The Quick Read: An asset depletion loan is a qualification method, not a separate loan product. The lender converts a portion of your liquid assets into a monthly income figure, so you can qualify without leaning on traditional personal-income documentation. Nothing is sold and nothing is withdrawn, because the assets stay in your accounts. Through select wholesale programs, subject to full underwriting, that figure is set by an asset allowance divisor of 36, 60 or 84 months.
- Eligible liquid assets are discounted, and money committed to the deal comes out first.
- The divisor is the biggest swing factor in the income you can show.
- Retirement accounts count at 70% (80% at age 59.5 and older).
- The path suits high-net-worth borrowers whose taxable income understates their wealth.
- Assets used for income generally cannot also fund the down payment or reserves.
Picture a founder who sold part of a company, or a physician with a large brokerage account and heavy write-offs. Traditional personal-income documentation shows modest income. The balance sheet tells a different story. Asset depletion is built for that gap.
What Is an Asset Depletion Loan, Really?
It is a way of proving you can repay, using what you own instead of what you earn. The name misleads. Nobody “depletes” anything. The underwriter runs a calculation on paper, and your portfolio stays intact and untouched. The OCC describes the same practice as using assets to calculate a hypothetical cash annuity stream that is added to other income.
Three points clear up most confusion:
- It is not a product. It is a qualifying method applied to a mortgage, usually a non-QM one.
- The assets are not collateral. The property secures the loan. Your accounts simply support the income figure.
- It is not the same as DSCR. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Asset depletion tests the borrower’s balance sheet. Lendmire’s complete DSCR loans guide covers the property-income side in depth.
How Does Underwriting Treat It, Step by Step?
Underwriters follow the same sequence on most files across the brokerage’s wholesale network. Each step shrinks the number, so the order matters.
1. Inventory eligible assets. These are statement-verified accounts such as cash, brokerage and retirement. Business funds, gifts, trusts other than a revocable living trust, unvested stock and cryptocurrency do not count through the programs the brokerage places files with.
2. Apply the haircut. Retirement accounts count at 70%, or 80% for a borrower at 59.5 or older, because access and penalties reduce their usable value.
3. Subtract money committed to the deal. Down payment, closing costs and reserves come out before anything is divided. The same dollars cannot do two jobs.
4. Divide by the divisor. Under the asset allowance path, liquid assets are divided by 36 months when the result supplements other income and DTI is at or below 60%. The divisor is 60 months when DTI is above 60%. It is 84 months when assets are the standalone income source or the loan exceeds $3,500,000.
5. Run the DTI. The resulting figure is treated like salary and sits beside any other income and debts. Debt-to-income can go up to 50% on the bank-statement side of the network.
6. Underwrite the rest. Credit, the property, leverage and reserves are all still reviewed.
The divisor does the heavy lifting. A divisor that is twice as long produces half the monthly income from the same balance. Ask which divisor a program uses before you compare anything else.
What Structures Exist?
There are two asset paths, and they behave differently. Both apply to primary and second homes, not to investment property, through select wholesale programs, subject to full underwriting.
| Factor | Asset Allowance | Assets-Only |
|---|---|---|
| Role | Supplements or stands in for income | Sole basis for qualifying |
| Math | Liquid assets ÷ 36, 60 or 84 months | No DTI calculated |
| Liquidity test | Divisor-driven | U.S. liquid assets ≥ loan plus costs |
| Leverage on asset paths | 80% maximum | 80% maximum |
The 80% ceiling applies to files qualified on an asset path. The higher cells in the size ladder below, such as 90% and 85% on a primary purchase, belong to files documented on bank-statement deposits, not to the asset paths.
On assets-only, liquid U.S. assets must equal the loan amount, plus closing costs, plus sixty months of any net loss on other residential property. That is a heavy liquidity bar, and it surprises people.
Many borrowers combine methods. A business owner might use twelve or twenty-four months of bank statements for part of the picture and add an asset allowance on top. Deposits are divided by the statement months after an expense ratio, and transfers from the borrower’s own business into a personal account count at 100%.
Where Does the General Rule Break?
The basic formula holds until one of these edge cases appears.
Retirement accounts. Age changes the haircut, as noted above, and early-withdrawal penalties can matter. A 45-year-old and a 62-year-old with identical balances will not show the same income.
Money that is locked up. The total liquidity you need is larger than the headline balance. If the assets that produce income also have to cover the down payment, closing costs and reserves, the balance runs out fast. Reserves alone run 3 months to $500,000, 6 months to $1,500,000 and 9 months above that, on most files.
Investment property. Here is the catch: the asset paths are limited to primary and second homes. An investor buying a rental will typically qualify through bank statements, a profit-and-loss method capped at 80%, or the property’s own rent coverage instead. Federal rules treat credit to buy non-owner-occupied rental property as business purpose, which is part of why rentals follow a different path.
Very large loans. Above $3,500,000 the asset allowance uses the 84-month divisor. Above $4,000,000, everything is reviewed case by case before submission, so no leverage figure at that size is a flat promise.
Documentation still applies. Qualifying on assets does not mean skipping proof. The ability-to-repay rule lets a lender consider income or assets, other than the value of the home, and expects those assets to be verified with reliable third-party records such as statements.
What Do Size and Leverage Look Like?
Leverage steps down as the loan grows, and second homes run about five points lower. For a primary residence purchase documented on bank statements, through select wholesale programs, subject to full underwriting, typical ceilings run like this:
| Loan Size | Primary Purchase LTV | Typical Credit |
|---|---|---|
| $300K–$1M | 90% | 680+ |
| $1M–$1.5M | 85% | 700+ |
| $2M–$2.5M | 80% | 720+ |
| $3M–$3.5M | 75% | 720+ |
Past $4,000,000 the picture changes. A bank portfolio jumbo program’s own ladder begins above $4,000,000, overlaps the portfolio program to $6,000,000, and stands alone above that: 65% to $5,000,000, 60% to $10,000,000 and 55% to $30,000,000, always on review, case by case. Total sizes run from $300,000 to $30,000,000 through two wholesale programs: a portfolio non-QM program to $6,000,000 and the bank portfolio jumbo program.
Credit starts at a 660 floor on the portfolio program, rising to 700 above the super-jumbo line. Overlays above $3,500,000 on a primary residence include a 0x30x24 housing history and 48-month seasoning on any credit event.
Why Do Lenders Treat Assets This Way?
Lenders discount assets because balances move. A portfolio can fall, and a retirement account carries tax and penalty friction. The haircut and divisor price in that uncertainty, which is why different programs land in different places.
A shorter divisor gives more buying power but demands more confidence in the assets. A longer divisor is more conservative and stretches the same balance across more months. Neither is right for everyone. The fit depends on your total liquidity, your other income and the loan size.
Files stumble less on the formula than on sequencing. A borrower counts the same brokerage account for income, the down payment and the reserves. The underwriter counts it once. Running that subtraction yourself before you apply saves a painful surprise.
What Does the Investor Decision Look Like?
Start with the property’s use, because it decides the path.
- Buying a primary or second home with large liquid holdings and thin taxable income: Asset allowance or assets-only deserves a look, especially at sizes where tax-return qualification gets difficult.
- Self-employed with strong deposits: Twelve or twenty-four months of bank statements may carry the file alone, and assets can supplement.
- Buying a rental: Skip asset depletion as the primary route. DSCR coverage tests the property, and programs below 1.00 coverage are available through select lenders, though leverage and terms adjust.
Working backward helps. Start with the loan you want: assets-only needs liquidity roughly equal to the loan plus costs. The asset-allowance route needs far less, but the income it produces is smaller and the DTI limits bite.
One tax note: tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
- Divisor: The number of months used to spread eligible assets into a monthly income figure.
- Haircut: The percentage by which an asset’s value is reduced before it counts.
- Asset allowance: A path that converts liquid assets into income at 36, 60 or 84 months.
- Assets-only: A path with no DTI, where liquidity must equal the loan plus costs.
- DTI: Your monthly debts divided by your qualifying monthly income.
- Non-QM: A mortgage outside standard qualified-mortgage boxes, underwritten to its own guidelines.
Frequently Asked Questions
Do I have to sell my investments to use this method?
No. The calculation is on paper only. Your portfolio stays where it is, and the lender simply counts eligible balances toward qualifying income. Just remember those same dollars cannot also be used for the down payment or reserves.
Do retirement accounts count?
Yes, partly. Through select wholesale programs, retirement accounts count at 70%, or 80% for borrowers at 59.5 or older. Business funds, gifts, unvested stock and cryptocurrency never count.
Is it the same as a bank-statement loan?
No. A bank-statement loan is reviewed on twelve or twenty-four months of deposits after an expense ratio. Asset depletion is reviewed on balances. Many borrowers combine the two, subject to lender guidelines.
Can I use it on an investment property?
Typically not. The asset paths apply to primary and second homes. Rental purchases generally run on bank statements, a profit-and-loss method, or DSCR coverage instead.
How much do I need in assets?
It depends on the path. Assets-only needs liquidity equal to the loan plus closing costs plus any sixty-month net loss on other residential property. The asset allowance needs less, but it produces a smaller income figure, and above $4,000,000 everything is reviewed case by case.
If you are financing a high-balance property on your assets rather than income documents and want to see how the numbers work, Lendmire can help you compare super jumbo asset-qualification options based on your liquid assets, the property, credit profile, leverage, and your goals. Consumer lending is licensed in 16 states, and nothing here is a commitment to lend.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s traditional personal-income documentation, is central to lender review on DSCR files, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. eCFR Supplement I to Part 1026
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a Bank Statement Loan for 1099 Earners · How to Qualify for a Bank Statement Loan for Surgeons · How a 24 Month Bank Statement Jumbo Loan Works
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.