Asset depletion loans · Asset-based mortgage
Significant assets, modest income? Let your balances qualify you.
An asset depletion loan converts your liquid assets into monthly qualifying income, so retirees, business sellers and investors can qualify without a paycheck. The lender divides your eligible balances over a set number of months. We typically close Non-QM loans in about 12 days.
The calculation
How does an asset depletion loan calculate income?
The lender adds up eligible assets, applies a percentage to each type, and divides the total by a set number of months. Non-QM programs commonly divide by 60 or 84 months; Fannie Mae divides by the loan term, such as 360 months.
| Worked example | Counted |
|---|---|
| Checking and savings: $400,000 at 100% | $400,000 |
| Brokerage account: $1,000,000 at 70% | $700,000 |
| IRA: $800,000 at 70% | $560,000 |
| Eligible assets | $1,660,000 |
| Divided by 84 months | $19,762 / mo qualifying income |
| Divided by 60 months | $27,667 / mo qualifying income |
Illustration only. Percentages vary by lender: stocks and bonds are counted at 70–100%, and retirement accounts at 50–80%.
Because a non-QM program divides by 60 or 84 months instead of 360, the same balances produce four to six times the qualifying income an agency loan would allow.
Typical requirements
Which assets count, and what else is required?
- Cash, savings and money market: usually counted at 100%.
- Stocks, bonds and mutual funds: commonly 70–100%.
- Retirement accounts: commonly 50–80%, depending on the account type and your age.
- Seasoning: assets usually need to be in your accounts for 30 days to 6 months.
- Combining income: many programs let you add Social Security, a pension or other income. Some do not.
- Credit and down payment: credit commonly 620–700+, with loan-to-value up to about 70–85%.
Who uses it
Who asset depletion loans are for
- Retirees who live on investments and have little W-2 or pension income.
- Business owners who recently sold their company.
- Investors whose returns are mostly unrealized gains.
- Buyers between jobs or taking a sabbatical with strong balances.
- High-net-worth buyers who prefer not to show business tax returns.
- Borrowers combining modest income with assets to reach the payment.
Common questions
Asset depletion loan FAQ
What is an asset depletion loan?
An asset depletion loan is a mortgage that calculates qualifying income from your liquid assets by dividing eligible balances over a set number of months, commonly 60 or 84 on Non-QM programs.
Do I have to spend my assets to qualify?
No. The calculation only demonstrates ability to repay. Your money stays in your accounts.
Can I use my 401(k) or IRA?
Yes. Retirement accounts are usually counted at 50% to 80% of their balance, depending on the lender, the account type and your age.
How much in assets do I need?
It depends on the payment. As a rule of thumb, dividing eligible assets by 84 should cover the new payment plus your other debts within the program’s debt-to-income limit. Some programs also set a minimum balance, such as $500,000 or more.
Does Fannie Mae allow asset depletion?
Fannie Mae allows a version that divides assets by the loan term, such as 360 months, with tighter limits. Non-QM programs divide by far fewer months, producing much more qualifying income.
Can I combine asset depletion with Social Security or a pension?
Often, yes. Many programs let you add other documented income; a few asset-only programs do not.
Find out what you qualify for
Get your options, usually the same day
Tell Justin how you earn your income or what the property rents for, and you’ll get the programs you qualify for, the documents each one needs, and a realistic price range. No credit pull to start.
Franklin Direct is a mortgage lender in Ladera Ranch, California, powered by Franklin Loan Center. Our team specializes in Non-QM, self-employed and investor loans, and we typically close Non-QM loans in about 12 days.
Three ways to start
Apply now, or email or text Justin directly — usually answered the same day.