The Quick Read: Yes, usually: eligible IRA balances can count toward qualifying while the money stays in the account. The IRA is never pledged as collateral, and the program has to accept retirement assets, subject to underwriting. Texas changes nothing here, because the answer is the same in every state.
- Two paths exist. On the asset qualifier path, your assets cover the whole loan. On the asset depletion path, your assets are converted into monthly qualifying income.
- IRA credit differs by path. The qualifier path counts IRA and 401(k) balances at 90% under age 59½ and 100% at 59½ or older. The depletion path counts retirement accounts at 70% at any age.
- Statements are required. Your assets are documented with account statements. What is skipped is traditional personal-income documentation, pay stubs and employment verification on the qualifier path.
- Investment property is narrower. It is available only on the depletion path, at lower leverage.
Key Terms Defined
Five terms come up again and again here.
- Asset qualifier path: a way to qualify where eligible assets must equal or exceed the entire loan amount.
- Asset depletion path: a way to qualify where eligible assets are divided by 60 months to create a monthly income figure.
- Haircut: the share of an account’s balance a lender refuses to count, because the value can drop or the money is harder to reach.
- Seasoning: how long the money has sat in your accounts before the lender will count it.
- Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly income.
Which Path Fits an IRA Holder?
If your balances are large and your documented income is small, you are the borrower these programs were built for. That usually means a retiree, someone who sold a business, an heir, or an early retiree living off a portfolio. Both paths let the IRA stay invested. The difference is what the lender does with the balance.
A borrower is qualified on one path at a time. Lendmire’s team never blends the two sets of figures, and neither should you.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| What the assets do | Cover the entire loan | Become monthly income |
| Income documented | None | Derived income, run through DTI |
| IRA/401(k) credit | 90% under 59½; 100% at 59½+ | 70% at any age |
| Primary or second home | 80% purchase; 75% refinance | 80% purchase/rate-and-term; 60% cash-out |
| Investment property | Not offered here | 65% purchase/rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
These are ceilings and floors on select programs in the wholesale network, not offers. Every file is underwritten individually.
The Asset Qualifier Path: Assets Cover the Loan
On this path, the question is simple: do your eligible assets, after the credit percentages, equal or exceed the whole loan? If yes, the file is reviewed on assets alone, subject to underwriting. No employment or income is documented. Every file is still fully underwritten, and the assets are proven with statements.
Here is what counts, and at what share of the balance:
- 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% once you reach 59½.
- Accounts combine, so you can stack several to reach the loan amount.
Run the numbers on 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. Those add up to $800,000 of usable assets, so the file is reviewed on assets alone. This is an illustration, and the lender’s own calculation governs.
Leverage tops out at 80% on a purchase and 75% on a refinance, for a principal residence or second home. Whether cash-out proceeds are allowed on this path is set by the lender and is not published. Loans run up to $4,000,000.
Seasoning is 60 days, with two months of statements for each qualifying account. The credit floor is a 600 score on this path. Housing history is generally 0x30x12, though one 30-day late in the last twelve months is considered case by case. No reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
The Asset Depletion Path: Assets Become Income
This path suits you when your assets are big but do not quite cover the full loan, or when you want to keep more cash outside the loan. The lender takes your usable assets after haircuts and divides them 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.
The haircuts on this path are:
- 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%.
Take $1,500,000 in securities, which counts at 80% for $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts. It is an illustration only, and the lender’s calculation governs.
For an IRA holder, the haircut matters. A $1,000,000 retirement balance counts as $700,000 usable before the division by 60. The same balance on the qualifier path counts at $900,000 under 59½ and $1,000,000 after. This is why the age 59½ line matters on one path and not the other.
A few more rules apply here:
- Minimum assets: the lesser of $1,000,000 or 1.25 times the loan balance. It is never below $250,000 liquid when depletion is your only income source.
- Supplementing income: asset-derived income can also supplement documented income, up to a 45% DTI ratio. When it does, the minimum-assets rule is waived.
- Credit: this path follows the lender’s score and loan-amount matrix. A first-time investor needs 700. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning.
- Statements: they must be at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
Some assets do not count on this path: 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 and collectibles 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 source reviewed by the lender.
What About a Rental Purchase?
Investment property works only on the asset depletion path, and it is a business-purpose loan. Leverage drops to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets.
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. In a DSCR loan, the property’s rent versus its payment decides qualification, and an IRA balance typically enters only as reserves. Many DSCR programs accept retirement accounts for reserves, often with a haircut. An IRA balance may satisfy reserves, but it does not replace rent coverage.
Which route fits depends on what you are buying. If you want a primary residence or second home and your balances carry the file, stay on the asset-based paths. If you want a pure rental and the rent covers the payment, DSCR is usually the more natural product. Lendmire arranges both through select lenders, so the choice follows the deal rather than a sales preference.
Why the IRA Itself Stays Out of the Collateral
The IRA can be counted, but it can never secure the loan. This is the line that keeps “qualifying on an IRA” from becoming a taxable event. The pledged portion of an IRA is treated as a distribution, as IRS Publication 590-B explains. A distribution is exactly what you were trying to avoid.
So lenders look at the balance, confirm it is yours and reachable, and count a percentage of it. The account itself is never encumbered. The IRA sits in your name at your custodian, and the underwriter reads it like any other statement.
Tax treatment varies; consult a qualified professional before making any withdrawal or pledge decision.
A self-directed IRA that buys the property itself is a different structure entirely. That is a specialty product, outside what an asset-based mortgage does, so treat it as out of scope here.
What the Lender Has to Verify
A lender needs to verify only the assets it actually relies on. The CFPB’s small-entity compliance guide lists account statements showing asset values as acceptable verification. Legal commentary on non-QM loans says a lender may rely on assets alone, though it must still weigh the borrower’s ability to repay, as CFS Review notes. This is why statements, not traditional personal-income documentation, carry the file on the qualifier path.
In practice, here is what underwriters look at:
- Statements for each account used, covering the periods listed above for your path.
- Ownership and access. Is the account in your name, vested, and free of restrictions on withdrawal?
- Large deposits. Anything that looks new gets a sourcing question.
- Movement before closing. Funds you plan to shift need an explanation, and the lender re-checks balances.
Across Lendmire’s wholesale network, the files that run into trouble are rarely the ones with too few assets. They are the ones where money moved between accounts after the first statement, or where the same dollars were meant to cover both the down payment and the qualifying balance. A single clean paper trail beats a bigger balance with a messy one.
Same Dollars, One Job
Money you spend on the down payment and closing costs cannot also be counted as qualifying assets. If your IRA is your only large account, the lender nets out what you need at closing before it counts the rest. This is the most common surprise for IRA-heavy borrowers who assumed a balance was a balance.
It is also where the “without withdrawals” promise gets tested. If your down payment has to come from the IRA, then you are taking a withdrawal after all. Plan the down payment from taxable cash, an inheritance, or a business sale, and let the IRA do the qualifying. Reserves work the same way. On the qualifier path none are required at or below 75% loan-to-value. The depletion path has no published reserve months. In both cases the lender can ask for more, subject to underwriting.
Myths About IRAs and Mortgages
“Qualifying on my IRA means I must cash it out.” It does not. The calculation is an underwriting convention, and the balance stays where it is.
“I can pledge the IRA for better terms.” You cannot. A pledge is treated as a distribution, and that is the opposite of the goal.
“Retirement money counts at full value.” Sometimes it does, and sometimes it does not. It is 90% or 100% on the qualifier path depending on age, and 70% on the depletion path.
“Texas has special rules.” None apply to this question. Texas is one of the 16 states where Lendmire arranges consumer mortgages, and the program figures do not change by state. State facts such as local taxes and insurance affect the budget, not the program parameters.
So Which Path Fits You?
Here is the decision in plain terms.
If your usable assets, after the percentages, equal the full loan, start with the qualifier path. It asks for the least paperwork, subject to a 600 credit score and 60 days of seasoning. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
If your assets fall short of the loan but are large, the depletion path can turn them into income. It asks for a stronger asset base, and an IRA counts at 70%.
Honestly, the choice is often a toss-up for borrowers just under 59½. The qualifier path gives 90% credit on retirement money, but the loan has to be fully covered. The depletion path gives 70%, but the loan does not have to be covered by assets. The stronger play depends on how much you are borrowing relative to what you hold.
If you are buying a rental, the depletion path is the only asset-based route, and DSCR is the usual alternative. Qualification on any of these is subject to credit approval, property review and lender guidelines.
The program information on this page can change, and no figure here is a commitment to lend. A lender’s own review decides each file.
Frequently Asked Questions
Can I use my IRA to qualify without withdrawing money?
Yes, on programs that accept retirement assets. The balance counts toward qualifying while it stays in the IRA. On the asset qualifier path it counts at 90% under age 59½ and 100% at 59½ or older. On the asset depletion path it counts at 70% at any age, subject to underwriting.
Do I have to be retired or taking distributions?
No. Neither path requires you to be retired. The depletion path is built to turn balances into income whether or not you draw on them. If you do take distributions, a lender can review them as documented income. The depletion path allows asset-derived income to supplement documented income up to a 45% DTI ratio.
Does a Roth IRA or an inherited IRA count differently?
The published program figures do not break retirement balances out by IRA type, so the lender reviews each account’s vesting and access. Inherited accounts are reviewed case by case. Send your statements and ownership details up front, and the lender will tell you how each account is treated.
Can the same IRA money cover my down payment and also count as an asset?
No. Dollars used to close cannot be counted again as qualifying assets. The lender subtracts what you need at closing before it counts the rest. If the down payment would come from the IRA, that is a withdrawal, which defeats the purpose.
Can I buy a rental property this way?
Only on the asset depletion path, where investment property is a business-purpose loan. Leverage is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor needs a 700 score. If the property’s rent covers its payment, a DSCR loan may fit better.
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 based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker, so the lender’s own underwriting decides each file.
For an IRA-heavy buyer in any state, the best preparation is cheap and boring: keep statements clean, keep balances in place, and decide before you apply which dollars will close the deal.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. 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. CFPB ATR/QM Small Entity Compliance Guide
3. CFS Review: CFPB Addresses Non-QMs Under the Ability-to-Repay Rule
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 a Texas Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can a New Mexico Trust Beneficiary Qualify for a Mortgage on Trust Assets? · Reserves vs Qualifying Assets on an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in Texas
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.