Every year I sit across from borrowers who could write a check for the house and still get declined by a big bank. A retired engineer with $2.4 million in a brokerage account. A business owner who just sold her company. A consultant whose Schedule C shows $41,000 after deductions while $600,000 sits in savings.
Conventional underwriting has one question: what is your documented monthly income? If the answer is small, the file dies — no matter what your balance sheet looks like. An asset depletion loan asks a different question entirely: how much monthly income could these assets reasonably support?
That single change in perspective is why this program has quietly become one of the most useful tools in the Non-QM toolbox.
What an asset depletion loan actually is
An asset depletion loan — also marketed as an asset qualifier, asset-based, or income dissipation loan — is a mortgage that qualifies you on your balance sheet instead of your paycheck. The lender takes your verified liquid assets, applies a haircut to the volatile ones, divides by a fixed number of months, and treats the result as monthly income for debt-to-income purposes.
The most important thing to understand, and the part borrowers most often get wrong: nothing is actually depleted. You do not liquidate the accounts. You do not pledge them. You do not agree to draw them down on a schedule. The word "depletion" describes a calculation, not an obligation. Your portfolio stays exactly where it is, invested exactly how you want it.
These loans sit in the Non-QM category alongside bank statement loans and DSCR loans — products that fall outside Fannie Mae and Freddie Mac's Qualified Mortgage box. That category is no longer niche. Non-QM lending crossed 10% of monthly rate-lock volume in July 2026, which means roughly one in ten American mortgages is now written outside the agency rulebook.
How the calculation works
The math is refreshingly simple. Three steps:
- Total your eligible assets. Checking, savings, money market, brokerage, and retirement accounts.
- Subtract what you're spending and what's held back. Down payment, closing costs, and required reserves come off the top.
- Divide by the program's divisor. Non-QM asset depletion programs commonly use 120 months. Agency-style versions run longer — often 240 or 360 months — which produces less income from the same pile of money.
Here's a real-world shape of it. Say you have $1.5 million in a brokerage account and you're buying a $900,000 home with 25% down:
| Step | Amount |
|---|---|
| Total liquid assets | $1,500,000 |
| Less down payment (25%) | –$225,000 |
| Less closing costs & reserves | –$65,000 |
| Less 30% haircut on securities | –$363,000 |
| Eligible assets | $847,000 |
| Divided by 120 months | $7,058/month qualifying income |
That $7,058 is what the underwriter uses. Against a 43% debt-to-income ceiling, it supports roughly $3,035 in total monthly debt — enough for a comfortable payment on that purchase, from a borrower whose tax return might show almost nothing.
💡 The divisor is negotiable — sort of
Not every lender uses 120 months, and the difference is enormous. The same $847,000 produces $7,058/month at 120 months but only $2,353/month at 360 months. If your first quote came back short on income, the fix is often a different lender's program rather than a bigger down payment. This is exactly the kind of thing worth a phone call before you assume you don't qualify.
2026 requirements at a glance
| Requirement | Typical 2026 guideline |
|---|---|
| Credit score | 680 minimum; 720+ for best pricing |
| Assets needed | $500,000–$1M+ remaining after down payment and costs |
| Down payment | 20–25% (max 75–80% LTV on purchase) |
| Debt-to-income | 43% or lower, using calculated asset income |
| Reserves | 3–12 months, held separately from depletion assets |
| Asset seasoning | 60–90 days in the account before application |
| Employment history | Not required |
That last line is the one that surprises people. There is no job requirement. No two-year employment history. No W-2s, no pay stubs, and in most programs no tax returns at all.
Which assets count — and which don't
Lenders separate assets by how quickly and reliably they convert to cash, then discount accordingly.
Counted at or near full value
- Checking and savings accounts
- Money market and certificates of deposit
- Cash value of life insurance policies
Counted at a discount, usually 20–30%
- Taxable brokerage accounts — stocks, bonds, mutual funds, ETFs
- Retirement accounts if you're 59½ or older, or if penalty-free access is documented
Discounted heavily or excluded
- Retirement accounts before 59½ — often haircut further or excluded outright
- Assets held in a business name rather than personally
- Cryptocurrency — treated inconsistently across lenders; some exclude it entirely
- Home equity, vehicles, collectibles, and any illiquid holding
- Recent large deposits that can't be sourced and haven't seasoned
Two practical notes. Assets generally need to be in your personal name — if your money sits in an LLC or S-corp, talk to a loan officer early, because moving it has underwriting and tax implications. And seasoning matters: a $400,000 wire that landed last week is a documentation problem; the same money sitting there 90 days is not.
Who this program is built for
In practice, four groups of borrowers use asset depletion more than anyone else:
Retirees with portfolios but little taxable income. Someone 62 with $1.8 million invested and $2,400 a month in Social Security fails a conventional DTI test badly. Asset depletion fixes that. If you're 62+, it's also worth comparing against a reverse mortgage.
Business owners with aggressive write-offs. The same dynamic that drives self-employed borrowers toward bank statement loans applies here — deductions that are smart tax planning are terrible mortgage math. If your business generates strong cash flow, a bank statement loan usually fits better. If the wealth is already accumulated and parked, asset depletion wins.
Recent business sellers. A liquidity event is a strange moment financially: you have never had more money and never looked worse on paper. No employment history to point to, and the proceeds haven't generated income yet. This is asset depletion's single best use case.
High-net-worth borrowers with irregular income. Consultants, investors, and anyone whose income arrives in unpredictable lumps rather than steady deposits.
Asset depletion vs. bank statement vs. DSCR
These three products solve genuinely different problems, and picking the wrong one wastes weeks.
| Asset Depletion | Bank Statement | DSCR | |
|---|---|---|---|
| Qualifies on | Your assets | Business deposits | Property rent |
| Best for | Wealth without income | Cash flow without tax income | Investment property |
| Tax returns | No | No | No |
| Primary residence | Yes | Yes | No |
| Typical down | 20–25% | 10–20% | 20–25% |
If you're running a profitable business right now, start with a bank statement loan — the pricing is usually better and the down payment lower. If you're buying a rental, DSCR is almost always the answer. Asset depletion is the tool for when the wealth is already made and sitting still. And these aren't mutually exclusive: blending asset income with 1099, rental, or pension income is common and often what gets a borderline file approved.
What to expect on rates and timeline
Asset depletion is Non-QM, which means the loan is sold to private securitization buyers rather than Fannie or Freddie. Those buyers price documentation risk, so expect a premium over the 6.53% conventional average we're seeing in late August 2026 — typically somewhere in the high sixes to mid sevens depending on your credit, down payment, and reserves.
Three levers move that number: put 30% down instead of 20%, bring a 740 FICO instead of a 690, and document reserves well beyond the minimum. Borrowers who do all three often land within a half point of conventional pricing.
On timing, a well-prepared asset depletion file closes as fast as any other loan — we regularly close in 21 days or less. The variable is documentation: 60–90 days of complete statements for every account, all pages included, with large deposits sourced up front. Files that stall almost always stall on a missing page 4 of 6, not on the underwriting decision.
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Frequently asked questions
How much money do I need for an asset depletion loan?
Most 2026 programs want roughly $500,000 to $1 million or more in eligible liquid assets remaining after your down payment, closing costs, and required reserves. Under a 120-month divisor, every $120,000 of eligible assets creates about $1,000 per month of qualifying income — so work backward from the payment you need to support.
Do I have to spend down or liquidate my accounts?
No. Asset depletion is purely a math exercise performed at underwriting. Your money stays invested and under your control. The lender never requires you to withdraw, pledge, or liquidate the accounts used in the calculation, and there's no schedule you're committing to afterward.
What credit score do I need?
Most programs start at 680, with the strongest pricing at 720 and above. Maximum loan-to-value is generally 75–80% on a purchase, so plan on 20–25% down. Below 680, you'll likely need a larger down payment or a different program.
Can I use a 401(k) or IRA?
Usually yes if you're 59½ or older, typically at a 70–80% discount to account for taxes and market risk. Before 59½, treatment varies widely — some lenders discount heavily, others exclude retirement accounts entirely unless you can document penalty-free access. Worth confirming before you build a plan around them.
Can I combine asset depletion with other income?
Yes, and it's common. Most lenders let you blend asset-based income with Social Security, pension, rental, 1099, or bank statement business income. Blending is often exactly what pushes a borderline file comfortably under the debt-to-income limit.
The bottom line
If you have substantial assets and a tax return that doesn't reflect them, you're not an edge case and you're not out of options — you're being measured with the wrong yardstick. Conventional underwriting was built around a steady paycheck, and a growing share of American wealth simply doesn't arrive that way anymore.
Have someone run the actual calculation on your actual accounts before assuming anything. Divisors, haircuts, and asset eligibility vary enough between lenders that the same borrower can be declined at one shop and comfortably approved at another.