Some buyers have substantial assets but little traditional income — retirees, investors, or people living off a portfolio. Asset depletion loans were built for them, letting wealth itself qualify you. I help high-net-worth clients explore this niche but powerful option.
Qualifying on assets, not income
Traditional loans verify income to ensure repayment. Asset depletion loans take a different path: the lender looks at your liquid assets and calculates a hypothetical monthly income by dividing eligible assets over a defined period. This lets buyers with strong balance sheets but modest reported income qualify.
Who they suit
- Retirees living off investments rather than a paycheck.
- Buyers with large savings or portfolios but low taxable income.
- Investors and entrepreneurs between income events.
- High-net-worth buyers who prefer not to document complex income.
How the calculation works
Lenders typically count a portion of your eligible liquid assets — such as savings, brokerage, and sometimes retirement accounts — and spread it over a set number of months to produce a qualifying income figure. The exact formula, eligible asset types, and haircuts vary by lender, so the details matter.
What lenders require
Expect strong credit, substantial and well-documented assets, and clear sourcing of those funds. Because these are specialized loans, often used for jumbo and super jumbo amounts in our market, the lender relationship and documentation are key.
Trade-offs
Asset depletion loans offer flexibility for the right buyer but can carry larger down payments and somewhat different pricing than standard loans. They are not for everyone — a buyer with documentable income may do better with a conventional or standard jumbo loan. I help clients compare.
Exploring this path
- Inventory your eligible liquid assets.
- Find a lender that offers asset depletion programs.
- Confirm the qualifying calculation and asset types.
- Compare against conventional or jumbo options.
Frequently Asked Questions
What is an asset depletion loan?
It is a loan that qualifies you using your liquid assets rather than employment income. The lender converts a portion of your eligible assets into a hypothetical monthly income over a set period to determine qualifying income. It suits asset-rich, income-light buyers and typically requires strong credit and substantial documented assets. Confirm terms with a lender.
Who uses asset depletion loans?
They suit retirees living off investments, buyers with large savings or portfolios but low taxable income, investors between income events, and high-net-worth buyers who prefer not to document complex income. If your wealth is in assets rather than a paycheck, this approach may let you qualify. A lender can assess your fit.
How do lenders calculate income from assets?
Lenders typically count a portion of your eligible liquid assets — such as savings, brokerage, and sometimes retirement accounts — and spread it over a set number of months to produce a qualifying income figure. The exact formula, eligible assets, and reductions vary by lender, so confirm the specifics with your lender.
Do asset depletion loans require a down payment?
Yes, and often a substantial one, since these are specialized loans frequently used for jumbo and super jumbo amounts. Requirements vary by lender and loan size. Strong credit and well-documented, clearly sourced assets are also expected. Confirm the current down payment requirement for your situation with a lender.
Are asset depletion loans more expensive?
They can carry larger down payments and somewhat different pricing than standard loans, because they are specialized. For the right asset-rich, income-light buyer, the flexibility is worth it. A buyer with documentable income may do better with a conventional or standard jumbo loan. Compare options with a lender.
Can retirement accounts count toward qualifying?
Sometimes. Some lenders include retirement accounts among eligible assets, often with adjustments for access and taxes, while others focus on more liquid savings and brokerage funds. Treatment varies by lender and program. Confirm which of your accounts count and how they are valued with a lender that offers asset depletion loans.
