The Quick Read: It depends on who lives in the home and how the lender classifies that occupancy, because an asset-based mortgage is a consumer loan with no rent-based test, so your assets can qualify you for a Pennsylvania purchase, but whether a parent-occupied house fits the program is decided file by file, subject to underwriting.
- An asset-based mortgage is reviewed against balances, not your paycheck. The assets are still fully documented.
- There are two paths. On the asset qualifier path, eligible assets must cover the entire loan. On the asset depletion path, assets are divided by 60 months into qualifying income.
- The loan must fit an occupancy type the program offers: principal residence, second home, or (on the depletion path only) investment property.
- A home your parents live in, and you do not, is the tricky case. Lenders differ on how they classify it.
- A DSCR loan is usually the wrong tool if your parents will live in the house. Family occupancy generally conflicts with that product.
What Is an Asset-Based Mortgage, Really?
An asset-based mortgage is a way to qualify, not a separate kind of house loan. The lender looks at what you own instead of what you earn. That suits retirees, people who sold a business, heirs, and households living off a portfolio.
Through select programs in Lendmire’s wholesale network, there are two ways to do it. A borrower is on one path at a time. Never both.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Loans go up to $4,000,000, subject to underwriting.
The asset depletion path. The lender adds up your usable assets, divides by 60 months, and treats the result as monthly income. That income must carry the housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000.
“No income documentation” never means “no documentation.” You hand over statements for every account you count. Think of it as swapping pay stubs for balances.
Lendmire is a broker. It arranges these loans through select lenders, and the lender’s own review governs every file. Consumer mortgage lending is licensed in 16 states, Pennsylvania among them, and the program figures here do not change by state.
How Do Assets Turn Into a Coverage Figure?
Each asset type counts at a set percentage, and the table depends on which path applies. The paths use different tables, so don’t blend them.
Qualifier path (what counts toward the loan amount):
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% if you are under age 59½, 100% at 59½ or older.
- Accounts combine.
Here is an illustrative case. Say the loan is $800,000. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). Usable assets total $800,000. That covers the loan on assets alone.
Depletion path (what counts toward income):
- Cash accounts and CDs: 100%.
- Securities: 80%.
- Private stock: 75%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
- Not eligible: 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.
Another illustration. You hold $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 usable. Divide by 60 months and you get $25,000 of monthly qualifying income. That figure then has to carry the housing payment and your other debts.
Both examples are illustrations. The lender’s own calculation governs.
Crypto, precious metals, collectibles, and borrowed or pledged 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.
Can You Use It to Buy a Home for Your Parents?
Maybe. The answer turns on occupancy, not on your assets. Your balances can do the qualifying. The open question is what the lender calls a home where your parents live and you don’t.
The program offers three occupancy types. A principal residence is the home you live in. A second home is one you keep for your own use. Investment property is available only on the depletion path.
A house you buy for your parents doesn’t match the first one, since you don’t live there. A second home usually means you use the property yourself. Lenders differ on whether a parent-occupied purchase can be placed there. Some programs in a network will look at it. Others won’t.
That leaves the investment classification on the depletion path. Leverage there is tighter, and it comes with a higher credit bar for first-time investors, as covered below.
I won’t tell you a parent-occupied purchase is automatically accepted, because it isn’t. Occupancy is declared at application, and the lender reviews it. Be straight about the plan up front. Misstating who lives in the home puts the loan at risk.
What Leverage and Credit Apply Here?
Leverage depends on the path and the occupancy type. These are ceilings, not offers, and they are subject to underwriting.
| Path and occupancy | Purchase | Refinance |
|---|---|---|
| Qualifier, principal residence or second home | Up to 80% | Up to 75% |
| Depletion, principal residence or second home | Up to 80% | Rate-and-term 80%, cash-out 60% |
| Depletion, investment property | Up to 65% | Rate-and-term 65%, cash-out 60% |
Cash-out proceeds never count as qualifying assets on the depletion path. Whether the qualifier path allows cash-out is set by the lender and isn’t published, so don’t count on it.
On credit, the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix for score and loan amount. A first-time investor on the depletion path needs a 700.
Housing history is typically 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event such as a foreclosure needs four years of seasoning on the depletion path.
Why Is a DSCR Loan the Wrong Tool If Your Parents Will Live There?
A DSCR loan is the wrong fit for a home your parents will occupy. 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.
The product rests on rent. The lender divides the property’s monthly rent by the full housing payment (principal, interest, taxes, insurance, and any HOA dues). The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
Family living in the home breaks that logic in two ways.
First, the occupancy certification. On a DSCR file you typically sign a statement that neither you nor family members will occupy the property. Some forms use a short annual limit, and others say at any time. Federal rules for business-purpose credit set a similar bar for owners: under the CFPB’s rule on rental credit, a property doesn’t count as non-owner-occupied if the owner expects to occupy it more than 14 days in the coming year. That test is about the owner. Family exclusions come from lender product rules.
Second, the rent. A parent living rent-free, or at a discount, doesn’t support the coverage ratio. Rent is typically the lower of the lease or market rent. A discount cuts coverage directly.
Does an LLC fix this? Not on the occupancy side. The entity’s members and their families usually fall under the same language, subject to lender program eligibility. Calling a purchase an investment doesn’t make it one, either. A law-firm analysis of business-purpose loans lists factors such as how involved the borrower is in managing the property and how much of the borrower’s income it produces. It also warns that business purpose does not mean exempt from compliance.
So when are parents and DSCR compatible? Only when they are true tenants. That means a separate household, a market-rate lease, and a bank-record trail of rent payments. Even then, some programs exclude relatives as tenants and others scrutinize it. A few lenders in a network will review a related-party lease. The strictest overlays won’t. If you go that way, disclose it first.
For the broader mechanics, see Lendmire’s complete DSCR loans guide.
Whose Assets Count: Yours, Your Parents’, or Both?
The assets that count are generally those of the people on the loan. If you are the only borrower, your balances qualify you. Your parents’ savings don’t help unless a parent is also a borrower, subject to underwriting.
If a parent is added as a co-borrower, accounts of borrowers on the same loan typically combine, and the lender reviews each account against the seasoning rules. Adding a parent also adds that parent’s credit, debts, and title position to the file.
The same dollar can’t do two jobs. Money you send to the seller or the title company as a down payment, or to pay closing costs, leaves the account. Don’t assume it keeps counting as a qualifying balance afterward. The lender’s own calculation governs, so have the lender run it with your actual statements.
On a related note, trust-held balances raise their own questions. Lendmire’s piece How to Use Trust Assets to Qualify on an Asset Depletion Mortgage walks through them.
What Does Seasoning Mean for Your Statements?
Seasoning is the length of time money has sat in an account before the lender counts it. It keeps a last-minute deposit from passing as savings.
On the qualifier path, the lender wants 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that depletion-path seasoning.
Depletion-path minimums are higher than many people expect. Qualified assets generally need to be the lesser of $1,000,000 or 1.25 times the loan balance. They never drop below $250,000 liquid when asset depletion is your only income source. 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.
Reserves are simple on the qualifier path: none required at or below 75% loan-to-value, and above that the lender sets them. The depletion path has no published reserve months.
Which Route Fits Which Family?
Buying for parents is a family problem first and a loan problem second. Here is how the usual routes compare. The agency path is described as that program’s own rule, not this one’s.
| Route | Who it fits | Main trade-off |
|---|---|---|
| Asset qualifier path | Asset-rich child, no income documented | Assets must cover the whole loan |
| Asset depletion path | Child whose balances can be turned into income | Haircuts and a 60-month divisor |
| DSCR loan | Parents as true market-rate tenants | Family occupancy generally not allowed |
| Agency family-opportunity loan | Parent can’t afford a mortgage alone | Income-based, a conventional product |
| Co-borrower or gift | Parent has assets or credit to contribute | Adds a second file, or tax and title questions |
| Cash | Child with a large liquid balance | Ties up the portfolio |
Fannie Mae and Freddie Mac have a path for buying a home for elderly parents or disabled adult children, historically called the Family Opportunity Mortgage. Under that agency rule, the home can be treated like a primary residence, and the parent can’t afford a mortgage alone. It is an income-based conventional product, not an asset-based one. If you have documented income, price it against the asset-based route.
My honest read: if you are asset-rich and income-light, the asset-based route is the better fit than a DSCR loan whenever a parent lives in the house. If a parent is paying real market rent, a DSCR file might work, but only if the program allows relatives as tenants.
Pennsylvania Notes (Context, Not Program Rules)
The program figures above don’t change in Pennsylvania. State facts are context only. Pennsylvania is one of the 16 states where Lendmire arranges consumer mortgages through its network.
Intra-family purchases raise title and deed questions: whose name goes on the deed, whose goes on the loan, and what happens if a parent passes away or moves. Those are not loan-program questions. Ask a Pennsylvania title professional and an estate attorney before you sign anything. Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset qualifier path: A way to qualify where eligible assets must cover the full loan amount and no income is documented.
Asset depletion path: A way to qualify where usable assets divided by 60 months become monthly qualifying income.
Haircut: The share of an asset’s balance the lender doesn’t count, such as 20% off securities.
Seasoning: How long money must sit in an account before it counts.
Occupancy: How the property will be used: principal residence, second home, or investment.
DSCR: Monthly rent divided by the full monthly housing payment, used on rental investment loans.
When Is This the Wrong Tool?
Skip the asset-based route in these cases:
- Your assets are thin. Both paths need real balances, and the depletion path requires substantial minimum assets.
- You want to keep every dollar invested. Assets used for the down payment leave the account.
- You can’t be honest about occupancy. A plan the lender won’t accept is a bad file.
- You are planning to move your parents in later. If a parent will move into a DSCR-financed property, that conflicts with the signed certification. The usual fix is to refinance into an owner-occupied or second-home product before the move, not after.
- A parent is covering a big share of the cost. Co-borrowing or a gift may serve better, with its own rules.
Another point for the portfolio. Your investments stay invested, but market swings change the balances the lender sees at application. A dip right before you apply can shrink a coverage figure.
What Does the Process Look Like?
1. Decide the plan. Who lives there, who pays, and who holds title. Settle it before you apply.
2. Pick the path. Assets covering the loan point to the qualifier path. Assets turning into income point to the depletion path.
3. Gather statements. Two months per account on the qualifier path. On the depletion path, one statement at least 120 days old and one within 45 days.
4. Declare occupancy honestly. The lender reviews it, and a signed statement follows.
5. Review the numbers. The lender runs its own calculation. As a consumer mortgage, the loan comes with standard consumer disclosures.
A typical document list: statements for each qualifying account, ID, credit authorization, the purchase contract, and proof of the source of any large deposit. Nothing here is a commitment to lend.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The lender counts balances at the percentages above. Your accounts stay invested. Funds you spend on the down payment and closing costs do leave the account, though, so plan for that.
Can I use my parents’ assets?
Only if a parent is a borrower on the loan, subject to underwriting. Then accounts of the borrowers on the loan typically combine, and each account is reviewed for seasoning. Gifts and title questions are separate.
Do I have to live in the home?
For a principal residence, yes. For a second home, the lender expects you to use it. For an investment classification on the depletion path, you don’t live there, but leverage is lower and first-time investors need a 700 score. A parent-occupied house is reviewed case by case.
Does this work in Pennsylvania?
Yes. Pennsylvania is one of the 16 states where Lendmire arranges consumer mortgages through select lenders. Program figures don’t change by state. Local taxes, insurance, and prices are context and not loan parameters.
Can I use a DSCR loan if I charge my parents market rent?
Sometimes, but not on programs that bar family occupants. If a program does allow it, expect a separate-household requirement, a market-rate lease, and bank-record rent payments. Disclose the relationship first, since underwriters scrutinize related-party leases.
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.
Whatever route you choose, the occupancy answer comes first and the loan structure follows it.
Lendmire’s asset-based mortgage in Pennsylvania page presents the program for Pennsylvania borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB – Regulation Z §1026.3 and commentary
2. Hunton (via Lexology) – Beware of “Business Purpose”
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does a Securities-Backed Line of Credit Hurt Your Asset-Based Mortgage Application? · Can You Get an Asset Depletion Mortgage After a Foreclosure or Short Sale? · Is an Asset-Based Mortgage Reported to Credit Bureaus Like Any Other Mortgage?
Guides: Asset-Based Mortgage in Pennsylvania
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.