An asset depletion loan, also called asset utilization or an asset qualifier loan, treats your savings and investments as income. The lender divides your eligible assets by a set number of months, and the result is your qualifying monthly income. No employment or tax returns required.
Who Uses Asset Depletion
- Retirees with savings but modest pension or Social Security income
- Business owners who recently sold their company
- Investors who live off portfolio returns
- Anyone between jobs or ventures with strong balances
How the Calculation Works
- Add up eligible assets
- Apply discounts: cash at 100%, stocks and bonds often at 100% (some lenders use 80%), and retirement accounts often at 60–80%
- Subtract the down payment, closing costs, and required reserves
- Divide by the lender's divisor, most often 60 months
Why the divisor matters: $1,200,000 ÷ 60 = $20,000 a month. The same assets ÷ 84 = about $14,286 a month. A lender using a shorter divisor can qualify you for much more.
Some lenders also offer a version with no debt-to-income ratio at all. Instead, your eligible assets must cover the loan amount plus a set number of months of your debts.
Asset Depletion Loan Requirements
| Guideline | Typical | Strongest files, at some lenders |
|---|---|---|
| Credit score | 640–680 | From about 600–620 |
| Divisor | 60 months | 60 months (84+ at others) |
| Max LTV, purchase | 75–80% | Up to 85% |
| Max LTV, cash-out | 70–75% | Up to 75% |
| Asset seasoning | 2–3 months of statements | Same |
| Loan size | Up to $2–3 million | Up to $3 million or more |
| Property | Primary, second home, investment | Same |
Which Assets Count
| Asset | Typically counted at |
|---|---|
| Checking, savings, money market, CDs | 100% |
| Stocks, bonds, mutual funds | Often 100%; some lenders 70–80% |
| 401(k), IRA, other retirement | Often 60–80%, depending on age and lender |
| Cryptocurrency | Allowed by a few lenders, usually after converting or with a large discount |
What Usually Doesn't Count
- Home equity and other real estate
- The value of a privately held business
- Assets you don't fully own or can't access
- Unvested stock or restricted shares
Combine It With Other Income
Many lenders let you add asset income to Social Security, pensions, rental income, or part-time earnings. That combination often makes the numbers work for retirees.
Asset Depletion FAQ
Do I have to spend down my assets?
No. "Depletion" only describes how income is calculated. You don't withdraw anything.
How much in assets do I need?
It depends on the payment. As a rough guide, divide the assets you'll have left after closing by 60 to see the monthly income a lender may count.
Can I use retirement accounts if I'm under 59½?
Usually yes, often at a lower percentage to account for taxes and penalties.
Can I use asset depletion for an investment property?
Yes. It works for primary homes, second homes, and investment properties at many lenders.
In the financial industry since 2015. Licensed loan officer in Los Angeles, California. NMLS #1493724, with UTM Financial, LLC (NMLS #2591548). More about Ivan
This article is general education, not financial, tax, or legal advice. Loan guidelines vary by lender and change often. Not a commitment to lend.