Asset depletion loans: qualify with what you own, not what you earn

How an asset depletion mortgage works

The mechanics are simpler than the name suggests. The lender isn't asking what your job pays. It's asking what your own portfolio could pay you, month after month, if you treated it like a pension. Three steps:

1. Add up your eligible assets. Checking, savings, CDs, taxable brokerage accounts, and retirement funds, all verified with account statements.
2. Apply the program's discount. Cash usually counts at or near full value. Market-sensitive assets like stocks, bonds, and mutual funds are typically counted at around 70% of value. Retirement accounts are discounted based on the program and your age.
3. Divide by the program's divisor. The discounted total is divided by a set number of months. The result is your monthly qualifying income — the number underwriting actually uses.

Here's the part most websites get wrong or quietly skip: there is no single, universal divisor. Across the lenders I work with, I've seen programs that divide by 84 months, programs that use 120 or 240, and programs built on Fannie Mae's framework that stretch the math across 360 months. The divisor your file lands on can quadruple — or quarter — the qualifying income produced by the exact same portfolio. Treating asset depletion as "one formula" is the most expensive mistake in this corner of the mortgage market.

One misconception worth killing early: nothing actually gets depleted. You are not required to sell a single share, close an account, or set up withdrawals. The "depletion" is hypothetical math the underwriter runs on paper to translate your balance sheet into a monthly income figure. Your portfolio stays invested, your accounts stay exactly where they are, and your financial advisor never gets a panicked phone call. Do expect down payments and post-closing reserve requirements to run higher than on a conventional loan — the exact figures are set by each program, and they vary between lenders just as widely as the divisors do. That's one more lever a broker can pull on your behalf and a bank cannot.

Asset depletion sits inside the Non-QM family — the programs built for borrowers who don't fit conventional documentation rules. For the full menu of options, start with my Non-QM loans guide. This page goes deep on the asset-based branch.

Which assets count — and at what percentage

Not every dollar you own counts as a full dollar of qualifying assets. Lenders apply "haircuts" — discounts that account for market risk and access restrictions. Here's the typical treatment, with the caveat that every single percentage below varies by program:

Read that table again with one thing in mind: those percentages are negotiating leverage. A lender that counts your brokerage at 80% instead of 70% just handed you tens of thousands of dollars in extra qualifying assets without you moving a single account. That spread between programs is exactly why this loan should be shopped, not taken off the first rate sheet you're shown.

The worked example nobody else shows you

Every page ranking for this loan publishes the formula. I haven't found one that actually runs it. So let's run it — honestly, with the range a real file would see.

Same couple. Same $1.2 million. Depending on which program their file lands in, their qualifying income is anywhere from roughly $2,300 to $10,000 a month. A bank with one asset depletion program gives you one of those rows and calls it your answer. A broker's job — my job — is to know which lenders sit at the top of that table for a file like yours, and to stack that income with anything else you have: Social Security, pension, rental income, dividends. The formula isn't the product. The shopping is.

Who asset depletion loans are built for

In 28 years I've watched the same four borrowers get turned away by banks that should have known better. If you're one of them, this program exists for you:

• Retirees who haven't started withdrawals. You spent decades building a seven-figure nest egg, and because you're not drawing it down yet, a traditional underwriter says you have "no income." Asset depletion turns the nest egg itself into the income.
• High-net-worth households living off investments. Dividends, capital gains, and trust distributions rarely show up on paper the way a salary does. Your balance sheet qualifies you here, not your 1040.
• Business sellers sitting on proceeds. You just exited the company that paid you for twenty years. The wire hit your account, but your "employment income" went to zero overnight. Asset depletion bridges exactly that gap.
• Self-employed owners with strong assets and lean tax returns. Your CPA did their job and wrote everything down. Now the bank says you don't earn enough — while you're sitting on years of accumulated savings. See my full self-employed mortgage guide for everything that works in that situation.

The combination nobody talks about: asset depletion + bank statement income

Here's a section you won't find on any other page covering this loan: the two programs can work together. Several of my wholesale lenders allow a self-employed borrower to qualify with bank statement income from an active business plus asset depletion income from their portfolio — on the same application. For a business owner with real deposits and real savings but a deliberately lean tax return, that combination can be the difference between qualifying for the house you settled for and the house you actually wanted. Banks don't offer it because their single program can't blend. Brokers can.

Asset Depletion Loans in Michigan

If you've searched for an asset depletion loan in Michigan, you've probably noticed something strange: almost nobody here talks about this program. The pages that rank are national lenders with no Michigan presence, or out-of-state blogs that have never closed a loan in Oakland County. Meanwhile, Michigan is full of exactly the borrowers this loan was designed for — retirees downsizing from the family home in Farmington Hills or West Bloomfield, lakefront owners with serious portfolios and modest paper income, and business owners across Metro Detroit who sold the company and want their next home on their terms.

I'm based at 30110 Orchard Lake Rd in Farmington Hills, and Atlantis Mortgage (NMLS #129429) is licensed in Michigan, Florida, Texas, and California. That four-state footprint matters more for this loan than almost any other: a large share of my asset depletion clients are Michigan retirees buying their second chapter in Florida or Texas. One broker, one file, both states — and the same 50+ lender marketplace working for you on either end of the move.

One bank's formula vs. a broker who shops the math

Walk into a bank that offers asset depletion and you get that bank's version: one haircut schedule, one divisor, one set of reserve requirements. If your file fits, fine. If it doesn't, the answer is no — not because asset depletion doesn't work for you, but because that bank's single recipe doesn't. You'll never be told a different recipe exists down the street, because the loan officer can only sell what's on their own shelf.

As a wholesale broker, I work the other direction. Atlantis Mortgage has access to multiple asset depletion programs across 50+ wholesale lenders, each with its own divisor, its own asset haircuts, its own view of retirement accounts, and its own appetite for blending asset income with Social Security, pensions, or bank statement deposits. My job is to place your portfolio with the lender whose math treats it best — and as the worked example above shows, the spread between the best and worst program for the same borrower isn't a rounding error. It can be four times the qualifying income.

Asset depletion loan FAQ

What is an asset depletion loan and how does it work?

An asset depletion loan, also called an asset depletion mortgage, qualifies you for a home loan using your assets instead of employment income. The lender totals your eligible assets, applies a program discount to market-sensitive accounts, and divides the result by a set number of months, commonly anywhere from 84 to 360 depending on the lender and program. That monthly figure is treated as your qualifying income, with no tax returns or pay stubs required.

Who is eligible for an asset depletion loan?

Asset depletion loans are built for borrowers with significant assets but limited documented income: retirees who have not started withdrawals, high-net-worth households living off investments, people who recently sold a business or received a settlement, and self-employed borrowers whose tax returns understate what they actually make. You generally need enough verifiable assets to produce meaningful qualifying income after the program's discount and divisor are applied.

Which assets count toward an asset depletion loan?

Most programs count checking, savings, money market accounts, and CDs at or near 100 percent of value. Stocks, bonds, and mutual funds in a taxable brokerage account are typically counted at around 70 percent to allow for market swings. Retirement accounts such as 401(k)s and IRAs are usually discounted, and their treatment often depends on your age. Every lender sets its own percentages, which is exactly why I shop multiple programs for every file.

How are asset values calculated for qualification?

Lenders verify assets with recent account statements, usually one to three months for bank accounts and the most recent statements for brokerage and retirement accounts. Each account is then counted at its program percentage: full value for cash, a discounted value for securities and retirement funds. The combined eligible total is divided by the program's divisor to produce your monthly qualifying income.

Can I refinance with an asset depletion loan?

Yes. Asset depletion programs are available for purchases, rate-and-term refinances, and cash-out refinances, depending on the lender. Refinancing this way is common for retirees who bought their home with employment income years ago and no longer show enough on paper to refinance through a traditional full-documentation program.

Does an asset depletion loan affect my rate or terms?

Asset depletion loans are Non-QM programs, so pricing and terms are set program by program and typically differ from conventional financing. Down payment and reserve requirements also vary by lender. Because each lender prices these loans differently, having a broker compare multiple asset depletion programs side by side matters more here than almost anywhere else in the mortgage market.