Asset-Based Qualification
Use eligible assets to support mortgage qualification.
Asset depletion programs calculate a qualifying monthly income stream from eligible verified assets, helping borrowers whose balance sheet is stronger than their recurring employment income.
Program overview
How this mortgage review works
Asset depletion converts an eligible pool of verified assets into a calculated monthly income amount. The program may discount certain asset types, subtract closing funds and required reserves, and divide the remaining eligible balance over a defined term.
Not every asset is treated the same. Cash, brokerage funds, retirement accounts, restricted stock, business funds, trusts, and jointly held assets may have different eligibility, access, discount, and documentation rules.
The borrower must demonstrate ownership and access without relying on prohibited or double-counted funds. Existing recurring income may sometimes be combined with the depletion calculation, depending on the selected program.
Who it may fit
Borrower and property profiles
- Retirees with substantial liquid or investment assets
- High-net-worth borrowers with limited recurring taxable income
- Business owners holding significant personal assets
- Borrowers transitioning between employment, retirement, or investment income
What drives the review
Key qualification factors
- Type, ownership, and liquidity of assets
- Access restrictions, taxes, penalties, and discounts
- Funds needed for down payment, closing, and reserves
- Depletion term and program calculation
- Existing recurring income and liabilities
- Credit, occupancy, property, and transaction type
Common uses
Scenarios this program may address
- Purchase a home after retirement
- Qualify with substantial assets and limited salary
- Refinance while transitioning between income sources
- Combine eligible assets with pension, Social Security, or investment income when allowed
Documentation
What may be requested
- Recent complete statements for all assets being considered
- Evidence of ownership and access
- Retirement-account terms or distribution rules when applicable
- Trust or entity documents when assets are not held individually
- Documentation of closing funds and required reserves
- Property, credit, and transaction documents
- The exact list depends on the borrower, property, transaction, state, and selected program.
The exact list depends on the borrower, property, transaction, state, and selected program.
From online profile to underwriting
From online profile to underwriting
Identify the asset accounts and ownership structure
Separate closing funds and required reserves
Apply program discounts and depletion calculation
Complete credit, property, appraisal, and underwriting review
Important context
What to understand before moving forward
- The same funds generally cannot be counted simultaneously as income, closing funds, and reserves without permitted treatment
- Retirement assets may be discounted for access, taxes, or age restrictions
- Market-sensitive assets can require updated values before closing
- Large withdrawals or transfers during the process may change the calculation
Questions about Asset Depletion Loans
What assets can be used?
Eligible cash, brokerage, retirement, and other documented assets may be considered. Exact treatment varies by program.
Do I have to spend the assets?
The calculation uses verified eligible assets for qualification; it does not necessarily require liquidating all of them. Closing funds and reserves are handled separately.
How is monthly income calculated?
Programs generally adjust the eligible asset balance and divide it by a defined number of months. The formula varies.
Can retirement accounts be used?
They may be eligible, subject to ownership, access, age, penalty, and program discount requirements.
Can business assets be used?
Sometimes, with evidence of ownership, access, and no harm to business operations. Requirements are more detailed.
Can asset depletion be combined with other income?
Eligible recurring income may be combined with the asset calculation under some programs.
Start online
Let a licensed NonQM123 specialist review the numbers.
Final terms depend on borrower, property, documentation, program, investor, state, and underwriting requirements.