What if you have significant assets but limited income Retirees, early-retirement seekers, and wealthy individuals with passive income often face this challenge. Asset depletion loans solve it by converting your savings and investments into qualifying income.
What Is an Asset Depletion Loan?
An asset depletion loan (also called asset dissipation or asset-based lending) calculates qualifying income from your liquid assets rather than—or in addition to—your employment income. The lender determines how much monthly income your assets could theoretically produce if depleted over time.
Example:
- Liquid assets: $1,200,000
- Asset depletion factor: 360 months (30 years)
- Calculated monthly income: $3,333
That $3,333/month counts toward your qualifying income for debt-to-income calculations, even though you're not actually withdrawing it monthly.
How Asset Depletion Calculations Work
Step 1: Identify Eligible Assets
Lenders consider liquid assets that can be accessed:
- Checking and savings accounts
- Investment accounts (stocks, bonds, mutual funds)
- Retirement accounts (IRA, 401k)—often discounted 30-40% for early withdrawal penalties
- Cash value of life insurance
Real estate equity, business ownership interests, and non-liquid investments typically don't qualify.
Step 2: Apply Discount Factors
- Retirement accounts: Discounted 30-40% to account for taxes and penalties
- Investment accounts: May be reduced slightly for market volatility
- Cash accounts: Full value counts
Step 3: Divide by Depletion Term
Total eligible assets divided by the loan term (often 360 months for 30-year loans):
$1,500,000 in assets ÷ 360 months = $4,167/month qualifying income
Step 4: Combine with Other Income
Asset depletion income adds to any other documented income:
- Social Security
- Pension
- Rental income
- Part-time employment
This combined income determines your qualifying DTI.
Who Benefits from Asset Depletion Loans?
Retirees
You've saved diligently for decades, but now you're living on reduced income from Social Security and smaller retirement distributions. Asset depletion recognizes your wealth even without high monthly income.
Early Retirees / FIRE Movement
You achieved financial independence at 45 or 50, but your "retirement income" doesn't qualify for traditional mortgages. Asset depletion bridges the gap between your net worth and your monthly income.
Self-Employed with Significant Assets
Business owners who pay themselves minimal salaries but have accumulated substantial savings. Asset depletion provides an alternative to documenting complex business income. Also consider bank statement loans if you have strong cash flow.
Relocated Executives
You're between jobs or starting a new position with delayed compensation. Substantial savings demonstrate financial strength even without current employment income.
Trust Fund Beneficiaries
Inherited wealth without corresponding earned income. Asset depletion qualifies you based on your assets rather than employment.
Asset Depletion Loan Requirements
Asset Documentation
- Two months of statements for bank and investment accounts
- Retirement account statements
- Verification that assets are liquid and accessible
Large deposits require sourcing and documentation.
Credit Score
Most asset depletion programs require 680+ credit scores, with better rates at 720+. This isn't a subprime product—it's designed for affluent borrowers with non-traditional income.
Down Payment
Expect 20-30% down for most asset depletion loans. Some programs allow lower down payments with stronger overall profiles.
Reserves
After down payment and closing costs, lenders want to see substantial remaining reserves—typically 12-24 months of payments. Since your assets are your income source, having ample post-closing liquidity matters.
Asset Depletion Loan Rates
Asset depletion loans typically carry rates similar to conventional jumbo loans—0.25-0.75% higher than agency conforming rates. For 2026, expect rates in the 7-8.5% range depending on the specific program and borrower profile.
Asset Depletion Scenarios
Scenario 1: Recent Retiree — A 63-year-old retired teacher with $85,000/year Social Security and pension but $1.8 million in retirement savings. Traditional qualification limits them to a $350,000 home. Asset depletion adds $5,000/month from their IRA (after 30% discount), qualifying them for a $650,000 home.
Scenario 2: Early Retirement at 52 — A tech executive who retired at 52 with $3 million saved. No pension, can't access retirement accounts penalty-free, Social Security is years away. Asset depletion calculates $8,000/month from non-retirement assets, enabling purchase of a $750,000 home.
Scenario 3: Business Sale Proceeds — An entrepreneur sold their business for $4 million. Money is invested but they haven't started a new venture. Traditional qualification: no income. Asset depletion: $11,000/month calculated income for a $1.2 million home purchase.
Scenario 4: International Relocator — A European executive relocating to the Pacific Northwest with substantial overseas assets but no U.S. income history yet. Asset depletion qualifies based on documented liquid assets, enabling immediate home purchase. Also see foreign national loan options.
Is Asset Depletion Right for You?
Asset depletion loans make sense when:
- You have substantial liquid assets ($500,000+)
- Your monthly income doesn't reflect your financial strength
- You want to purchase a home that your income alone won't support
- You're retired, early-retired, or in a transition period
The calculation is favorable for wealth that would otherwise sit unconsidered in traditional underwriting.
If you have significant assets and want to explore how they can help you qualify for a mortgage in Washington or Idaho, let's discuss your situation. Asset depletion opens doors that income-based qualification keeps closed.
Asset depletion loans are available for qualified borrowers throughout our Pacific Northwest markets, including Spokane, Coeur d'Alene, the Tri-Cities, Yakima, and Vancouver.