The Quick Read: Yes, usually. A Virginia buyer can count IRA balances toward a mortgage without taking a withdrawal, as long as the lender counts the account and does not take it as collateral. Through select programs, the IRA either helps cover the whole loan on the asset qualifier path or becomes calculated income on the asset depletion path, subject to underwriting.
- The account stays in place. Nothing is sold, cashed out, or distributed to qualify.
- Counting an IRA is not the same as pledging it. Pledging triggers tax consequences.
- On the asset qualifier path, IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- On the asset depletion path, retirement accounts count at 70% at any age, divided over 60 months.
- Qualifying on assets is a consumer-mortgage path for a principal residence or second home. Investment property is available only on the depletion path.
What “Qualifying on IRA Assets” Actually Means
Qualifying on IRA assets means the lender looks at the balance as proof you can repay the loan. You do not draw the money. The account stays where it is, and the statements go into the file.
Lendmire is a mortgage broker. It places asset-based files with select lenders in its wholesale network. The program page for asset-based mortgage programs lays out the two paths. Across the network, every file is fully underwritten. The assets are documented with statements. What the borrower skips is the usual employment file: no traditional personal-income documentation, pay stubs, or employment verification.
Virginia is one of the 16 states where this consumer lending is licensed. The program figures do not change by state. Virginia state facts, such as local prices, are context, never program terms.
Three Things People Mean by “Using an IRA for a Mortgage”
They get three different answers.
Counting the balance. This is the asset-based route. The account is evidence, not a source of cash. Yes, no withdrawal needed.
Pledging the account as collateral. No. This is the trap. IRS Publication 590-B lists using an IRA as security for a loan as a prohibited transaction. The pledged part is treated as a distribution and included in gross income. The 10% additional tax on early distributions may also apply. So the rule is simple: count it, don’t pledge it. In an asset-based file, the lender reviews statements. It does not take a lien on the account.
Buying property inside a self-directed IRA. This is a different product. The IRA itself must be the borrower, and the loan must be non-recourse, according to Advanta IRA. That is not a personal mortgage, and it is not what this article covers.
Which Path Fits an IRA Holder?
Pick the path first. A borrower is qualified on one path at a time, and the two tables never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Cover the entire loan | Become monthly income |
| Income documented | None | Derived from assets |
| IRA / retirement credit | 90% under 59½; 100% at 59½+ | 70% at any age |
| Divisor | None | 60 months |
| Max loan | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property types | Principal residence, second home | Also investment property |
Subject to underwriting, the qualifier path works when your eligible assets, after the credit percentages, equal or exceed the whole loan. Nothing else is needed on income. The depletion path works when your assets are large but spread out, or when the loan is bigger than your assets. The derived income then has to carry the housing payment and other debts through the debt-to-income test.
The Asset Qualifier Path, Step by Step
On this path, the lender adds up what counts and compares it to the loan.
Brokerage accounts, certificates of deposit, money market, and savings all count at 100%. A 401(k) or IRA counts at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
Here is an illustrative case. Take an $800,000 loan. The borrower has $330,000 in brokerage accounts, which counts at 100%, or $330,000. They also have $300,000 in a 401(k) under 59½, counted at 90%, or $270,000. And they have $200,000 in savings at 100%, or $200,000. That is $800,000 of usable assets. It is reviewed on assets alone. The lender’s own calculation governs.
Leverage on this path reaches 80% on a purchase and 75% on a refinance, on a principal residence or second home. Whether cash-out is allowed, and at what leverage, is set by the lender and is not published.
Credit has a 600 minimum score on this path. No reserves are required at or below 75% loan-to-value. Above that, the lender sets them. Loans run up to $4,000,000.
The Asset Depletion Path, Step by Step
This path turns assets into income. It is the one that matters if your IRA is only part of the picture.
1. List the eligible balances. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
2. Add up the usable total after those percentages.
3. Divide by 60 months. The result is monthly qualifying income.
4. Run that income through the debt-to-income test against the housing payment and other debts.
An illustrative case: $1,500,000 in securities counts at 80%, or $1,200,000. Add $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.
Retirement balances are credited at 70%, a haircut that reflects the tax and penalty drag on an IRA. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. If asset-derived income only supplements documented income, up to a 45% debt-to-income ratio, the minimum-assets rule is waived.
The same dollars cannot do two jobs. Money counted as income also cannot be the cash to close. Plan the down payment from a separate account when you can.
Leverage and Credit Ceilings
On the depletion path, a principal residence or second home can go up to 80% on a purchase or rate-and-term refinance. Cash-out tops out at 60%. An investment property reaches 65% on a purchase or rate-and-term refinance, and 60% on cash-out. Cash-out proceeds never count as qualifying assets.
Credit follows the lender’s matrix on this path. A first-time investor needs 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning. These figures are ceilings and floors, not offers, and they are subject to underwriting.
Documentation and Seasoning
The paperwork follows the path.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements 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.
Expect the lender to want proof that you own the account and can reach the money. Large recent deposits draw questions. A fresh rollover or transfer between custodians is the kind of thing that stalls a file. Move money early, not mid-review.
Some asset types are not published as eligible on either path. That includes cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share. The documented route is converting them to a seasoned cash balance in a regulated account. The lender reviews the source.
The depletion path also excludes 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.
Count It or Withdraw It? The Decision
The trade-off is practical.
| Factor | Count the IRA | Withdraw from the IRA |
|---|---|---|
| Account stays invested | Yes | No |
| Taxable distribution | No, on its own | Yes |
| 10% additional tax under 59½ | Not triggered by counting | May apply |
| Reduces assets counted | No | Yes |
Cash taken out of an IRA is a taxable distribution, and the 10% additional tax may apply under 59½, per IRS Publication 590-B. That is why borrowers look at count-don’t-withdraw structures first. Withdrawals can make sense when the IRA is the only source of a down payment. Even then, a withdrawal shrinks the balance the lender counts. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Where Investors Fit
An IRA-heavy buyer who wants a rental has a different route. Investment property is available only on the depletion path, at 65% on a purchase or rate-and-term refinance and 60% on cash-out. Because the loan is business-purpose, it is reviewed differently from an owner-occupied mortgage. The Federal Register notes that investment-purpose loans are treated as business purpose.
For a pure rental, a different program often fits better. Rental-income loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, and the IRA’s job shrinks to showing reserves and the down payment. The bank statement program is for borrowers who document income with deposits. Asset-based mortgages are for balances, not paychecks.
What Can Go Wrong
Four things send IRA files sideways.
- The balance falls short after the haircut. A 70% credit on retirement money cuts deeper than many borrowers expect.
- Double counting. The same dollars can’t be income and cash to close.
- Seasoning gaps. Fresh transfers and young statements miss the window.
- Market drops. A falling balance between statement and review changes the math.
A common point of confusion is the idea that asset depletion means draining the account. It does not. The method is an underwriting calculation, and the assets can stay in the account. Another myth treats counting as pledging. Pledging can also strip IRA creditor protection, according to Gislason & Hunter. Counting a balance toward qualification is not a lien.
Key Terms Defined
Asset qualifier: A path where eligible assets alone cover the entire loan, with no income documented.
Asset depletion: A path that divides usable assets by 60 months to create qualifying income.
Haircut: The share of an asset’s value a lender does not count, such as the 30% cut on retirement balances.
Seasoning: How long funds have sat in an account before they count.
Prohibited transaction: An IRS-defined act, such as pledging an IRA as security, that can turn the IRA into a taxable distribution.
Debt-to-income test: The comparison of qualifying income against the housing payment and other debts.
Virginia Borrowers
Virginia is inside the licensed footprint, and the program figures are the same as anywhere else the program is offered. Local factors such as county taxes and insurance affect the monthly payment, and they belong in your budget. They do not change the asset math. Ask a tax professional about state treatment of any IRA distribution before you choose to withdraw.
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.
Frequently Asked Questions
Can I use my IRA to qualify without withdrawing?
Yes, through select programs and subject to underwriting. The lender counts the balance. On the qualifier path it counts at 90% under 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age. No distribution is needed.
Does a Roth or traditional IRA matter?
Both are retirement accounts, and the program credits them by age and path. The lender will want statements showing ownership and access. Treatment can vary by account type and custodian, and the lender’s review governs.
Do I need to be retired?
No. Retirement is not a requirement. Borrowers under 59½ can qualify, though the qualifier path credits their retirement balances at 90%. Early retirees, business sellers, and people living on a portfolio all fit the profile.
Will I have to start withdrawals after closing?
Qualifying on a balance does not by itself require you to take distributions. The calculation is on paper. Check your loan terms and talk with a tax professional about required minimum distributions on your own account.
Is this the same as borrowing from my IRA?
No. Borrowing against an IRA, or using it as security, is a prohibited transaction under IRS rules. An asset-based file counts the balance and takes no lien on the account. Participant loans exist for some 401(k) plans, as Horizon Trust notes, but IRAs have no such provision.
Lendmire’s asset-based mortgage in Virginia page presents the program for Virginia 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.
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
2. Advanta IRA
3. Federal Register, CFPB Ability-to-Repay and Qualified Mortgage Standards
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 Georgia Buyer Qualify for a Mortgage on IRA Assets Without Withdrawals? · How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage?
Guides: Asset-Based Mortgage in Virginia
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
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.