Your assets can work as your income

What Is an Asset Depletion Loan?

An asset depletion loan, sometimes called an asset dissipation or asset utilization mortgage, lets you qualify for a home loan based on your savings and investments rather than a traditional income stream. Instead of requiring W-2s, pay stubs, or tax returns, lenders convert your eligible assets into a calculated monthly income figure and use that to determine what you qualify for.

You don’t have to sell or liquidate anything. Your assets stay exactly where they are and the lender simply uses a formula to recognize that significant savings translate into a clear ability to repay a loan.

Who It’s For

• Retirees living off savings, investments, or retirement accounts
• High-net-worth individuals with low taxable income
• Business owners who have recently sold a business
• Self-employed borrowers with significant assets and aggressive tax deductions
• Investors with substantial portfolios but limited traditional employment income

Key Benefits

• No W-2s, tax returns, or employment verification required
• Your savings, investments, and retirement accounts can qualify as income
• No need to liquidate assets — the formula works on paper
• Available for primary residences, second homes, and investment properties
• Loan amounts up to $3 million or more depending on the program
• A powerful option for retirees and high-net-worth borrowers

How Income Is Calculated

This is the key to understanding how asset depletion loans work. Lenders take your total eligible assets, subtract any funds needed for closing costs and reserves, and divide by a set number of months to arrive at a monthly qualifying income figure.

Basic formula: (Total Eligible Assets − Closing Costs) ÷ Loan Term in Months = Monthly Qualifying Income

Example: $1,000,000 in eligible assets − $50,000 in closing costs = $950,000. With a non-QM divisor as short as 60 months, that’s $15,833/month qualifying income. The same asset pool under a typical agency program (180-month divisor) would only produce about $5,278/month which is a difference that can be the deciding factor in what you qualify for.

The depletion period varies by program — and this is where non-QM options really stand apart from agency guidelines. In the non-QM world, where New Story Lending has the most flexibility, divisors can be as short as 60 months. Agency-backed programs are far more restrictive: Fannie Mae (FNMA) currently uses a 360-month divisor, and Freddie Mac (FHLMC) recently lowered its divisor from 240 to 180 months that is still well above what non-QM allows. A shorter depletion period means more of your assets convert into qualifying income each month, which is exactly why non-QM asset depletion programs can qualify borrowers that agency guidelines can’t.

Important note on retirement accounts: Under agency guidelines, IRAs, 401(k)s, and similar accounts are typically discounted 30–40% before the calculation to account for taxes and early withdrawal penalties. Non-QM programs are often more generous and rather than applying that discount, they simply subtract closing costs and reserves, then use the full remainder for depletion. Liquid assets like checking, savings, and brokerage accounts are generally used at full value either way.

How to Qualify

Credit Score: As low as 600, depending on the program.

Eligible Assets: Most programs require a minimum of $500,000–$1,000,000 in qualifying assets.

Loan-to-Value: Up to 85% LTV, meaning a down payment as low as 15% may be possible.

Debt-to-Income Ratio: Up to 50%, based on the calculated asset income.

No-Doc Option: Available for borrowers who are not employed and rely fully on their assets to qualify.

Eligible Asset Types:

• Checking and savings accounts
• Brokerage and investment accounts
• Retirement accounts (IRA, 401k — discounted 30–40%)
• Proceeds from a recent business or property sale
• Stocks, bonds, and mutual funds

How the Process Works

1. Connect with a Loan Officer Share your asset picture – account types, balances, and what you’re looking to buy. We’ll run the numbers and let you know what you qualify for before you go further.

2. Document Your Assets Provide recent statements for all qualifying accounts. We’ll apply the depletion formula and structure the loan around your financial situation.

3. Close on Your Home Once approved, we walk you through appraisal, underwriting, and closing without any requirement to touch your assets.

Why New Story Lending

We’re an independent mortgage bank in Upstate South Carolina with hands-on experience in non-QM lending. Asset depletion loans require a lender who understands how to structure them correctly and we work with these programs regularly.

Whether you’re a retiree ready to downsize or upgrade, an investor looking to purchase a second home, or a business owner who recently had a liquidity event, we’ll take the time to understand your situation and find the right loan structure. Our team is bilingual (English and Spanish) and always available to answer questions along the way.

Frequently Asked Questions

What is an asset depletion loan? A mortgage that converts your savings and investments into a calculated monthly income figure, allowing you to qualify without traditional employment income or pay stubs.

Do I have to sell my investments to qualify? No. You don’t need to liquidate anything. The lender uses a formula to determine qualifying income based on your asset balances and your money stays where it is.

What types of assets count? Checking and savings accounts, brokerage and investment accounts, retirement accounts (discounted 30–40%), and proceeds from business or property sales are commonly accepted. Equity in a primary residence typically does not count.

What credit score do I need? Asset depletion programs can go as low as a 600 credit score depending on the program, making this option accessible to a wider range of borrowers than some other non-QM products.

How much do I need in assets to qualify? Most programs require at least $500,000–$1,000,000 in eligible assets. The amount you need depends on the loan size and your other debts.

Are rates higher than conventional mortgages? Yes, typically 0.50–1.50% higher than conventional mortgage rates, reflecting the flexibility in income documentation.

Can I combine asset depletion income with other income? Yes. If you have Social Security, pension income, rental income, or other sources, those can often be combined with your asset depletion calculation to strengthen your qualifying income.

Have more questions? Contact us — our loan officers are happy to walk you through your options.