Not every borrower who can afford a mortgage gets one in a paycheck every two weeks. Retirees, business owners who sold their company, investors living on portfolio income, and high-net-worth individuals who keep most of their wealth in assets often find that conventional lenders can't figure out how to qualify them — even when the money is clearly there.
Asset depletion mortgages were built for exactly this situation. The loan uses what you have, not what you earn month to month, to determine how much you qualify for.
How Asset Depletion Works
The concept is straightforward. Instead of documenting a regular income stream, you document the assets you hold. The lender takes your total eligible assets, subtracts the funds you'll use for the down payment and closing costs, and divides the remainder by the loan term — typically 360 months for a 30-year loan. That calculation produces a monthly qualifying income figure, which is then used the same way a paycheck would be used in a conventional underwrite.
Example: You have $1.8 million in brokerage and savings accounts. After a $300,000 down payment and $15,000 in closing costs, $1,485,000 in eligible assets remain. Divided by 360 months, that calculates to $4,125 per month in qualifying income. Whether you actually withdraw that amount each month is irrelevant — the program recognizes that the assets exist and could support the payment.
What Assets Qualify
Not all assets count equally. Lenders apply discounts and restrictions depending on the asset type:
Checking, savings, and money market accounts: Count at 100 percent of the documented balance. Most liquid and most straightforward to verify.
Brokerage and investment accounts: Count at 70 to 100 percent depending on the lender and account composition. Accounts holding highly volatile assets may be discounted more.
Vested retirement accounts (IRA, 401k, SEP-IRA): Count at 60 to 70 percent of the vested balance to account for potential taxes and withdrawal penalties. If you're over 59½ and there are no penalties, some lenders credit a higher percentage.
Business accounts: May count with documentation of ownership percentage and proof that withdrawal would not impair the business. Requires CPA letter in most cases.
What generally does not count: Primary residence equity, illiquid real estate holdings, unvested stock options, pension income that hasn't yet been distributed, and assets that can't be independently verified with statements.
Who This Is Actually For
Retirees with investment portfolios: You spent decades building the portfolio. It's there. The conventional mortgage system just doesn't know how to count it as income. Asset depletion gives your savings credit for what they're actually worth.
Recent business sellers: You sold the company and the proceeds are sitting in an account. You don't have W-2 income to show. You have $2 million in liquid assets. Asset depletion is the bridge between the sale and your next chapter.
Self-employed borrowers with strong balance sheets: Some business owners pay themselves a modest salary and keep significant retained earnings or invested assets. If the assets exceed what the income alone qualifies for, asset depletion can supplement or replace the income calculation.
Foreign nationals with offshore wealth: Some programs allow foreign bank accounts and foreign investment holdings to count as eligible assets, subject to documentation requirements. This is more lender-specific and worth discussing on a case-by-case basis.
What You Need to Qualify
Asset documentation: Two to three months of statements for all accounts you're using in the calculation. Lenders want to see that the balance is current and stable, not recently deposited from an undisclosed source.
Credit score: Most asset depletion programs require 680 to 720 minimum. This is a non-QM product and lenders want a strong credit profile to offset the non-traditional income documentation.
Down payment: Typically 20 to 30 percent for asset depletion programs. The higher down payment requirement is standard for non-QM products.
Sufficient assets: You need enough eligible assets after the down payment and closing costs to generate a qualifying income that supports your target loan amount. We can run this calculation for you before you start the application.
Asset Depletion vs. Other Non-QM Options
Asset depletion is one of several non-QM qualification paths. Bank statement loans work for self-employed borrowers with active business income. DSCR loans work for investors qualifying on rental income. Asset depletion works for borrowers whose wealth is in savings and investments rather than an active income stream.
In some cases, a combination works — using partial asset depletion income alongside Social Security, rental income, or a modest salary to reach the qualifying threshold. These hybrid approaches require a lender with flexible non-QM underwriting, which is where working with a specialist rather than a big bank matters.
Talk Through Your Situation
Asset depletion qualification is more nuanced than conventional underwriting. The right answer depends on what you hold, where it's held, and how the specific lender's program counts each asset type. A conversation is worth more than a general estimate.
Call or text Brandon at 832-997-1527 or visit brandonhuynh.net. We work with non-QM programs including asset depletion across Houston and Texas and can give you a clear picture of your qualification before you move forward.
Talk Through Your Situation
Asset depletion qualification depends on what you hold, where it's held, and how the lender's program counts each asset type. A conversation is worth more than a general estimate.
Schedule a Call