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If you’re rich on paper but light on income, qualifying for a traditional mortgage can be frustrating. That’s where asset depletion loans come in.
This unique financing solution helps investors qualify for a loan based on their liquid assets—not their W-2 income, tax returns, or cash flow from a job.
It’s a powerful tool for retirees, business owners, self-employed professionals, and anyone who has significant cash, stocks, or retirement savings but doesn’t show high reportable income.
Let’s break down how asset depletion loans work, who they’re for, and how real estate investors can use them to buy or refinance properties without income hurdles.
An asset depletion loan—also called an asset-based mortgage—allows borrowers to qualify for real estate financing using the value of their liquid assets instead of traditional income.
The lender calculates a monthly income figure by dividing your total assets over a set amortization period—usually 120 to 360 months.
Eligible Assets ÷ Loan Term (in months) = Qualifying Monthly Income
If you have $1,200,000 in eligible assets and the lender uses a 240-month term:
This “deemed income” is then used to determine if you qualify for the loan based on standard DTI (debt-to-income) guidelines.
Asset depletion loans are ideal for borrowers who:
Lenders typically accept a mix of liquid and semi-liquid assets, such as:
Asset Type | Eligible? | Notes |
Checking and savings accounts | ✅ Yes | 100% used in most cases |
Stocks and bonds (non-retirement) | ✅ Yes | 70–80% counted due to market fluctuations |
Retirement accounts (IRA, 401k) | ✅ Yes (age limits apply) | May be discounted or require age 59.5+ |
Cash value life insurance | ✅ Possibly | Case-by-case, may need documentation |
Real estate equity | ❌ No | Not counted unless liquidated |
Business assets | ❌ No | Must be personal, not tied to business |
📌 The lender will usually require proof of asset ownership and three months of statements.
Feature | Typical Range |
Credit Score | 660–700+ |
Loan Amount | $150,000 – $5,000,000+ |
Loan Type | 30-year fixed, ARM, interest-only options |
Down Payment (LTV) | Up to 75–80% |
Prepayment Penalty | Yes (3–5 years typical for investment loans) |
Income Verification | None required—assets only |
Closing Time | 3–4 weeks (faster with private lenders) |
Use brokerage or retirement funds to qualify—even if you don’t earn monthly income.
Transition from a hard money loan or short-term bridge into a fixed-rate mortgage using asset income.
Use your nest egg to finance your next home without drawing from it directly.
Use asset depletion to qualify personally while holding property under an entity.
Feature | Asset Depletion Loan | DSCR Loan |
Income Requirement | Based on personal assets | Based on property cash flow |
Property Use | Owner-occupied or investment | Investment property only |
Entity Ownership | Allowed, varies by lender | LLCs and entities preferred |
Documents Needed | Asset statements | Leases, rent rolls, appraisal |
Best For | Retirees, liquid investors | BRRRR, STRs, scaling landlords |
Some investors even use both: asset depletion for personal purchases, DSCR for rental property growth.
Investor Profile: Susan, a retired executive, has $2.5M in a brokerage account but only $20K in annual taxable income from dividends.
Susan closes in 3 weeks using an asset depletion loan—and never touches her investment principal.
If you’re asset-rich but income-light, asset depletion loans give you access to real estate financing on your terms.
Whether you’re buying a high-end rental, refinancing into a long-term loan, or transitioning into retirement, this loan strategy lets you use your balance sheet—not your tax return—to qualify.Smart investors know: it’s not just about what you earn—it’s about what you control.
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.