What Is an Asset Depletion Loan?
An asset depletion loan is a Non-QM mortgage product that allows borrowers to qualify based on their liquid assets rather than traditional employment income. Instead of using W-2s, tax returns, or pay stubs to prove income, the lender takes your total qualifying liquid assets — bank accounts, brokerage accounts, retirement funds, and other investment holdings — and divides them by a set number of months (typically 360) to calculate a hypothetical monthly "income."
For example, if you have $1.8 million in qualifying liquid assets, the lender divides by 360 months to derive $5,000/month in qualifying income. This figure is then used to calculate your debt-to-income ratio just like traditional income would be. The assets themselves are not pledged or restricted — you retain full access to your funds.
Asset depletion loans were designed for a specific borrower profile: high-net-worth individuals who have accumulated significant wealth but do not have traditional employment income or whose income is difficult to document. This includes retirees, trust fund beneficiaries, angel investors, entrepreneurs between ventures, and international investors with substantial liquid holdings.
How Asset Depletion Loans Work
The qualification process differs significantly from conventional lending:
- Asset documentation: You provide statements for all qualifying liquid asset accounts — checking, savings, money market, brokerage, retirement (IRA, 401k), and other investment accounts. Typically, the most recent 2 months of statements are required.
- Asset verification: The lender verifies the balances and confirms the assets meet their eligibility criteria. Generally, the assets must be in U.S. financial institutions or easily liquidated international accounts.
- Income calculation: The lender totals qualifying assets and divides by the depletion factor (usually 360 months for a 30-year loan, sometimes 240 months). This produces a monthly income figure used for DTI calculations.
- Asset type weighting: Not all assets are counted equally. Cash and securities are typically counted at 100%. Retirement accounts may be discounted to 60-70% to account for penalties and taxes upon early withdrawal. Real estate equity, business assets, and illiquid holdings are usually excluded.
- Standard underwriting: Once the "income" is established, the loan goes through standard underwriting — credit review, appraisal, title, and DTI analysis.
- Closing: The loan closes like any other mortgage. Your assets remain in your accounts — they are not frozen, pledged, or restricted in any way.
Asset Depletion Loan Requirements
- Minimum liquid assets: $500,000 or more in qualifying liquid assets. Some lenders set the floor at $1 million. The exact minimum depends on the loan amount and DTI requirements.
- Asset types accepted: Cash (checking, savings, money market), stocks, bonds, mutual funds, ETFs, retirement accounts (often at 60-70% value), and some trust assets. Real estate equity, business interests, and cryptocurrency are usually excluded or heavily discounted.
- Credit score: 680+ for most asset depletion programs. Some lenders offer options down to 620 at higher rates and lower LTV.
- Down payment: 20-30% for investment properties. Primary residences may allow 15-20% down.
- DTI ratio: Typically capped at 43-50%, using the asset-derived income figure.
- Reserves: 12-24 months of PITIA in liquid reserves after accounting for the down payment and closing costs. These reserves are separate from the assets used for income qualification.
- Property types: Primary residences, second homes, and investment properties. Some programs limit property types for investment use.
Current Asset Depletion Loan Rates in 2026
Asset depletion loans are priced as Non-QM products, with rates in 2026 typically ranging from 6.75% to 8.5%. The rate depends on credit score, LTV, loan amount, and the lender. Borrowers with 740+ credit, 25%+ down payment, and substantial assets ($1 million+) are at the lower end of this range. Lower credit scores, higher LTV, and smaller asset pools push rates higher.
Compared to conventional rates, asset depletion loans carry a premium of 0.75-2.0%. This premium reflects the Non-QM classification and the unique underwriting approach. However, for borrowers who cannot qualify conventionally, the rate is competitive relative to other Non-QM alternatives.
Both fixed-rate and adjustable-rate (ARM) options are available. ARMs may offer lower initial rates (5/1 ARM, 7/1 ARM), which can make sense for investors who plan to sell or refinance within the initial fixed period.
Pros and Cons of Asset Depletion Loans
Advantages
- Qualify without employment income — ideal for retirees, investors, and entrepreneurs
- Assets are not pledged, frozen, or restricted — you retain full access to your funds
- 30-year fixed-rate options available for long-term stability
- Available for primary residences, second homes, and investment properties
- Works for borrowers with complex income situations that do not fit conventional underwriting
- No requirement for current employment or self-employment
Disadvantages
- Requires substantial liquid assets ($500,000+ minimum, often $1 million+)
- Higher rates than conventional loans (0.75-2.0% premium)
- Retirement accounts are discounted (60-70% counted), reducing qualifying income
- Not available at all lenders — requires a Non-QM specialist
- Larger down payment requirements (20-30%)
- Complex qualification process compared to simpler products like DSCR loans
Who Should Use an Asset Depletion Loan?
- Retirees and early retirees: You have accumulated substantial savings and investments but no longer have employment income. Social Security and pension income may not be enough to qualify conventionally, but combined with asset depletion, you can qualify for the full loan amount you need.
- Entrepreneurs and investors: You have significant liquid net worth from business exits, stock options, or investment returns, but your current W-2 or tax return income is low or nonexistent.
- Trust beneficiaries: You receive distributions from a trust that may be difficult to document as traditional income. If the trust assets are substantial, asset depletion can use the trust holdings for qualification.
- Foreign nationals: International investors with significant assets in U.S. financial institutions who do not have U.S. employment income.
- Real estate investors with portfolio wealth: You have a large brokerage account or retirement savings and want to acquire investment properties without showing traditional income documentation.
Asset Depletion vs. Other Options
Asset Depletion vs. DSCR: DSCR loans qualify based on property cash flow, not your personal assets. If you are buying a rental property that cash-flows well, DSCR is simpler and may offer better rates. Asset depletion is the better choice when the property's DSCR is insufficient or when purchasing a primary residence or second home that does not generate rental income.
Asset Depletion vs. Bank Statement: Bank statement loans require 12-24 months of regular deposits from self-employment. If you are self-employed with consistent deposits, bank statement may qualify you for more. Asset depletion is better when you have large lump-sum wealth rather than consistent income flows.
Asset Depletion vs. Conventional: If you have documentable income that qualifies conventionally, always take the conventional loan for the lower rate. Asset depletion is specifically designed for when conventional qualification fails despite having significant wealth.
How to Apply for an Asset Depletion Loan
- Step 1 — Inventory your liquid assets: Tally all accounts that may qualify: checking, savings, money market, brokerage, IRA, 401(k), and other investment accounts. Calculate the total, remembering that retirement accounts are typically counted at 60-70%.
- Step 2 — Calculate your qualifying income: Divide your total qualifying assets by 360. This is your approximate monthly qualifying income. For example, $1.5 million in qualifying assets = $4,167/month. Compare this to the expected PITIA payment to estimate your DTI.
- Step 3 — Find a Non-QM lender: Not all lenders offer asset depletion programs. Seek out Non-QM specialists, portfolio lenders, and brokers with access to Non-QM products.
- Step 4 — Submit documentation: Provide 2 months of statements for all qualifying accounts, identification, credit authorization, and the property details (purchase contract or refinance information).
- Step 5 — Underwriting and closing: The lender verifies assets, orders the appraisal, and processes the loan. Timeline is typically 30-45 days, similar to conventional loans.
Common Mistakes to Avoid
- Moving assets before or during the application: Large transfers between accounts during the documentation period create sourcing issues. Keep your accounts stable during the application process.
- Counting illiquid assets: Real estate equity, business ownership stakes, private equity, and most alternative investments do not count as liquid assets for depletion. Do not assume everything in your net worth qualifies.
- Forgetting the retirement account discount: If $800,000 of your $1.2 million is in a 401(k), the lender may only count $520,000-560,000 (65-70%) of the retirement funds. This significantly reduces your qualifying income.
- Not considering DSCR as an alternative: If you are buying a rental property with strong cash flow, a DSCR loan is simpler, faster, and may offer a better rate. Asset depletion is best when DSCR is not an option.
- Underestimating the asset threshold: To buy a $500,000 investment property with 25% down and qualify via asset depletion, you need roughly $1.2-1.5 million in qualifying liquid assets after the down payment and reserves. Run the numbers before applying.
Asset depletion loans unlock real estate investment for high-net-worth individuals whose financial profile does not fit into conventional lending boxes. If you have the assets but not the traditional income documentation, this program was designed for exactly your situation. Get matched with a Non-QM lender who specializes in asset depletion today.