An asset depletion mortgage converts your savings and investments into qualifying income, opening a path to financing for buyers who are wealthy on paper but light on paychecks. Instead of W2s or tax returns, the lender applies a formula to your liquid assets and treats the result as monthly income. For retirees, recent business sellers, and investors living off portfolios, it is often the cleanest route to a home loan.
This guide explains how the asset depletion mortgage formula works, which assets count, what rates and requirements to expect in 2026, and how this program compares with the alternatives. By the end you will know roughly what your own portfolio qualifies you to buy.
What Is an Asset Depletion Mortgage?
An asset depletion mortgage, sometimes called an asset qualifier or asset-based loan, qualifies you on wealth rather than wages. The logic is simple: a borrower with $1.5 million in liquid assets can clearly support a mortgage payment, even if their tax return shows little income. The loan documents that capacity by spreading eligible assets across a set number of months and counting the result as income, no employment or pay history required.
These loans sit in the non-QM category alongside bank statement and DSCR programs, and they are fully regulated: the lender still verifies ability to repay, just through assets instead of employment. You can see how the asset qualifier program fits JVM’s broader lineup on our non-QM loans page.
The program solves a paradox that frustrates wealthy borrowers constantly: conventional underwriting is built around monthly income, so a retiree with $2 million in investments and $3,000 in monthly distributions can be declined for the same loan a young salaried worker with no savings gets approved for easily. An asset depletion mortgage reads the balance sheet instead of the pay stub and prices the risk accordingly.
How the Asset Depletion Mortgage Calculator Works
Every asset depletion mortgage calculator runs the same basic math: eligible assets divided by a set number of months equals monthly qualifying income. The divisor is what separates programs. Non-QM asset depletion programs commonly divide by 120 months, while agency-style versions offered through Fannie Mae and Freddie Mac guidelines divide by 360, producing a much smaller income figure that is harder to qualify with but priced at conforming rates.
Because the divisor changes the outcome so dramatically, run the calculation under every program you fit before deciding. The same asset pool can support three very different loan sizes depending on the formula, and choosing well at this step matters more than anything you could negotiate later in the process.
Which Assets Count (and at What Value)
Lenders apply haircuts based on how liquid and stable each asset class is. Typical treatment looks like this:
- Cash, checking, savings, CDs, and money market funds: counted at or near 100%
- Stocks, bonds, and mutual funds: commonly counted at around 70% to 80% of market value to buffer volatility
- Retirement accounts: often 60% to 70% if you are under retirement age, and a higher percentage once penalty-free withdrawals are available
- Excluded: business operating accounts, restricted stock, and assets you cannot access
Funds must be seasoned and documented, and large recent deposits need a paper trail. The down payment typically comes out of the asset pool before the income calculation runs, so plan the math on your post-closing balance rather than your current statement total.
A Worked Example
Take a retired couple with $1.5 million in eligible assets after their down payment. Under a non-QM program dividing by 120, their qualifying income is $12,500 per month. Under an agency-style program dividing by 360, the same assets produce $4,167 per month. The first figure supports a substantially larger loan, which is why asset-rich borrowers usually start with the non-QM version and treat the agency version as a rate play when their numbers stretch far enough. Note that the assets used for income generally also satisfy the reserve requirement, so the couple in this example would not need separate funds set aside.
Asset Depletion Mortgage Requirements
Asset depletion mortgage loans trade income documentation for asset strength, so the requirements center on what you hold and how well it is documented:
| Requirement | Typical Guideline | Notes |
|---|---|---|
| Eligible assets | Enough to cover the divisor math plus reserves | Post-down-payment balance drives the income |
| Credit score | 660 to 700 typical minimum | Stronger credit improves pricing and down payment flexibility |
| Down payment | 20% or more is common | Some programs flex with very strong asset positions |
| Reserves | Often 6 to 12 months of payments | Usually satisfied naturally by the asset pool |
| Documentation | 2 to 3 months of account statements | All pages; large deposits sourced |
Occupancy is flexible: primary residences, second homes, and investment properties all fit depending on the program. Exact guidelines vary, and the figures above are common ranges rather than commitments, so confirm your scenario with an expert before setting a budget. One preparation tip pays for itself: consolidate scattered accounts before applying. Five statements from two institutions document far more cleanly than fifteen statements from eight, consolidation avoids the small-account exclusions some programs apply, and underwriters move faster through a tidy file.
Asset Depletion Mortgage Rates
Asset depletion mortgage rates typically carry a premium over conventional rates, in line with other non-QM programs. Credit score, down payment, loan size, and the strength of the asset pool all move the pricing, and a deep asset position with clean documentation lands at the favorable end of the range.
Evaluate the premium against the real alternative, which for many of these borrowers is liquidating investments to pay cash rather than choosing some cheaper loan they do not qualify for. Selling assets can trigger capital gains taxes, disrupt a carefully built allocation, and pull money out of markets permanently, while financing keeps the portfolio intact and working toward its original purpose. A somewhat higher rate on a loan you can comfortably afford is frequently cheaper than the tax bill it avoids, and refinancing later remains available if rates fall or your documentation picture changes.
What Asset Depletion Mortgage Lenders Look For
Asset depletion mortgage lenders underwrite the quality of the asset pool as much as its size. Files move fastest when they show:
- Stability: assets held in the same accounts for months, not assembled the week before applying
- Liquidity: holdings that could actually be converted to cash without restrictions or penalties beyond the standard haircuts
- Clean sourcing: documented origins for recent large deposits, such as a home sale or business exit
- Sensible structure: the loan amount, assets, and reserves telling a consistent affordability story
Program rules differ more here than in almost any other non-QM niche, with divisors, haircuts, age thresholds, and eligible account types all varying widely from one guideline set to the next. Asset depletion mortgage lenders who handle these files regularly will calculate your income under each available formula and structure the application around the strongest one.
Asset Depletion vs. Other No Income Verification Options
Asset depletion is one branch of a larger family, and the right pick depends on where your financial strength lives:
| Program | Qualifies You On | Best Fit |
|---|---|---|
| Asset depletion | Liquid assets | Retirees, business sellers, portfolio income |
| Bank statement | 12-24 months of deposits | Active self-employed income |
| DSCR | Property rental income | Investment property purchases |
| No ratio | Credit and assets, no income math | Complex situations with large down payments |
Some borrowers combine sources, pairing partial asset depletion income with Social Security or pension income to reach a qualifying total, which preserves more of the portfolio for reserves and future plans. For the full landscape, our no doc mortgage guide and non-QM mortgage guide cover each branch in depth.
How to Apply for an Asset Depletion Mortgage
The application front-loads the asset work, then runs like a standard loan:
- Inventory your assets. List every liquid account with current balances, noting which are retirement accounts, your age relative to penalty-free withdrawal, and any funds already earmarked for the down payment.
- Get the income calculated. An expert applies the haircuts and divisors under each available program and shows you the qualifying income from each, along with the pricing tradeoffs.
- Pre-approval. Credit and asset documentation are verified, producing a pre-approval letter sized to the strongest formula so you can write offers with confidence.
- Underwriting and closing. Appraisal and final review proceed on a conventional-like timeline, typically three to five weeks from contract to keys.
Who Benefits Most From an Asset Depletion Mortgage?
The program fits anyone whose balance sheet outshines their income statement:
- Retirees with substantial savings but modest fixed income
- Founders and business owners after a sale, sitting on proceeds but between income streams
- Investors living off portfolio growth rather than distributions
- High-net-worth buyers who prefer financing over liquidating appreciated positions
- Recent inheritors with documented funds and limited personal income
A common thread runs through every profile: these buyers could often pay cash, and the asset depletion mortgage exists so they do not have to. Consider a couple who sold a business for $3 million and wants a $900,000 home while their next venture takes shape. Liquidating to pay cash parks nearly a third of their capital in one illiquid asset; an asset depletion mortgage finances the home off the documented proceeds while the rest of the capital stays deployed and available.
FAQs About Asset Depletion Mortgages
How does an asset depletion mortgage calculate income?
Eligible liquid assets, after the down payment, are divided by a set number of months. Non-QM programs commonly divide by 120, while agency-style versions divide by 360. The result counts as your monthly qualifying income.
Do retirement accounts count for an asset depletion mortgage?
Usually yes, with a haircut. Expect roughly 60% to 70% of the balance to count if you are under retirement age, and a higher percentage once you can withdraw without penalty. Program rules vary, so have a lender run your specific accounts.
Can I combine asset depletion income with other income?
Yes. Asset-derived income can stack with Social Security, pensions, annuities, or other documented income sources to reach the qualifying total, which often lets borrowers keep more of the asset pool in reserve. Stacking is especially useful for retirees whose fixed income covers most but not all of the qualifying requirement.
Is an asset depletion mortgage better than paying cash?
It can be. Paying cash may force the sale of appreciated investments and trigger capital gains taxes, while financing keeps the portfolio invested. The right answer depends on your tax picture and goals, so it is worth running both scenarios with your financial advisor and your lender.
How much in assets do I need to qualify?
Enough that the divisor math supports your target payment. As rough guidance under a 120-month program, every $120,000 in eligible assets produces about $1,000 of monthly qualifying income, so the asset requirement scales directly with the loan size you want and the rest of your debt picture.
What credit score do I need?
Most programs look for scores in the 660 to 700 range at minimum, with better pricing above that. A very strong asset position can act as a compensating factor and offset a score at the lower end of the range.
Put Your Portfolio to Work
An asset depletion mortgage rewards exactly the discipline that built your savings: the assets stay invested, the tax bill stays deferred, and the home gets financed on the strength of what you already hold. A short scenario review will show your qualifying income under each available formula and the loan size it supports, usually within a day of receiving your account statements.
Contact JVM Lending today to get pre-approved and see what your assets qualify you to buy.
Divisors, asset haircuts, and qualifying ranges referenced in this post vary by program and borrower profile and are subject to change. Verify current terms with a JVM Lending expert. This post does not provide tax advice; consult your tax professional about the implications of liquidating assets.
