The Quick Read: Usually yes: a Roth IRA is an eligible retirement account on the asset qualifier path, where it counts at 90% of its balance under age 59½ and 100% at 59½ or older, subject to underwriting, with no withdrawal required and custodian statements as proof. On the asset depletion path, it counts at 70% at any age and is spread over 60 months as income.
- The asset qualifier path covers the whole loan with eligible assets and documents no employment or income.
- The asset depletion path turns usable assets into monthly income, which then runs through the debt-to-income test.
- A Roth IRA sits in the same retirement bucket as a traditional IRA. The published percentages do not split contributions from earnings.
- You document the balance with statements. The program does not ask you to sell or drain the account.
- Qualifier-path loans are for principal residences and second homes. Investment property is available only on the depletion path.
Which Path Fits You?
Pick the path first, because the same Roth balance counts differently on each. Across the wholesale network Lendmire works with, these two designs get mixed up constantly, and a borrower is qualified on one path at a time.
The asset qualifier path asks one question. After the credit percentages are applied, do your eligible assets equal or exceed the entire loan amount? If they do, the file is reviewed on assets alone, subject to lender guidelines. No employment or income is documented.
The asset depletion path asks a different question. After haircuts, usable assets are divided by 60 months. The result is a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test.
Both suit a cash-heavy, income-light borrower. Think of a retiree, someone who sold a business, or a household living off a portfolio. Balances are large and documented income is small.
How a Roth IRA Is Counted on Each Path
A Roth IRA counts, but not always dollar for dollar. Both paths apply a percentage to retirement money, and the percentage depends on the path and, on one path, on your age. The figures below are ceilings and floors through select programs, subject to underwriting.
| Account type | Qualifier path | Depletion path |
|---|---|---|
| Savings, money market, CDs | 100% | Cash and CDs 100% |
| Brokerage accounts | 100% | Securities 80% |
| Roth IRA or traditional IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| 401(k) | 90% under 59½, 100% at 59½+ | 70% at any age |
On most files, a Roth is treated as one more retirement account. The published credit does not reward the fact that Roth contributions are after-tax dollars. It also does not penalize the Roth’s tax-free growth. The account type sets the percentage, and your age sets it further on the qualifier path.
Here is what that looks like in plain numbers. Take an $800,000 loan on the qualifier path. You hold $330,000 in brokerage accounts (100% = $330,000), $300,000 in a Roth IRA and you are under 59½ (90% = $270,000), and $200,000 in savings (100% = $200,000). That counts $800,000 of usable assets, which meets the loan amount, and the file is reviewed on assets alone, subject to underwriting.
Now shift that same Roth to a borrower at 59½ or older. The $300,000 counts in full. The same loan needs less help from the other accounts. This is why age matters more here than whether the account is a Roth or a traditional IRA.
On the depletion path, age does not change the Roth’s percentage. Every $1,000,000 in a Roth counts as $700,000 of usable assets. That figure is then divided over 60 months. These examples are illustrative, and the lender’s own calculation governs.
What Loan Terms Come With It?
Leverage and loan size differ by path. These are program ceilings, never offers.
On the qualifier path, loans run up to 80% loan-to-value on a purchase and up to 75% on a refinance, for a principal residence or second home. Loan amounts go up to $4,000,000. Credit starts at a 600 minimum score. The path requires 60 days of seasoning and two months of statements for each qualifying account. Reserves are not required at or below 75% loan-to-value, and above that the lender sets them.
On the depletion path, a principal residence or second home can reach 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. An investment property tops out at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loan amounts run from $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor needs a 700 score. Statements must be at least 120 days old at application, plus one recent statement within 45 days.
The depletion path also sets minimum assets. You need the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, usable liquid assets may not fall below $250,000. If you also have documented income, asset-derived income can supplement it up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Cash-out proceeds never count as qualifying assets. Terms are subject to underwriting, and programs change.
Why Roth Money Raises Extra Questions
A Roth is the retirement account that underwriters ask about most. The reason is that its withdrawal rules differ from a traditional IRA, even though the credit percentage does not.
Contributions to a Roth can generally come out without tax or penalty at any time. Earnings are different. Vanguard’s IRA withdrawal guide explains that earnings are taxed and penalized if the five-year and age tests are not met. Bankrate’s Roth five-year rule explainer adds that distributions come out in a set order: contributions first, then conversions, then earnings.
That ordering makes a Roth more flexible than a traditional IRA. Still, treat it as context, not a promise. The program applies a retirement percentage to the balance, and we have not seen a published guideline that grants extra credit for the contribution portion. If your balance is mostly contributions, ask the lender how it views access before you count on it. Tax treatment varies; consult a qualified professional.
Three Roth quirks come up in real files:
- Recent conversions. Each conversion carries its own five-year period under the Vanguard guide above. A freshly converted balance can draw more questions about access and about where the money came from.
- Designated Roth accounts. A Roth 401(k) or Roth 403(b) is not a Roth IRA. IRS Publication 590-B says designated Roth accounts should not be confused with Roth IRAs. A program may list them separately, so check how yours is titled.
- No required distributions. Roth IRAs carry no lifetime required minimum distributions. That does not change the underwriting percentage, but it means the balance can sit untouched.
Do You Have to Withdraw the Money?
No. Qualifying on a retirement account is an underwriting calculation. The lender counts a share of the balance, and the money stays invested. You do not liquidate the Roth, start taking distributions, or retire to use it.
You do need to show that the funds are yours, vested, and accessible. A loan against the account, pledged funds, or a pending withdrawal can reduce or remove the balance. Pledged or borrowed funds are not published as eligible on either path.
What Documents Does a Roth Need?
Expect to hand over custodian statements. They should show the owner’s name, the vested balance, and the statement date. On the qualifier path, that means two months of statements for each qualifying account and 60 days of seasoning. On the depletion path, it means the 120-day-old statement plus a recent one within 45 days.
Asset-based does not mean undocumented. The assets are documented on both paths. Federal ability-to-repay guidance from the CFPB points to financial institution records, such as bank or investment statements, as acceptable evidence. In practice, you are skipping income paperwork, not asset paperwork.
A short checklist helps:
- Custodian statements showing owner, vested balance, and date.
- Statements for every other account you count, since accounts combine.
- A paper trail for any large recent deposit, rollover, or conversion.
- A clear answer on whether any loan or pledge sits against the account.
For more on how lenders total up different account types, see Lendmire’s piece How Lenders Count Assets Toward an Asset Depletion Mortgage.
Can the Same Dollars Count Twice?
No. A dollar of Roth money cannot both fund your down payment and count as a qualifying asset after it leaves the account. The cash needs of the deal come out of your usable assets first, and the lender’s own calculation governs.
Picture a borrower who plans to put part of a Roth toward the purchase. Once those funds leave, the account balance falls and so does the amount that counts. Run the qualifying math on what remains after the transaction, not on today’s statement.
Mixed holdings can make this easier. A borrower with savings, brokerage, and a Roth can use cash for the down payment and leave the retirement account to carry more of the qualifying weight. That sequencing is worth planning before you apply.
What Can Reduce or Exclude a Roth Balance?
Several things shrink a balance or knock it out, even when the account itself is eligible:
- Unvested funds, or funds you cannot reach.
- A loan or pledge against the account.
- A balance held outside a regulated institution, such as foreign funds.
- Money you also need for the down payment or closing.
- Deferred compensation, which is not eligible on the depletion path. Lendmire’s article Does Deferred Compensation Count Toward an Asset Depletion Mortgage? covers that gap.
Other asset classes, such as cryptocurrency, precious metals, and collectibles, 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.
Three Borrower Pictures
The retiree past 59½. A retiree holds a Roth, savings, and a brokerage account, and wants a second home. On the qualifier path, the Roth counts at 100%, and so do savings and brokerage. If the combined total meets the loan amount, the file can qualify on assets alone, subject to underwriting.
The early-retired professional under 59½. This borrower has a large Roth and a smaller cash balance. The Roth counts at 90% on the qualifier path, so the cash and brokerage side does more work. The same borrower on the depletion path sees the Roth at 70%, with the usable total divided by 60 months and run through debt-to-income.
The investor buying a rental. The qualifier path does not cover investment property. If you want to buy a rental using assets, the depletion path applies, with the investment property leverage limits above. If the rent itself covers the payment, a DSCR loan may fit better. 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. Many DSCR files also ask for liquid reserves, and whether a Roth counts toward them depends on the program. Lendmire’s complete DSCR loans guide covers that track in full.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, must equal or exceed the whole loan amount. No employment or income is documented.
Asset depletion: A path that divides usable assets by 60 months to create a monthly qualifying income. That income runs through the debt-to-income test.
Haircut: The share of an account’s balance a lender does not count. A 70% credit means a 30% haircut.
Seasoning: The length of time funds have sat in an account before you apply. It shows the money is yours and not freshly borrowed.
Vested: The part of an account you fully own and can access. Unvested money does not count.
Designated Roth account: A Roth feature inside an employer plan, such as a Roth 401(k). It is not a Roth IRA.
Frequently Asked Questions
Does a Roth IRA count the same as a traditional IRA?
On most files, yes. Both sit in the retirement bucket. On the qualifier path, either counts at 90% under 59½ and 100% at 59½ or older. On the depletion path, either counts at 70% at any age. The published percentages do not give a separate credit for the Roth’s after-tax contributions.
Am I too young to use my Roth?
Not necessarily. Under 59½ on the qualifier path, the Roth counts at 90% instead of 100%. On the depletion path, age does not change the 70% credit. Credit and the other program tests still apply, and every file is underwritten individually.
Can I combine a Roth with other income?
Yes, on the depletion path. Asset-derived income may supplement documented income, up to a 45% debt-to-income ratio. When assets supplement income, the minimum-assets rule is waived. The qualifier path documents no income at all.
What if I have a loan against my retirement account?
A loan or pledge against the account can reduce or remove the balance that counts. Tell the loan officer early so the numbers reflect what you can actually use.
Does using a Roth to qualify trigger taxes or penalties?
No, because nothing is withdrawn. The lender counts a share of the balance and the account stays invested. Withdrawing the money to fund the purchase is a separate decision with its own consequences.
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 is a broker that arranges these loans through select lenders in its network, with consumer mortgage lending in 16 states. Programs change and every file is underwritten individually, so nothing here is a commitment to lend.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Vanguard: IRA Withdrawal Rules
2. Bankrate: Roth IRA 5-Year Rule
3. IRS Publication 590-B (draft chapter)
4. CFPB ATR/QM Compliance Guide
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 Lenders Count Assets Toward an Asset Depletion Mortgage · Asset Qualifier Mortgage vs Bank Statement Mortgage · How Lenders Decide Which Sale Proceeds Count Toward Asset Depletion
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.