Asset Depletion Loans FAQ

No SSN required. Takes about 2 minutes.

What is an asset depletion loan?

An asset depletion loan (also called asset utilization or asset qualification) is a mortgage that qualifies you based on your liquid assets instead of your monthly income. The lender takes your eligible assets, applies a haircut percentage by asset type, then either converts the net balance into a monthly qualifying income or confirms the assets can cover the loan plus 5 years of obligations.

Who is an asset depletion loan for?

Retirees with substantial savings but limited or no traditional monthly income. High-net-worth borrowers whose wealth is in investment accounts rather than a paycheck. Borrowers between jobs with enough assets to cover years of obligations. Anyone whose assets tell a stronger qualifying story than their income statement does.

Why use an asset depletion loan instead of a regular mortgage?

A regular mortgage requires monthly income that fits within standard debt-to-income ratios. If you’re retired with $2 million in savings but only $3,000/month in Social Security, a regular mortgage may not qualify you for the home you can comfortably afford. An asset depletion loan recognizes your savings as a qualifying resource and lets you borrow accordingly.

Will I actually have to spend my assets to make payments?

No. The 7-year (84-month) divisor on Option 1 is a calculation method, not a payment plan. You don’t have to actually withdraw assets to pay the mortgage. Most borrowers pay the mortgage from Social Security, pension income, dividends, or a separate income stream. The asset calculation just proves to the lender that the resources exist to support the loan if needed.

Is an asset depletion loan a “real” mortgage?

Yes. An asset depletion loan is a fully legal, fully registered mortgage. The technical term is “non-QM” — non-qualified mortgage — which means it doesn’t follow Fannie Mae or Freddie Mac rules. The home is yours. The mortgage is yours. The deed is yours. The closing process is identical to any other mortgage.

Do I need a job to qualify?

Not on Option 2 (Total Asset Calculation). The matrix is explicit that employment and income are not required to be disclosed on the loan application. On Option 1 (Debt Ratio Calculation), the assets convert to a monthly qualifying income — no employment required there either, though any monthly income you do have (Social Security, pension, investment income) can be added to the calculation.

Can a retiree qualify for an asset depletion loan?

Yes — this is one of the primary audiences. Retired borrowers with substantial savings (401(k), IRA, brokerage, savings) qualify entirely on those assets. The 70% haircut on retirement assets accounts for taxes and early-withdrawal considerations. Social Security, pension, or required minimum distributions can be added to qualifying income separately.

Can I qualify if I’m not a US citizen?

Yes. US citizens, permanent resident aliens (green card holders), and non-permanent resident aliens (visa holders) all qualify under the program. ITIN borrowers and foreign nationals qualify under the flexible version. The asset documentation requirements apply equally to all borrower types.

Can I have a co-borrower on an asset depletion loan?

Yes. Co-borrowers (spouses, partners, non-occupant co-borrowers like an adult child helping a parent buy) can be on the loan. The total qualifying assets across borrowers get combined. Each co-borrower’s assets must meet the same seasoning and documentation requirements.

Can a first-time homebuyer use an asset depletion loan?

Yes. The matrix does not exclude first-time homebuyers from asset depletion (unlike the P&L without bank statements path, which does exclude them). First-time buyers with substantial assets but limited rental or employment history can qualify on assets directly.

How is my qualifying income calculated on Option 1?

Monthly Qualifying Income = Net Qualified Assets ÷ 84 months. “Net” means after subtracting down payment, closing costs, and required reserves. “Qualified Assets” means your liquid assets with the matrix-stated haircut applied: 100% for checking/savings, 80% for stocks and bonds, 70% for retirement accounts. 84 months is 7 years.

Can you walk me through the Option 1 math?

Sure. Say a retiree has $200,000 in checking/savings (counts at 100% = $200,000), $500,000 in stocks (counts at 80% = $400,000), and $1,000,000 in IRA (counts at 70% = $700,000). Total qualified assets: $1,300,000. They’re buying a $500,000 home with 20% down ($100,000) plus $15,000 closing costs and need $25,000 in reserves. Net qualified assets = $1,300,000 − $140,000 = $1,160,000. Monthly qualifying income = $1,160,000 ÷ 84 = $13,809/month.

How does Option 2 work?

No income calculation, no DTI. Your allowable assets must be sufficient to cover the new loan amount, down payment, closing costs, required reserves, AND 5 years of your current monthly debt obligations. If you have enough assets to cover all of that, you qualify. Employment and income are not required to be disclosed on the loan application.

Can I add monthly income to the asset calculation?

Yes on Option 1. The asset-based monthly income gets added to any documented monthly income you do receive — Social Security, pension, required minimum distributions, investment income, rental income, or part-time employment. The combined total is your qualifying income for DTI calculations.

Why is the divisor 84 months instead of 360 (the loan term)?

84 months (7 years) is the matrix-stated divisor — it’s a conservative measure that gives you a meaningful monthly income figure without assuming the full 30-year loan term. A 360-month divisor would result in a very small monthly qualifying income for the same asset pool. 84 months balances giving you adequate qualifying power against the lender’s risk management.

Which option will I qualify under?

We calculate both at intake and choose whichever puts you in the best position. Option 1 is more common for borrowers with moderate assets relative to the loan size. Option 2 is more common for high-net-worth borrowers whose asset pool dwarfs the loan they want. Some borrowers can only qualify under one path; some qualify under both.

What’s the minimum asset balance on Option 1?

Per the matrix: the lesser of (a) 1.5 times the loan balance OR (b) $500,000 in qualified assets. Both must be net of down payment, closing costs, and required reserves. So for a $300,000 loan you need at least $450,000 in net qualified assets. For a $400,000 loan, $500,000 is the cap (whichever is less — 1.5x = $600K, $500K floor — so $500K). For a $1M loan, $1.5M is required (because $1.5M is less than $500K minimum? no, larger — so 1.5x = $1.5M is required since it’s the lesser of $1.5M and the $500K floor would only apply if 1.5x came in below $500K). The rule essentially says you can’t qualify with less than $500K in net assets, period.

What’s the minimum asset balance on Option 2?

Your allowable assets must cover the full loan amount + down payment + closing costs + required reserves + 5 years of current monthly debt obligations. There’s no fixed minimum dollar amount — it depends entirely on the loan size and your debts. For a borrower with no other debts buying a $500,000 home with 20% down, the threshold might be around $625,000 in allowable assets. For a borrower with $5,000/month in other debts, add another $300,000 ($5K × 60 months).

When is Option 1 the better choice?

When your assets are substantial relative to the loan but not so vast that Option 2 is comfortable. When you also have other monthly income (Social Security, pension) that should be combined with the asset-based income. When you want to show a DTI on paper for the underwriter’s traditional review. Option 1 is the default path for most retiree borrowers.

When is Option 2 the better choice?

When you’re high-net-worth with assets that dwarf the loan you want. When you have no traditional income to document and prefer not to undergo a DTI calculation. When privacy or simplicity matters and you’d rather not disclose employment or income at all on the application. Option 2 is the path for borrowers whose wealth is the qualifying story all by itself.

Can I switch between Options 1 and 2 during the loan process?

Sometimes, yes. If the file shifts during processing (loan amount goes up, assets needed for qualifying change), we may need to recompute under both options to confirm you still qualify. Switching paths mid-process may require pricing and locking to be redone. We try to pick the right path up front to avoid that.

No SSN required. Takes about 2 minutes.

What’s the haircut on checking, savings, and money market accounts?

No haircut. 100% of checking, savings, and money market accounts count toward qualified assets. These are the most liquid asset types and get the most favorable treatment.

What’s the haircut on stocks and bonds?

80% of the value counts. The 20% haircut accounts for market risk (the value could drop) and the cost of liquidating positions. So $500,000 in stocks counts as $400,000 in qualified assets.

What’s the haircut on retirement accounts?

70% of the value counts. The 30% haircut accounts for taxes you’d owe on withdrawal and any early-withdrawal penalties. So $1,000,000 in an IRA or 401(k) counts as $700,000 in qualified assets. This applies whether you’re already in retirement or not — the haircut is the same.

Are trust assets eligible?

Yes — 100% of assets in a trust when you are the sole beneficiary. Per the matrix, you must be the creator/trustee/beneficiary of the trust to use those funds. Trusts where you are one of multiple beneficiaries typically don’t qualify under this rule.

Can I use business account assets?

No. Business accounts are explicitly prohibited per the matrix. Only personally held assets count. If you have wealth held in a business account, it would need to be transferred to a personal account and seasoned for 6 months before becoming eligible.

What about cryptocurrency or non-traditional assets?

The matrix doesn’t list cryptocurrency, NFTs, gold/silver bullion, art, or other non-traditional assets among the four eligible asset types (checking/savings/money market, stocks/bonds, retirement, trust assets). Items outside the matrix-stated list are generally case-by-case decisions and may need to be converted to cash and seasoned before becoming eligible.

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

660 minimum on most LTV/loan amount combinations. The credit score requirement scales with the loan amount and LTV. At higher LTVs (89.99% on a $1.5M loan) you need 740+. At larger loan amounts ($2.5M+) you typically need 720+. At smaller loans and lower LTVs, 660 is the floor.

Can I get an asset depletion loan with credit below 660?

Asset depletion is treated as a “Full Doc” path within the broader Income Qualifying program. The 660 floor applies on the clean-credit tier. The 620 minimum that exists on the credit-recovery tier of the program may apply with stricter DTI (43%) and lower LTV — verify at intake whether your specific credit profile and asset situation fit that path.

Does a higher credit score get me better terms?

Yes. Higher credit scores unlock higher LTV (lower down payment), larger loan amounts, and better rates. At 740+ credit you can hit the 89.99% LTV ceiling on $1.5M primary residence loans. At 660 credit the typical LTV cap is 80%.

If I have a co-borrower, which credit score is used?

The standard rule for the program is the highest representative credit score across borrowers. For asset depletion loans where both borrowers’ assets are being used to qualify, the file scores on the highest representative score. We’ll confirm your specific scenario at intake.

How much down payment do I need?

As little as 10% down (89.99% LTV) on a primary residence at 740+ credit and loan amounts up to $1.5M. At 660 credit the typical maximum is 80% LTV (20% down). Higher loan amounts and second homes/investment properties require larger down payments.

What’s the maximum LTV at each credit tier?

At 740+ credit on $1.5M primary: up to 89.99% LTV. At 680+ credit on $1.5M: up to 85% LTV. At 660+ credit on $1.5M-$2M: up to 80% LTV. At 700+ credit on $2M: up to 80% LTV. At 720+ credit on $2.5M: up to 80% LTV (9 months reserves required). At 720+ credit on $3M: up to 75% LTV (12 months reserves). At 700+ credit on $3.5M: up to 70% LTV (12 months reserves).

Do I need cash reserves separate from the qualifying assets?

Yes. Required reserves range from 3 to 12 months of full monthly mortgage payments depending on loan size and credit tier. These reserves must be excluded from your “qualified assets” calculation — they’re set aside, not used for income qualifying. Cash, brokerage accounts, mutual funds, and retirement accounts (at a percentage) can all count toward reserves.

Can I use gift funds for my down payment?

Yes, after documenting the minimum required borrower contribution of 5%. Gift funds can be used for down payment and closing costs. Asset depletion borrowers often already have substantial assets and rarely need gift funds, but they’re permitted under standard program rules.

Can the seller pay my closing costs?

Yes, within standard interested-party contribution limits. The exact amount depends on LTV and occupancy. We’ll structure the contract to maximize your benefit.

What’s the maximum asset depletion loan amount?

Up to $3,500,000. The largest loan amounts ($3M-$3.5M) require higher credit (700-720+), lower LTVs (70-75%), and 12+ months of reserves. Asset depletion loans use the same LTV/credit/loan-amount grid as the broader full-doc Income Qualifying program.

What’s the minimum loan amount?

$100,000 minimum for manually underwritten files. $125,000 minimum for computer-approved primary residence files. $150,000 minimum for second home and investment property files.

Are jumbo asset depletion loans available?

Yes. Asset depletion loans run up to $3.5M under the standard rules — well into jumbo territory. High-net-worth borrowers often use asset depletion specifically for jumbo loan amounts where their tax returns don’t support the income level needed for a conventional jumbo loan.

Can I do a cash-out refinance with an asset depletion loan?

No. The matrix is explicit: Asset Utilization may not be used on cash-out transactions. Asset depletion is for purchases and rate-and-term refinances only. For a cash-out, you’d need to qualify using a different income type — bank statements, 1099, P&L, or full-doc tax returns.

Why no cash-out option?

The lender’s risk control. Cash-out refinances pull equity out of the home, which is a riskier transaction than a purchase or rate-and-term. Combining that with asset-based qualifying (rather than income-based) is outside the program’s risk tolerance. If you need cash-out, we’ll find an income documentation path that works.

What is the maximum DTI on Option 1?

50% standard maximum. The flexible version of the program can go up to 55% by exception. DTI applies on Option 1 because the assets convert to a qualifying income figure that gets compared to monthly debts.

Is there a DTI on Option 2?

No. The matrix is explicit: “There is no debt ratio calculation for the Total Asset Calculation option.” Your monthly debts still get counted in the 5-year obligation cushion (allowable assets must cover 5 years of current monthly obligations), but they’re not compared to income — because no income is being qualified.

How do I lower my DTI on Option 1?

Two paths. (1) Lower your debt: pay off credit cards or installment debt before closing. (2) Raise your qualifying income: contribute more documented monthly income to the calculation, or make sure all eligible assets are seasoned and documented to maximize the asset-based income.

Will my mortgage debt on other homes hurt my qualifying?

It counts in the monthly obligations total (Option 1 DTI; Option 2 5-year obligation cushion). If you own other properties, those mortgage payments factor in. If those properties produce rental income, the income can offset the debt.

Can I get an asset depletion loan after bankruptcy?

Yes. The standard clean-credit path requires 48 months from bankruptcy discharge. The credit-recovery path allows 12 months from discharge with stricter DTI rules. Asset depletion is treated as a Full Doc path, so both seasoning options apply.

Can I get an asset depletion loan after foreclosure?

Yes. Housing events (foreclosure, short sale, deed-in-lieu) must be seasoned 48 months on the clean-credit path or 24 months on the credit-recovery path. The recent-event credit-recovery path requires the event to be settled prior to closing.

What about collections, judgments, or tax liens?

Reviewed case by case based on size, age, and type. Larger open collections, judgments, or tax liens typically need to be paid off or on a documented payment plan before closing. Smaller or older items may be addressed with a letter of explanation. We review your specific credit report at intake.

Can I get an asset depletion loan with late mortgage payments?

Possibly. The standard program allows one 30-day late mortgage payment in the last 12 months. The flexible program allows broader credit events depending on seasoning category. Multiple recent lates are harder but not always impossible.

No SSN required. Takes about 2 minutes.

Can I use an asset depletion loan for a primary residence?

Yes. Primary residences get the most favorable LTV ceilings (up to 89.99%) and rates. Most asset depletion loans are for primary residences — typically retirees buying a downsizing home or relocating in retirement.

Can I use an asset depletion loan for a second home?

Yes. Vacation homes and second residences qualify with the standard second-home LTV reductions. Retirees buying a winter home or seasonal residence often use asset depletion.

Can I use an asset depletion loan for an investment property?

Yes, with the standard investment property LTV reductions. If the property has strong rental income, a DSCR loan may be a better fit — DSCR qualifies on the property’s rental income rather than your personal asset pool. We’ll compare both options at intake.

What property types are eligible?

Single-family residences, planned-unit developments, townhomes, 2-4 unit small multifamily, warrantable and non-warrantable condos, site condos, log homes, and modular homes. Condotels qualify under the flexible version of the program.

Can I buy a non-warrantable condo with an asset depletion loan?

Yes. Non-warrantable condos that conventional lenders won’t finance are eligible under the broader Income Qualifying program, including the asset depletion path. Retirees who find a condo they want in a building with concentrated ownership, commercial space, or other warrantability issues can often still finance it.

What loan terms are available?

15-year fixed (standard), 30-year fixed (standard or interest-only), 40-year fixed (standard or interest-only), 5/6 ARM (fixed 5 years then adjusts every 6 months), and 7/6 ARM. ARMs come in standard or interest-only variants on a 30 or 40-year amortization base.

Can I get an interest-only asset depletion loan?

Yes. Interest-only is available on 30-year fixed, 40-year fixed, and both ARM options. The interest-only period lasts up to 10 years. Interest-only lowers your monthly payment — useful for retirees managing fixed-income cash flow.

Is there a prepayment penalty on an asset depletion loan?

No on primary residence loans (no prepayment penalty under this program). Yes on investment property loans, where a prepayment penalty is required — can be bought out at origination by accepting a slightly higher rate.

Can I get a temporary buydown?

Yes, on the flexible version of the program. A temporary buydown lowers your rate for the first 1, 2, or 3 years of the loan. Useful when the seller is willing to contribute toward closing costs — the contribution can fund the buydown.

Is a 40-year mortgage a good idea for a retiree?

Often yes. The 40-year amortization lowers the monthly payment, which helps fixed-income retirees stay within comfortable cash-flow limits. The trade is more total interest over the life of the loan. If you can pay extra principal in stronger investment years, you shorten the effective term.

Can a retiree with no income qualify for an asset depletion loan?

Yes. Retirees with substantial savings but no monthly income qualify directly on the asset pool. Option 2 (Total Asset Calculation) is especially designed for this — no income disclosure required at all. Option 1 converts the assets to a qualifying monthly income that, combined with any Social Security or pension income, supports the loan.

Can a high-net-worth borrower qualify based on assets alone?

Yes — this is the core use case for Option 2. If your asset pool dwarfs the loan you want, the Total Asset Calculation lets you qualify without disclosing income at all. High-net-worth borrowers with complex tax structures (significant write-offs, business income reported through entities, deferred compensation) often prefer this path over income documentation.

Can someone between jobs qualify on assets?

Yes, if the assets are sufficient. A borrower between jobs but with substantial savings can qualify on assets while their employment situation resolves. The 6-month seasoning rule means those assets need to have been in place — you can’t just transfer money in to qualify.

Can a borrower with inherited assets qualify?

Yes, once the inherited assets are seasoned for 6 months in the borrower’s personal account. Inherited assets that just landed in your account last week typically don’t yet meet the seasoning requirement.

Can a non-working spouse use the working spouse’s assets?

Yes, as long as both spouses are on the loan as borrowers. The combined personally-held assets of both borrowers count. Asset depletion is generally most flexible when both spouses’ financial pictures are combined on the application.

Can I refinance my current mortgage with an asset depletion loan?

Yes, with a rate-and-term refinance (improving your rate or term without taking cash out). Cash-out refinances are not allowed on asset depletion. Many retirees use asset depletion to refinance away from a higher-rate loan or to move from an ARM to a fixed-rate loan in retirement.

How do I get cash out of my home if asset depletion doesn’t allow it?

You’d qualify using a different income type for the cash-out — bank statements, 1099, P&L, full-doc tax returns. Alternatively, a HELOC (home equity line of credit) on your existing mortgage can pull equity without doing a full refinance. We can quote both paths if cash-out is the goal.

Can I refinance from asset depletion into a conventional loan later?

Yes, if your income picture changes (you return to work, RMDs start, pension or Social Security begins). Refinancing from a non-QM loan into a conventional loan at a lower rate is a common path for retirees whose income story strengthens after closing.

Step 1: Start the intake.

Fill out the short intake form. No SSN. No hard credit pull. About 2 minutes. We use this to figure out which path (Option 1 or Option 2) fits your situation.

Step 2: Pre-qualification call.

We talk through your assets — what types, where they’re held, how long they’ve been seasoned. We run the math under both Option 1 and Option 2 and recommend the better path. You leave knowing your loan capacity, monthly payment, and what’s needed for formal pre-approval.

Step 3: Gather asset documentation.

Most recent 2 months of statements for every qualifying account (checking, savings, money market, brokerage, IRA, 401(k), trust). Statements showing 6-month seasoning. Asset documentation cannot be more than 30 days old at the time of closing — we usually pull fresh statements right before closing to keep documentation current.

Step 4: Formal pre-approval.

You submit asset statements, ID, and any other supporting documents. We pull credit. The lender reviews and issues a pre-approval letter showing your maximum loan amount and which option (1 or 2) you’re qualifying under.

Step 5: Underwriting and asset calculation worksheet.

A human underwriter reviews the file. The matrix requires an Asset Calculation Worksheet for both options — it confirms eligible assets, applied haircuts, and net qualifying amount. Loans above $2 million require a second full appraisal.

Step 6: Closing.

You receive the Closing Disclosure at least 3 business days before closing. Review final terms. At closing, you sign at the title company or attorney’s office, funds wire, the deed records, you get the keys.

What if I have trouble making payments?

Call the servicer immediately — don’t wait. Most servicers have hardship programs: temporary forbearance, repayment plans, loan modifications. A HUD-approved housing counselor can help you navigate the options.

No SSN required. Takes about 2 minutes.

About this guide: Written by J.D. Peck, NMLS #314883, Area Manager and Mortgage Loan Originator at Paramount Residential Mortgage Group (PRMG), NMLS #75243. 25+ years of mortgage lending experience, 3,100+ loans closed, Scotsman Guide Top Originator 2026. Specialties: VA loans, manual underwriting, Non-QM products including asset depletion loans, and complex qualifying scenarios for retirees and high-net-worth borrowers. Every answer above is built from the current non-QM income qualifying guidelines (effective 5-28-2026 and 06/04/2026). Guidelines, fees, and limits are subject to change. Lending in 49 states. New York excluded. Last updated June 6, 2026.