at each size. Above $4,000,000, leverage is reviewed case by case, and a bank portfolio program carries twelve-month-statement files with its own ladder: 65% to $5,000,000, 60% to $10,000,000 and 55% to $30,000,000, again on review.
Lower leverage means a larger down payment, which is cash that leaves the reserve pile before the test starts. That is where retirement-heavy borrowers get squeezed. The balance that looked fine against a 6-month requirement can look thin after a bigger down payment and a 9-month requirement.
Three Borrower Pictures
These are illustrations, not quotes or approvals.
The retirement-only borrower. A founder holds most of their net worth in a 401(k) and an SEP IRA, with modest cash. Deposits cover income. Reserves are the problem, because the haircut cuts the counted balance and the cash needed to close comes out first. Options include a smaller loan, a lower-leverage structure, or building a separate liquid account with a clean paper trail.
The mixed-asset borrower. A physician holds cash, a brokerage account and a rollover IRA. Cash counts in full. The brokerage and IRA count at a discount. The total clears the ladder with room to spare, and the file runs cleanly on deposits.
The short borrower. An investor with four financed properties is buying a fifth. Their reserve requirement has stacked up to the 12-month maximum. Retirement money counted at 70% falls short. The fix is not more retirement money. It is more liquid cash, a smaller loan, or a different structure. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
What the Lender Checks
Expect recent statements for each retirement account, usually two to three cycles, though the exact count varies by program. The statement shows the vested balance, any outstanding loans, and the terms of withdrawal.
Underwriters look for:
- Vested status and any loans against the account.
- Whether the borrower can access the funds without waiting for termination, retirement or death.
- Ownership. The account must be in a borrower’s name.
- Large or unexplained transfers into the account or out of it.
The federal ability-to-repay rule in Regulation Z requires a reasonable, good-faith, documented determination of repayment ability. It sets no haircut and no reserve ratio. Comparing programs matters here.
Common Mistakes
- Counting the whole balance. Plan on 70% or 80%, not 100%.
- Assuming retirement raises income. On a bank statement file it does not.
- Counting cash-out as reserves. Above the overlay line, it cannot be.
- Counting business or gift funds. They never count.
- Moving money without a paper trail. A rollover or transfer needs statements on both ends.
- Draining the account to fund the down payment. Taxes and the early-withdrawal penalty come out first, and the cash you net is smaller than the balance you drew. Tax treatment varies; consult a qualified professional before relying on any outcome.
A Rental Purchase May Not Need Any of This
If the property is a rental, a business-purpose DSCR loan may avoid the deposit and asset math entirely. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Reserves typically still apply, so the retirement discount still matters. Lendmire’s complete DSCR loans guide covers how that path compares.
Frequently Asked Questions
Do 401(k)s and IRAs both count?
Yes, both can count toward reserves when vested and accessible, typically at 70% of value, or 80% at 59½ and older. Roth accounts follow the same treatment. Loans against a 401(k) reduce the counted balance, and IRAs cannot offer participant loans.
Can retirement money raise my bank statement income?
No. Income on a bank statement file comes from 12 or 24 months of deposits after an expense ratio. Retirement money enters only through reserves or through the separate asset allowance and assets-only paths.
Can the same retirement dollars qualify me and also cover reserves?
Not in full. Assets used to qualify come out of what remains for reserves, and funds used to close come out first. Sequence the math before you apply.
Does an unvested balance count?
No. Unvested stock and unvested employer contributions are ignored. Only the vested, accessible portion is credited.
Does the answer change above the super jumbo line?
The percentages stay the same, but the file tightens. Cash-out proceeds cannot satisfy reserves above $3,500,000 on a primary residence or $3,000,000 on a second home or investment property, and every file above $4,000,000 is reviewed case by case before submission.
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a broker that places files through select wholesale programs, and nothing here is a commitment to lend.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Scotsman Guide: Which groups are driving non-QM lending
2. IRS: Hardships, early withdrawals and loans
3. Scotsman Guide: These loans should take center stage
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get a Super Jumbo Bank Statement Loan Ahead of a Liquidity Event · How to Use 40-Year Amortization on a Super Jumbo Bank Statement Loan · How to Use Cash After a Sale on a Super Jumbo Bank Statement Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.