Turn a portfolio into qualifying income. For borrowers with substantial assets and little or no traditional paycheck.
There is a particular kind of borrower who gets declined for reasons that make no sense to them: retired with $2 million in a brokerage account, or newly liquid after selling a business, or living off investments by choice. Plenty of money. Very little of what an underwriter calls income.
Conventional underwriting is built around a monthly figure arriving from somewhere. Assets sitting in an account do not produce one, so on a standard application they support the down payment and the reserves and then contribute nothing to qualifying.
An asset depletion loan — sometimes called asset utilisation — converts the portfolio itself into a monthly income figure. Nothing is liquidated and nothing is pledged. The calculation is a way of expressing what the assets could support if they were drawn down.
Eligible assets are totalled, then divided by a number of months.
Eligible assets ÷ months = qualifying monthly income
That divisor does most of the work, and it is where programs differ sharply. Non-QM asset depletion programs commonly divide by 120 months. Agency-style versions built on Fannie Mae and Freddie Mac guidelines generally divide by 360.
The gap is not a rounding difference. The same portfolio produces three times the qualifying income under one formula as the other, which is the single biggest reason a borrower turned down by a bank can be comfortably approved on a Non-QM program.
| $1,500,000 in eligible assets | Divisor | Qualifying income |
|---|---|---|
| Non-QM asset depletion | 120 months | $12,500 / month |
| Agency-style | 360 months | $4,167 / month |
Illustrative. Divisors, eligible asset types and discounts vary by program and investor — confirm the specifics for your file before relying on a figure.
Before the division happens, assets are discounted according to how liquid and how volatile they are. Cash is cash. A brokerage account might swing 20% before you can get to it, and a retirement account you cannot touch without a penalty is further away still.
| Asset type | Typically counted at |
|---|---|
| Checking, savings, money market, CDs | ~100% |
| Stocks, bonds, mutual funds | 70–80% |
| Retirement accounts, below withdrawal age | 60–70% |
| Retirement accounts, penalty-free age | Higher |
| Business operating accounts, restricted stock | Generally excluded |
Ranges are typical of the market rather than a specific program. The exact haircuts applied to your file depend on the investor.
Retirees with strong balances who have not yet started drawing, or whose draw is smaller than what they could support.
Sellers of a business holding a large cash position and no current W-2.
Investors living off a portfolio whose realised income varies year to year and looks unstable on tax returns.
It also combines. Asset depletion income can often be added to whatever documented income does exist — a pension, Social Security, part-time work — rather than replacing it. If your situation is closer to self-employment, bank statement loans or 1099 and P&L programs are usually the better fit.
Program parameters shown are typical of the market and vary by investor. Nothing here is a commitment to lend. All financing is subject to credit approval, property review and program availability.
No obligation — find the right fit for your situation.