Asset Depletion Loans Guide 2026: Qualify Using Your Assets Instead of Income

What is an asset depletion loan and who qualifies?

Asset depletion (also called asset dissipation or asset-based) loans calculate qualifying income by dividing your eligible assets by a set number of months. This creates a "monthly income" figure used for mortgage qualification, even if you have little or no traditional income.

Ideal candidates for asset depletion loans include:

• Retirees with substantial 401(k), IRA, or investment portfolios
• Early retirees living off investments before taking Social Security
• High-net-worth individuals with significant liquid assets
• Business owners who minimize taxable income
• Trust beneficiaries with asset distributions
• Investors with portfolio income not easily documented

How does asset depletion income calculation work?

The basic formula

Lenders calculate asset depletion income using this general approach:

1. Total eligible assets (varies by lender and asset type)
2. Minus down payment and closing costs
3. Divided by loan term months (typically 360 months for 30-year)
4. Equals monthly qualifying income

Example calculation

Consider a borrower with $2 million in eligible assets purchasing a home:

• Total eligible assets: $2,000,000
• Less down payment/closing costs: $400,000
• Remaining assets: $1,600,000
• Divided by 360 months: $4,444/month qualifying income

This calculated income is then used to determine debt-to-income ratio and loan amount eligibility, just like traditional employment income.

What assets qualify for asset depletion?

Fully eligible assets (typically 100% counted)

• Checking and savings accounts
• Money market accounts
• Certificates of deposit (CDs)
• Non-retirement brokerage accounts (stocks, bonds, mutual funds)

Partially eligible assets (typically 50-70% counted)

• 401(k) accounts (discounted for taxes/penalties if under 59½)
• Traditional IRA accounts
• Other tax-deferred retirement accounts

Fully eligible retirement assets (typically 100% if age 59½+)

• Roth IRA (contributions already taxed)
• Retirement accounts when borrower is 59½ or older
• Pension distributions being received

Assets typically not eligible

• Non-liquid assets (real estate equity, business ownership)
• Restricted stock or unvested options
• Annuities with surrender penalties
• Life insurance cash value (varies by lender)
• Cryptocurrency (limited lender acceptance)

Why use a wholesale broker for asset depletion loans?

Access to Non-QM lenders

Asset depletion loans are typically Non-QM (Non-Qualified Mortgage) products not available at most retail banks. Wholesale brokers maintain relationships with specialized lenders who offer these programs.

Varied calculation methods

Different lenders use different formulas and asset eligibility rules:

• Some divide by 360 months, others by 240 or 120
• Retirement account discounts vary from 30% to 50%
• Minimum asset requirements differ significantly
• A broker finds the calculation most favorable to your situation

Competitive pricing

Wholesale broker access to multiple Non-QM lenders creates pricing competition. While asset depletion loans carry premium pricing compared to conventional loans, broker competition minimizes this premium.

Asset depletion loan requirements

Credit score requirements

• Minimum: Typically 680-700 for most programs
• Optimal pricing: 720+ credit scores
• Some programs: Accept 660+ with compensating factors

Down payment requirements

• Typical minimum: 20-25% down payment
• Lower LTV options: Better pricing with 30%+ down
• Maximum LTV: Usually 80% (some programs 85%)

Reserve requirements

• Assets used for income calculation serve as reserves
• Lenders want to see sustainable asset base post-closing
• Minimum reserves typically 12-24 months PITI

Documentation requirements

• 60-90 days of account statements for all claimed assets
• Verification of account ownership
• Documentation of any large deposits
• Retirement account statements showing current balance

Asset depletion loan types

Conventional asset depletion (Fannie Mae/Freddie Mac)

Agency guidelines allow limited asset depletion for qualifying:

• More restrictive calculation methods
• Lower loan limits than Non-QM options
• Better pricing than Non-QM alternatives
• Works well combined with other income sources

Non-QM asset depletion

Specialized programs for asset-based qualification:

• More flexible calculation methods
• Higher loan amounts available
• Asset-only qualification possible
• Jumbo loan amounts accessible

Combining asset depletion with other income

Asset depletion income can be combined with other sources:

• Social Security benefits
• Pension income
• Part-time employment
• Rental income
• Dividend and interest income

This combination approach often provides better qualification than asset depletion alone and may access better-priced conventional programs.

Frequently Asked Questions

Do I actually have to spend down my assets to qualify?

No. Asset depletion is a qualification method, not a requirement to actually deplete your assets. The lender calculates what your income would be if you converted assets to monthly income over the loan term. You can manage your assets however you choose after closing.

Can I use asset depletion if I'm still working?

Yes. Asset depletion can supplement traditional income, potentially increasing your borrowing capacity. This approach works well for borrowers whose tax returns don't reflect their true financial strength due to business deductions or variable income.

What credit score do I need for an asset depletion loan?

Most asset depletion programs require minimum credit scores of 680-700, with optimal pricing at 720+. Some programs accept lower scores with compensating factors like larger down payments or substantial reserves. Contact us for guidance based on your situation.

Are asset depletion loan rates higher than conventional loans?

Non-QM asset depletion loans typically carry premium pricing compared to conventional loans. The premium varies by lender, credit score, down payment, and loan amount. Wholesale broker access helps minimize this premium through lender competition.

Can I use retirement accounts if I'm under 59½?

Yes, but lenders typically discount retirement account values by 30-50% for borrowers under 59½ to account for potential taxes and early withdrawal penalties. Once you reach 59½, most lenders count retirement assets at full value.

What's the minimum asset amount needed?

Minimum asset requirements vary by lender and loan amount. Generally, you need sufficient assets to generate qualifying income for the desired loan payment plus reserves. For larger loans, asset requirements increase proportionally.

Can I buy a second home or investment property with asset depletion?

Yes. Asset depletion programs are available for primary residences, second homes, and investment properties. Second homes and investments typically require larger down payments (25-30%) and may have different asset calculation methods.

Ready to explore asset depletion financing?

If you have substantial assets but limited documented income, asset depletion loans offer a path to homeownership that traditional lending cannot provide. As a wholesale mortgage broker with access to specialized Non-QM lenders, I can evaluate your asset portfolio and identify the optimal program for your situation.

Contact us today for a free consultation. We'll review your assets, calculate potential qualifying income, and present options from multiple lenders competing for your business. Your wealth shouldn't prevent you from obtaining mortgage financing—let's find the right solution together.