The Quick Read: Yes, but the portfolio does a different job depending on the loan. On an owner-occupied loan, a lender can turn part of it into paper income. On a DSCR rental loan, it mostly proves you have the cash to close and a cushion afterward, while the property’s rent drives lender review.
- Asset depletion converts a slice of your portfolio into monthly income for a debt-to-income test. You don’t sell anything.
- DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Your stocks fund the down payment, closing costs and reserves.
- Pledging stocks as collateral, or borrowing against them, is a bank or brokerage product with its own risks.
- Stocks are almost never counted at full value. Lenders discount them because prices move.
- Reserves multiply with every property you finance, so portfolio liquidity can cap how fast you scale.
Key Terms Defined
Asset depletion is a way of qualifying where a lender divides eligible assets by a set number of months to create notional monthly income. It is a calculation, not a withdrawal.
DSCR (debt service coverage ratio) compares a rental’s monthly rent to its monthly housing payment. A reading of 1.00 means rent equals the payment.
PITIA is principal, interest, taxes, insurance and any association dues. It is the full monthly obligation on the property.
Reserves are liquid funds left in your accounts after closing. Lenders usually measure them in months of PITIA.
Haircut is the discount a lender applies to an asset. A volatile stock balance counts for less than its market value.
Non-QM means a loan that doesn’t follow the standard rules for conventional mortgages. Asset depletion and DSCR both live here.
SBLOC (securities-backed line of credit) is a credit line secured by your brokerage account. You borrow against the portfolio instead of selling it.
DSCR Calculator
Run the numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Which Path Fits Your Situation?
Four different things get called “using your stocks for a mortgage.” Most confusion comes from mixing them up. This table separates them.
| Route | What the portfolio does | Do you sell? | Main risk |
|---|---|---|---|
| Asset depletion | Becomes qualifying income | No | Needs a large balance |
| DSCR liquidity review | Funds cash to close and reserves | Only if you use shares as cash | Discounted value |
| Pledged-asset mortgage | Extra collateral for the loan | No | Collateral calls |
| SBLOC | Source of borrowed cash | No | Forced sale if prices drop |
Only the first route turns stocks into income. The other three supply cash or collateral.
How Asset Depletion Treats a Stock Portfolio
Asset depletion answers one question: can your portfolio support the payment as if it were income? The lender takes eligible assets, subtracts what you need for the down payment, closing costs and reserves, then divides the rest over a set number of months. The result is monthly income that feeds a debt-to-income ratio.
The divisor is the main lever. Shorter periods produce more income per dollar of assets. Programs differ widely on this, and each lender sets its own rules. Stocks and funds usually count at a discount, and retirement accounts often get different treatment than taxable accounts.
Documentation is simple. Expect recent statements for each account and proof the accounts are yours. You will also need a source for any large recent deposit.
Asset depletion is mainly a tool for owner-occupied buyers and borrowers who need income to clear a debt-to-income test. For a pure rental purchase, a DSCR loan usually makes the income calculation unnecessary. If you hold assets inside a trust, Lendmire’s piece How to Use Trust Assets to Qualify on an Asset Depletion Mortgage covers that wrinkle.
What a DSCR Loan Does With Your Stocks
On a DSCR loan, your stocks never become income. Across the wholesale network of lenders Lendmire works with, these loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Your W-2 or tax return is not the test.
That does not mean the lender ignores your accounts. Skipping the personal income review makes the liquidity review matter more. The underwriter wants to see three things:
1. Enough verified funds for the down payment.
2. Enough for closing costs.
3. Enough left over to cover reserves after closing.
Most programs we place files with want around 6 months of PITIA in reserves. The number moves with leverage, loan size and transaction type. Conservative rate-and-term refinances at modest leverage under $1,500,000 can see reserves waived. Loans above that size typically step up to about 9 months. Reserves also add up across properties. An investor financing three rentals needs cushion for each one.
Here is how a stock-heavy borrower might look. Say you want to buy a rental at 75% LTV on a purchase, so you need 25% down plus closing costs. Your brokerage account is worth roughly twice that combined cash need. After the lender discounts the stocks, the account still covers the down payment and costs. It also leaves a reserve cushion. The file works on liquidity. The rent-to-payment ratio then has to clear the program’s coverage floor on its own. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Those two tests are separate. Many programs start at 1.00 coverage, and stronger ratios open better pricing and leverage. A separate select-lender path goes below 1.00, with leverage and terms adjusted. A big portfolio does not rescue weak rent, and strong rent does not excuse thin reserves.
Clearing 1.00 also doesn’t mean the property cash flows. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities and capex sit outside the calculation.
How Much Do the Stocks Actually Count?
Less than the screen shows. Lenders discount stock and fund balances because the value can drop between application and closing. Retirement accounts get a bigger discount in many programs, and some require the funds to be vested and accessible.
Discount levels differ by lender, and no neutral source publishes one standard figure. Your broker can tell you what each program in the network applies before you commit to a purchase. Do not build a deal around the full balance.
A few edge cases deserve attention:
- Retirement accounts. The vested balance, access rules and your age all matter. Some employer plans lock funds while you are still employed.
- Concentrated single-stock positions. One company’s shares behave differently from a diversified fund. Lenders tend to treat them more cautiously.
- Restricted or unvested shares. If you can’t access the shares today, they generally can’t count as available funds.
- Account ownership. Funds generally need to sit in your name or your entity’s name and be documented. Entity-titled files are subject to lender program eligibility.
- Large deposits. Moving money around right before applying invites questions. Keep a paper trail for anything unusual.
Should You Sell the Stocks or Keep Them?
It is a genuine tradeoff. Selling is simple and the cash is clean. But selling appreciated shares can trigger capital-gains tax, and you give up future growth. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Keeping the shares is the better play when your portfolio is large relative to the purchase and your account is already well documented. You can let some shares count toward reserves without touching them. Selling is the better play when the stock is concentrated, you were planning to diversify anyway, or you don’t want market risk on top of a mortgage.
Another option is the larger down payment. More cash down lowers the monthly payment and can lift the coverage ratio. It never erases leverage caps, credit floors, reserve rules or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Pledging and Borrowing Against Stocks: Read the Fine Print
A pledged-asset mortgage uses your securities as extra collateral instead of a cash down payment. A securities-backed line of credit lets you borrow against the portfolio and spend the cash. Both are bank or brokerage products. They don’t follow DSCR guidelines, so treat them as separate decisions.
The risk is real. Fidelity’s securities-backed line of credit page describes non-retirement assets being pledged as collateral and notes that the lender can require more collateral if values fall. Fidelity also lists a typical minimum pledge of $500,000, so these lines are built for larger portfolios. Schwab’s overview of borrowing against your assets describes the same exposure: if the account drops, you may have to add collateral or sell shares, often at a bad moment.
Two points matter for mortgage purposes:
- Borrowed funds are not the same as owned funds. A lender will ask where your down payment came from. Money drawn on a loan can be reviewed differently than money already in your account. Confirm with the lender before you draw.
- An undrawn line is not cash on hand. It usually doesn’t count toward reserves.
Put plainly, pledging can protect you from selling at the wrong time. It can also turn a market dip into a forced sale at the same moment your rental is stretched.
Why Lenders Can Consider Assets at All
Business-purpose investor loans are reviewed differently from a standard owner-occupied mortgage. For consumer mortgages, the federal CFPB ability-to-repay guide lists eight factors a creditor must consider, and assets are one of them. That is why asset-based products exist. DSCR loans are designed for non-owner-occupied investment properties, so you will not use this machinery for a rental.
Common Mistakes and Myths
“I have to sell my stocks.” No. Asset depletion is a calculation, and DSCR only needs verified funds.
“DSCR means no asset review.” The opposite is closer to the truth. Without an income test, the liquidity check carries more weight.
“Stocks count like cash.” They are discounted, and retirement accounts often more so.
“One depletion formula exists.” Divisors vary widely by program.
“A bigger portfolio fixes a weak property.” It doesn’t. The rent still has to cover the payment, and the property still has to be eligible.
Eligibility rules also apply to the property itself. Manufactured homes (single- and double-wide), log homes and barndominiums are not offered in these programs, regardless of how strong your portfolio is.
What the Strongest Files Look Like
Across the lenders in the network, a few patterns separate easy files from hard ones:
- Credit at 700 or above opens the strongest leverage tiers. Most programs want around 660, and a 620 floor exists in parts of the network.
- Purchases typically land at 75% to 80% LTV on an investment property. Select high-leverage programs reach 85% with roughly a 700+ score.
- Cash-out refinances on standard rentals top out around 75% LTV, with about 6 months of seasoning as the common expectation.
- Loan sizes run up to $3,000,000 on standard programs (smaller balances available through select lenders). Above $2,500,000 the network generally holds to 30-year fixed structures.
- Account statements are current, and no large deposit goes unexplained.
Short-term rentals follow tighter rules. Purchases go up to 75% LTV, refinances come in around 70%, and cash-out on short-term-rental collateral is 70%. Expect a 640+ score and about 12 months of hosting history. Coverage has a 1.00 floor on purchases and on refinances. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Program details change, every file is underwritten individually, and none of this is a commitment to lend. Lendmire’s complete DSCR loans guide covers how the programs fit together.
Frequently Asked Questions
Do I have to sell my stocks to buy a rental with a DSCR loan?
No. The lender needs verified funds for the down payment, closing costs and reserves. Shares can count toward reserves while still invested, though a discount is typically applied. If you sell shares for the down payment, the proceeds must be documented.
Does my stock portfolio increase my DSCR?
Not directly. DSCR is rent divided by PITIA. A larger down payment from your portfolio lowers the payment, which can lift the ratio. The portfolio itself is not part of the calculation.
Are retirement accounts treated like brokerage accounts?
Often not. Many lenders apply a larger discount to retirement balances and want the funds vested and accessible. Treatment varies by program, so ask before you assume.
Can I use a securities-backed loan for the down payment?
Sometimes, but the lender will review the source of funds and how the new debt affects your file. Market drops can trigger collateral calls. Confirm with the lender before you draw on the line.
Is asset depletion better than DSCR for a rental?
For a pure rental, DSCR is usually simpler because the property’s rent carries the file. Asset depletion makes more sense when you need to show personal income, such as for an owner-occupied purchase.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. As a broker with DSCR investor programs across 41 markets, including Washington, D.C., it arranges financing through select lenders in its wholesale network. Call 828-256-2183 to talk through your portfolio and your next deal.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of traditional personal-income documentation, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 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 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. Fidelity: Securities-Backed Line of Credit
2. Schwab: Borrowing Against Your Assets
3. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Pledged-Asset Mortgage vs PAL vs Margin Loan for a Concentrated-Stock Buyer · How to Choose the Right DSCR Lender for a Growing Rental Portfolio · Pledged-Asset Mortgage vs PAL vs Margin Loan With No Current Employment
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.