The Quick Read: It depends on the path, and no single national cap applies: the asset depletion path runs a debt-to-income test with a cap the lender sets, while the asset qualifier path skips the ratio and tests whether eligible assets cover the whole loan, subject to underwriting. A borrower is qualified on one path at a time. The rest of this piece shows how each path treats the ratio and what to do if the number is too high.
- The asset depletion path turns usable assets into monthly income, then runs that income through a standard debt-to-income test.
- The asset qualifier path documents no income and no employment. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount.
- The depletion cap is set by the lender’s matrix. When asset income supplements documented income, the network figure is a 45% ratio.
- Market surveys report that some non-QM lenders will go as high as 50%. Treat that as a market statistic, not a promise on any one file.
- Business-purpose rental loans are a different product and do not use a personal debt-to-income test.
Why Do Two Different Answers Exist?
Because the program has two separate ways to qualify, and only one of them uses a ratio. Most of the confusion online comes from pages describing one path as if it were the whole product.
The asset qualifier path asks one question: do your eligible assets cover the loan? If they do, no income is documented. The assets themselves are documented, with statements for every qualifying account. “No income documentation” never means “no documentation.”.
The asset depletion path asks a different question: can the income your assets produce carry the housing payment and your other debts? That question is a debt-to-income question, so a cap applies.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Debt-to-income test | None run | Yes, on derived income |
| What the lender weighs | Assets versus loan amount | Derived income versus debts |
| Purchase leverage | Up to 80% (primary or second home) | Up to 80% primary or second; 65% investment |
| Cash-out leverage | Not published | 60% on all occupancies |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Best fit | Assets exceed the whole loan | Assets need to become income |
These figures are ceilings and floors through select programs, subject to underwriting. They are not offers. On the qualifier path, refinance leverage tops out at 75% on a principal residence or second home. Investment property is available only on the depletion path.
How Asset Income Gets Into the Ratio
On the depletion path, assets become income in four steps, and the debt-to-income test only starts at step three. Across the wholesale network, the fixed steps are the same on most files, and the lender’s own calculation governs.
1. Count eligible assets. Each account type gets a haircut. On the depletion path, cash accounts and certificates of deposit count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units do not count.
2. Divide by 60 months. Usable assets divided by 60 gives the monthly qualifying income. Cash-out proceeds never count as qualifying assets.
3. Run the ratio. The derived income goes into a standard debt-to-income test. The debts are the new housing payment (principal, interest, taxes, insurance and any HOA dues) plus the liabilities on your credit report.
4. Review the rest of the file. Credit, the property and statement seasoning are reviewed like any other file. Statements 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.
There is also a floor before the ratio matters. The depletion path needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. It also needs at least $250,000 in liquid assets when depletion is the only income source.
Credit follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700. Housing history is 0x30x12, and a housing event needs 4 years of seasoning.
What Is the Actual Cap?
For asset income as the only income, the cap is set by the lender’s matrix, and the network does not publish a single figure. When asset income supplements documented income, the published ceiling is a 45% debt-to-income ratio, and the minimum-assets rule is waived in that case.
Market coverage gives a wider picture. A Scotsman Guide article on non-QM lending says some lenders will underwrite borrowers with debt-to-income ratios up to 50%, against a typical 43% on government-sponsored loans. The article is several years old, so read it as directional. The network figure is the 45% supplemental ratio above.
The practical read for a borrower: expect a flat percentage cap in the 40s to low 50s depending on program.
Who Sets the Limit?
The lender does. No federal rule fixes a ratio for this kind of loan. The Consumer Financial Protection Bureau’s official commentary on the ability-to-repay rule says the rule does not prescribe a specific monthly debt-to-income ratio. It requires the lender to consider either the borrower’s debt-to-income ratio or residual income, and to verify what it relies on. The same commentary lets a lender weigh compensating factors, including a borrower’s assets, when finding that a borrower can repay despite a higher ratio.
That is why the number varies by program. It also explains why the figure many borrowers have heard, 43%, is not a law. It was a test inside one category of qualified mortgage, and the CFPB’s General QM final rule replaced it with a price-based limit. Even then, the lender must still weigh debt-to-income or residual income.
For the borrower, this means two things. The cap is a program overlay, so it differs between lenders in the same network. And the lender has room to look at the whole picture, which matters when your ratio sits near the edge. Lendmire’s piece How Residual Income Shifts the Divisor on an Asset Depletion Mortgage covers one way that flexibility shows up.
Same Borrower, Two Paths
The same balance sheet can produce a ratio test on one path and no ratio on the other. These two examples use the program’s illustrative shapes, and the lender’s own calculation governs.
Asset qualifier path. A borrower seeks an $800,000 loan on a purchase of a principal residence. She holds $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000) and $200,000 in savings (100% counts, so $200,000). That is $800,000 of usable assets, which equals the loan. She is reviewed on assets alone, with no income documented and no debt-to-income ratio run. Each account needs 60 days of seasoning and two months of statements.
Asset depletion path. A retiree holds $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100% counts, so $300,000). That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income must carry the new housing payment and every other monthly debt inside the program’s cap. Pay off a car loan or a card balance and the ratio improves without touching the asset side.
The qualifier path is cleaner when the assets exceed the loan. The depletion path is the tool when they do not, because it lets a smaller balance support a larger loan through income instead of coverage. This is a genuine trade: the ratio gives you flexibility on loan size, and you pay for it with a cap and a stricter leverage table.
Funds used for the down payment and closing costs generally come out of the usable balance before the divisor. You cannot count the same dollar as income and as cash to close.
Which Debts and Costs Count
Every recurring obligation that lands on the credit report counts in the back-end ratio, along with the new housing payment. Think of it as a short list:
- The new housing payment: principal, interest, taxes, insurance, and HOA dues where they apply.
- Auto loans and leases.
- Student loans.
- Credit card minimums.
- Mortgages and other obligations on properties you already own.
Front-end ratio means housing cost alone against income. Back-end ratio means housing cost plus all other debts. Most caps apply to the back-end number, but the lender’s matrix governs which one a given file uses.
What If the Ratio Is Too High?
Fix it in this order, because the first two cost the least and move the number the most. All of this is subject to underwriting.
1. Pay down installment and card debt. Removing a monthly obligation lowers the numerator without changing income.
2. Lower the loan amount. A larger down payment cuts the housing payment. It also fits inside the leverage tables.
3. Move the asset mix. Cash and certificates of deposit count at 100% on the depletion path, while securities count at 80% and retirement accounts at 70%. A cleaner, more liquid balance raises derived income.
4. Add documented income. Asset income may supplement documented income up to the 45% ratio, and the minimum-assets rule is waived.
5. Check the other path. If eligible assets cover the whole loan, the qualifier path runs no ratio at all.
Lenders may weigh compensating factors on a borderline file, such as large balances or strong credit, but exceptions are a lender decision, not a right. Treat a ratio over the cap as a restructuring problem, not an appeal.
For retirement accounts, the age rule matters. 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.
Cryptocurrency, precious metals, collectibles and pledged or 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.
Does This Fit a Rental Investor?
Sometimes, but it is usually the wrong tool for a portfolio. The depletion path allows investment property at up to 65% leverage on a purchase or rate-and-term refinance and 60% on a cash-out. Your personal ratio, not the rent, is the gate.
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. They qualify primarily on property-level rental income covering the payment, subject to lender guidelines, so personal debt-to-income is not the test. Some lenders in the network will also review coverage below 1.00, with leverage and terms adjusting.
The split for an investor is simple. Asset-based financing suits a home the borrower will live in, or a second home. DSCR suits the next rental. The complete DSCR loans guide walks through that side of the decision. If the plan involves leaning on cash balances instead, the relevant next read is Lendmire’s article on whether residual income can replace liquid reserves on an asset depletion mortgage, found here.
Tax treatment varies; consult a qualified professional.
Myths on This Question
| Myth | What is true |
|---|---|
| A federal 43% cap applies | No fixed federal cap on this loan type |
| Non-QM means the ratio does not matter | The lender must still weigh debt or residual income |
| Every asset program runs a ratio | The qualifier path runs none |
| Big balances skip credit review | Credit score and housing history still apply |
| Assets must be sold to qualify | The depletion calculation is a paper formula |
Questions to Ask Before You Apply
Ask each lender these before you spend time on a file:
- Which path will my file run on, and why?
- What is the ratio cap on that path, and does it change if I add other income?
- What haircut applies to each of my account types?
- Which funds are subtracted for the down payment and closing costs?
- Does the lender consider residual income, and is that an alternative to the ratio?
- What are the seasoning and statement-age requirements for my accounts?
Key Terms Defined
Debt-to-income ratio: Your monthly debt payments divided by your monthly qualifying income, shown as a percentage.
Front-end ratio: Housing cost alone, measured against qualifying income.
Back-end ratio: Housing cost plus all other monthly debts, measured against qualifying income.
Haircut: The share of an account balance that does not count toward qualifying assets.
Divisor: The number of months, 60 on the depletion path, that usable assets are divided by to produce monthly income.
Asset qualifier path: The route where eligible assets must cover the entire loan and no income is documented.
Asset depletion path: The route where usable assets are converted into monthly income and run through a debt-to-income test.
Frequently Asked Questions
Can the lender approve a ratio above its usual cap?
Only at the lender’s discretion. The official commentary lets a lender weigh compensating factors, including assets, when judging repayment ability. On an actual file, that means large balances and strong credit may help. It does not mean the cap is negotiable, and the lender’s guidelines and underwriting decide.
Does the ratio apply if I have no job?
On the asset depletion path, yes. Your derived income is the only income, so the ratio tests that income against the housing payment and other debts. The program also requires at least $250,000 in liquid assets when depletion is your only income source. On the asset qualifier path, no income is documented and no ratio is run.
Do retirement accounts count toward the ratio?
Yes, at a reduced share. On the depletion path they count at 70% at any age. On the qualifier path they count at 90% under age 59½ and 100% at 59½ or older. Either way, the balance must be documented with statements, and the lender’s calculation governs.
Is a DSCR loan the same as an asset depletion loan?
No. A DSCR loan is reviewed primarily on the rental income of the property, so your personal ratio is not the test. An asset depletion loan is reviewed on your balance sheet and runs a ratio. DSCR is a business-purpose loan for non-owner-occupied investment property, subject to lender guidelines.
Is the 43% figure a law?
No. It was a limit inside one category of qualified mortgage, and that category now uses a price-based test. The lender must still consider debt-to-income or residual income. The cap on this program is a lender and program overlay.
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. As a broker, Lendmire arranges these consumer mortgages through select lenders in its network, with consumer lending available in 16 states, and every file is underwritten individually. This is not a commitment to lend.
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.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Scotsman Guide, non-QM lending coverage
2. CFPB, official commentary on the ability-to-repay rule
3. CFPB, General QM final 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: How Asset Depletion Converts Savings Into Qualifying Income · How Asset Depletion Counts Income for a Rental Portfolio Buyer · How an Asset Depletion Mortgage Works
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.