Asset Depletion Mortgage 2026: How to Qualify Using Savings and Investments
Asset depletion mortgages are built for borrowers who are wealthy on paper but do not show the kind of monthly income a standard lender wants. If you are a retiree, investor, or high-net-worth buyer with strong liquid assets, this can be the approval path that makes the file work.
Best fit
Retirees + HNW buyers
Main proof
Liquid assets
Typical profile
Low taxable income
What is an asset depletion mortgage?
Instead of focusing mainly on monthly job income, the lender calculates a theoretical income stream from your eligible assets. That can include cash, brokerage funds, and sometimes retirement accounts, depending on the program. The logic is simple: if you have $2M+ in liquid wealth, you can repay a $500K mortgage even with $0 W-2 income.
Real example: how asset depletion works
Scenario: Retiree with $2.4M in assets
- Total liquid assets: $2,400,000 (brokerage + savings)
- Loan amount needed: $600,000
- Loan term: 30 years (360 months)
- Asset depletion calculation: $2,400,000 ÷ 360 = $6,667/month qualifying income
- Monthly payment (7% rate): $3,992
- DTI calculation: $3,992 ÷ $6,667 = 60% (acceptable for asset depletion)
- Result: APPROVED with $0 W-2 income!
Who uses asset depletion mortgages most often?
Asset depletion loans are perfect for wealthy borrowers with low taxable income:
- Retirees (age 60+) who live off investments instead of salary - $50K/year taxable income but $3M in brokerage accounts
- High-net-worth buyers with large liquid portfolios - tech executives post-IPO with $5M+ in stock but low base salary
- Business owners who keep taxable income low for tax efficiency - $40K reported income but $2M in business savings
- Recent liquidity-event borrowers after selling a company or large asset - just sold business for $10M, no current employment
- Trust fund beneficiaries with inherited wealth - $4M trust but no traditional employment income
How asset depletion calculation works (step-by-step)
Lenders use a simple formula to convert your assets into qualifying income:
| Step | Calculation | Example ($1.8M assets, $450K loan) |
|---|---|---|
| 1. Total eligible assets | Sum all qualifying liquid assets | $1,800,000 |
| 2. Subtract reserves | Lender requires 6-12 months PITI reserves | $1,800,000 - $36,000 = $1,764,000 |
| 3. Divide by loan term | Divide by number of months (360 for 30-year) | $1,764,000 ÷ 360 = $4,900/month |
| 4. Apply haircut (optional) | Some lenders discount 10-30% for volatility | $4,900 × 0.80 = $3,920/month |
| 5. Calculate DTI | Monthly payment ÷ qualifying income | $2,994 ÷ $3,920 = 76% DTI |
| 6. Approval decision | Asset depletion allows 50-80% DTI | APPROVED |
💰 Have $1M+ in assets but low income?
Asset depletion lenders have wildly different calculation methods. One lender may approve $800K while another declines. Shopping is critical.
What assets count for asset depletion loans?
Not all assets are treated equally. Here's what lenders typically accept:
| Asset type | Eligible? | Haircut/discount | Notes |
|---|---|---|---|
| Checking/savings | Yes (100%) | 0% (full value) | Most straightforward, fully liquid |
| Brokerage accounts (stocks/bonds) | Yes (usually) | 10-30% discount | Discounted for market volatility |
| 401(k)/IRA (age 59.5+) | Yes (often 70%) | 30% for taxes/penalties | Penalty-free withdrawal age |
| 401(k)/IRA (under 59.5) | Sometimes (60%) | 40% for taxes/penalties | Early withdrawal penalties apply |
| Vested stock options | Sometimes (50-70%) | 30-50% discount | Must be vested and liquid |
| Cryptocurrency | Rarely | 50-70% discount | High volatility, few lenders accept |
| Real estate equity | No | N/A | Not liquid, use HELOC instead |
| Business equity (private) | No | N/A | Illiquid, hard to monetize |
Why asset depletion loans work where standard loans fail
Standard underwriting can make affluent borrowers look weak if their tax returns show little income. Here's why:
Standard underwriting vs asset depletion
| Borrower profile | Standard underwriting | Asset depletion |
|---|---|---|
| Retiree: $3M assets, $30K/year income | Declines (DTI too high) | Approves $750K loan |
| Business owner: $2M savings, $40K taxable income | Qualifies for $180K max | Qualifies for $500K+ |
| Tech exec: $5M stock, $80K base salary | Qualifies for $360K | Qualifies for $1.2M+ |
Bottom line: Asset depletion loans are designed to solve the mismatch between wealth and reportable income. They're less about earning a paycheck and more about demonstrating durable financial capacity.
Asset depletion vs bank statement vs conventional loans
Three ways to qualify when traditional income doesn't work:
| Feature | Asset depletion | Bank statement | Conventional |
|---|---|---|---|
| Best for | Wealth strong, income thin | Business deposits strong | W-2 income qualifies easily |
| Qualifying method | Liquid assets ÷ loan term | 12-24 months deposits | W-2, tax returns, paystubs |
| Typical borrower | Retiree, HNW, trust fund | Self-employed, 1099 | W-2 employee |
| Min assets needed | $1M-$2M+ | N/A (income-based) | N/A (income-based) |
| Interest rate | 7.25-8.00% | 7.00-7.75% | 6.75-7.25% |
| Down payment | 20-30% | 15-25% | 3-20% |
⚠️ What weakens an asset depletion file
- Assets that are not truly liquid: Real estate equity, private business ownership, unvested stock options = not eligible
- Large recent unexplained transfers: Moving $500K between accounts right before application = red flag for underwriters
- Too little left after required reserves: If lender requires 12 months reserves and you barely have enough, file weakens
- Choosing a lender that barely understands the product: Generic lenders decline, specialists approve same file
- Volatile asset mix: 80% crypto, 20% cash = most lenders decline. 80% blue-chip stocks, 20% cash = much better
- Insufficient documentation: Need 2-3 months statements for ALL accounts used in calculation
Asset depletion loan requirements in 2026
Asset depletion loans have different requirements than conventional mortgages:
| Requirement | Typical guideline | Why it matters |
|---|---|---|
| Minimum assets | $1M-$2M+ liquid | Need enough to generate qualifying income |
| Credit score | 680-720+ preferred | 740+ gets best pricing |
| Down payment | 20-30% | Higher down = lower risk for lender |
| Reserves | 6-12 months PITI | After using assets for qualification |
| DTI limit | 50-80% (much higher than conventional) | Assets provide cushion for high DTI |
| Documentation | 2-3 months statements for all accounts | Prove assets exist and are liquid |
🎯 This is not a commodity loan
Asset-based qualification varies wildly by lender. One lender may count 70% of your 401(k), another counts 0%. One requires $2M minimum, another $1M. If you compare one lender only, you can easily get the wrong answer on what you qualify for.
Frequently asked questions
How much in assets do I need for an asset depletion loan?
Typically $1M-$2M+ in liquid assets minimum. The exact amount depends on your loan size. For a $500K loan, you'd need $1.5M-$2M in assets. For a $1M loan, you'd need $3M-$4M in assets.
Can I use my 401(k) or IRA for asset depletion?
Yes, but with 30-40% haircut for taxes and penalties. If you're over 59.5, the haircut is smaller (30%). Under 59.5, expect 40% discount. Some lenders won't count retirement accounts at all.
What interest rate should I expect on an asset depletion loan?
Expect 7.25-8.00% in March 2026, which is 0.50-0.75% higher than conventional loans. Jumbo asset depletion loans may price slightly higher (8.00-8.50%).
Is asset depletion the same as asset utilization?
Yes, same product, different names. Some lenders call it "asset depletion," others "asset utilization" or "asset dissipation." All refer to qualifying based on liquid assets instead of traditional income.
Can I combine asset depletion with other income?
Yes. If you have $50K/year W-2 income + $2M in assets, lenders can use both. This strengthens your file and may get you better pricing or higher loan amount.
Do all lenders offer asset depletion loans?
No. Only portfolio and non-QM lenders offer this. Big banks (Wells Fargo, Chase, Bank of America) typically don't. You need a specialist lender that understands asset-based underwriting.