A good fit if
- You're retired or between businesses
- You have large liquid assets but low reported income
- You recently sold a business or property
Probably not if
- Most of your wealth is in real estate or a private business
- You need the assets for the down payment and reserves too
- You have strong documented income (a standard loan will price better)
How Asset Depletion Works
The lender takes your eligible assets, subtracts the down payment, closing costs, and required reserves, applies any discount for retirement or investment accounts, and divides what's left by a set number of months. The result is your qualifying monthly income.
Example: $900,000 of eligible assets left after the down payment, closing costs, and reserves, divided by 60 months, is $15,000 a month in qualifying income. A lender using 84 months would count about $10,714.
Who Asset Depletion Loans Are For
- Retirees with savings but limited monthly income
- Business owners who recently sold a company
- Investors and high-net-worth borrowers whose income is irregular
- Borrowers between jobs or taking time off, with substantial assets
Which Assets Count
- Cash: checking, savings, and money market, usually at full value
- Investments: stocks, bonds, and mutual funds, often at full value (some lenders use 80%)
- Retirement: 401(k) and IRA accounts, often counted at 60–80% depending on your age and the lender
Real estate equity and business ownership usually don't count. Crypto is excluded at most lenders, though a few accept it with conditions.
Asset Depletion Loan Requirements
- Credit: from about 620–680, depending on the lender.
- Down payment: usually 20–25%; up to 85% LTV at some lenders for strong files.
- Divisor: most often 60 months; some lenders use 84 or more.
- Seasoning: assets usually need to be in your accounts for at least 2–3 months.
- Employment: not required.
- Debt-to-income: usually up to 50%; some versions qualify on assets alone without a DTI test.
The asset depletion guide walks through the calculation in more depth.
How to Qualify
- List every account with its current balance and type.
- Subtract the down payment, closing costs, and reserves.
- Apply the discount for retirement or investment accounts.
- Divide by 60 to estimate monthly income, and add any pension or Social Security.
- Send me the summary, and I'll find the lender whose divisor and haircuts work best for you.
Documents You'll Need
- The most recent 2–3 months of statements for every account you're using
- Retirement account terms showing you can withdraw, if requested
- Award letters for Social Security or pensions, if adding that income
- Photo ID and credit authorization
- Purchase contract or current mortgage statement
Asset Depletion vs. Bank Statement Loans
| Asset depletion | Bank statement | |
|---|---|---|
| Income based on | Account balances | Deposits over 12–24 months |
| Employment needed | No | Self-employment |
| Best for | Large savings, little income | Business owners with strong deposits |
Asset Depletion FAQ
Do I have to spend down my assets?
No. "Depletion" is only how the lender calculates income. You don't withdraw anything.
How much in assets do I need?
It depends on the payment. Roughly, you need enough left after closing that the balance divided by 60 covers your housing payment and debts within the lender's DTI limit.
Can I combine assets with other income?
Often, yes. Social Security, pensions, or part-time income can be added to the asset-based income.
Do retirement accounts count if I'm under 59½?
Often, yes, at a lower percentage to account for taxes and penalties on early withdrawal.
Can I use asset depletion for an investment property?
Yes. It works for primary homes, second homes, and investment properties.
Available for properties in California. Guidelines shown are typical and are not a commitment to lend. Your terms depend on credit, assets, property, and the lender's current guidelines, and can change without notice.