If you’re a self-employed investor, retired, or using creative tax strategies, getting approved for a traditional mortgage can be a challenge—even if you have solid cash flow or strong assets.
That’s where non-QM loans like asset depletion loans and bank statement loans come into play.
These alternative loan types were built for real estate investors who need flexible underwriting based on real-world financials, not outdated guidelines like W-2s or tax returns.
In this guide, we’ll break down the difference between asset depletion and bank statement loans, so you can choose the right one for your next purchase, refinance, or cash-out strategy.
What Is an Asset Depletion Loan?
An asset depletion loan lets you qualify based on your liquid assets—like cash, stocks, or retirement savings—instead of income.
The lender uses your asset balance to calculate a deemed monthly income, which is then used to assess whether you qualify.
🧮 Example:
$1,200,000 in liquid assets ÷ 240 months = $5,000/month “income”
This monthly income is used just like a salary to calculate DTI (debt-to-income).
What Is a Bank Statement Loan?
A bank statement loan qualifies borrowers based on monthly deposits into a personal or business account—usually over the past 12 to 24 months.
Instead of W-2s or tax returns, the lender averages your deposits to determine your monthly income.
🧮 Example:
$240,000 in deposits over 12 months = $20,000/month
Lender uses 50% of that = $10,000/month “qualifying income”
This income is then used in the DTI calculation just like traditional earnings.
Side-by-Side Comparison
| Feature | Asset Depletion Loan | Bank Statement Loan |
| Qualifying Basis | Liquid assets | Bank deposits |
| Ideal Borrower | Retired, high-net-worth investors | Self-employed or 1099 earners |
| Income Documents Required | None | 12–24 months of bank statements |
| Asset Type Needed | Cash, stocks, retirement accounts | Active deposits into checking/savings |
| Minimum Seasoning | None | 12 months typical |
| Loan Use | Primary or investment properties | Primary or investment properties |
| Ownership Type Allowed | LLC (varies), individual | LLC or individual (lender-specific) |
| Loan Amounts | $150K–$5M+ | $150K–$5M+ |
| Down Payment / LTV | Up to 75–80% | Up to 85% (varies by lender) |
| Best For | Retirees, investors with large savings | Self-employed real estate investors |
When to Use an Asset Depletion Loan
Use this loan type if you:
- Are retired or semi-retired with a large nest egg
- Recently sold a business or real estate and are cash-rich
- Want to leverage assets without liquidating them
- Have limited or no recurring income but strong reserves
- Prefer long-term financing without DTI red tape
✅ You don’t need monthly income—you just need documented, seasoned assets.
When to Use a Bank Statement Loan
Use this loan type if you:
- Are self-employed, a real estate agent, freelancer, or 1099 contractor
- Deposit regular income into a business or personal bank account
- Write off expenses aggressively and show low taxable income
- Want to buy or refinance without submitting tax returns
- Need to qualify based on actual earnings activity, not AGI
✅ This loan is especially useful for LLC-based real estate investors and short-term rental hosts.
Real-World Scenarios
✅ Asset Depletion:
Investor: Brian is a 63-year-old retired executive with $2.1M in a brokerage account and minimal income.
Goal: Buy a $700K rental in Florida
Solution: Lender uses 70% of assets over 240 months = $6,125/month income
Outcome: Loan approved with no income docs or employment verification
✅ Bank Statement:
Investor: Tasha is a full-time Airbnb operator showing $300K+ in deposits but low taxable income.
Goal: Refinance her current STR and cash out $80K
Solution: Lender averages deposits at $25K/month, qualifies her at 50% = $12,500/month
Outcome: DSCR-equivalent approval with no tax returns or W-2s
Pros and Cons of Each Loan Type
✅ Asset Depletion Pros:
- No need to work or earn income
- Leverages large savings without liquidation
- Ideal for investors with passive income or asset-heavy balance sheets
❌ Asset Depletion Cons:
- Must have significant liquid or semi-liquid assets
- Some assets discounted (retirement, stocks)
- Prepayment penalties may apply for investment use
✅ Bank Statement Pros:
- Great for business owners and entrepreneurs
- Reflects real cash flow, not taxable net income
- Available for purchases, refinances, and cash-out
❌ Bank Statement Cons:
- Inconsistent deposits may affect qualification
- May require CPA letters or P&L (business accounts)
- Rates can be higher than conventional
Which Is Right for You?
| If You… | Choose… |
| Are retired or no longer working | ✅ Asset Depletion Loan |
| Deposit regular business income | ✅ Bank Statement Loan |
| Just sold a property or exited a business | ✅ Asset Depletion Loan |
| Are a full-time investor with irregular income | ✅ Bank Statement Loan |
| Want no income docs and hold $1M+ in liquid assets | ✅ Asset Depletion Loan |
| Run multiple STRs or rentals through an LLC | ✅ Bank Statement Loan |
Final Thoughts
Both asset depletion loans and bank statement loans are designed to help real estate investors qualify for financing without relying on traditional income verification.
- Choose asset depletion when you have wealth but limited income
- Choose bank statement loans when you have cash flow but tax complexity
Either option gives you the flexibility to fund new acquisitions, refinance into long-term debt, or pull out equity—on your own terms.
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
