Asset-based financing · Asset depletion loans
Asset depletion loans: use your assets as income.
An asset depletion loan, also called asset utilization, converts eligible savings, brokerage and retirement balances into a monthly qualifying income. It's built for retirees and asset-rich borrowers who have significant assets but limited employment income.
- No employment or W-2 income required, typically
- Count brokerage, savings and retirement accounts
- Keep your investments, no need to liquidate
- Can combine with Social Security or pension income (varies)
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How the program works
What is an asset depletion loan?
How income is calculated
Lenders take eligible assets, subtract the down payment, closing costs and reserves, apply a percentage to non-cash assets, then divide by a set number of months.
Which assets count
Checking, savings, money market, stocks, bonds, mutual funds and retirement accounts, often at reduced percentages for retirement or volatile assets.
Who it's built for
Retirees, early retirees, people after a business sale or liquidity event, and anyone whose net worth far exceeds their documented income.
Side by side
Asset depletion loan vs. conventional financing
How the two typically compare. Guidelines vary by lender and program.
| Feature | Conventional loan | Asset depletion loan |
|---|---|---|
| Income documentation | Employment, self-employment or fixed income (pension, Social Security) | Eligible assets converted to monthly income; employment typically not required |
| Using assets as income | Limited, typically requires proof of established, continuing distributions | Assets themselves generate qualifying income via a depletion formula |
| Debt-to-income (DTI) | Calculated against agency maximums | Calculated using asset-derived income; maximums vary by lender |
| Retirement accounts | Distributions may count if established and documented to continue | Balances often counted at a percentage, no distribution history needed (varies) |
| Employment history | Typically 2 years | Typically not required |
| Combining income | Standard income sources | Asset income often combinable with Social Security, pension or wages |
| Pricing & down payment | Generally lower pricing | Typically priced higher; down payment varies by credit and loan size |
Advantages
Where an asset depletion loan can beat conventional
No job required
Qualify without W-2 or business income, typically.
Assets become income
Large balances can support a loan even with little monthly income.
Don't liquidate
Assets are used to calculate income; you typically don't have to sell them.
Retirement-friendly
No need to set up distributions just to qualify (varies by lender).
Stack income sources
Many programs combine asset income with Social Security or pensions.
Larger loan sizes
Many programs go above conforming loan limits.
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Borrower profiles
Who uses an asset depletion loan
The retiree
Lives on investments and Social Security and is buying or downsizing.
The early retiree
Left the workforce after building substantial savings or vested equity.
The post-liquidity seller
Recently sold a business or property and holds the proceeds.
The career changer
Between roles or launching a venture, with savings but no current income history.
The asset-rich, income-light buyer
Net worth is high, but documented income is modest or irregular.
The investor buyer
Using a large portfolio to qualify for a second home or investment property.
Process
From scenario to closing
Check your scenario
Tell us about your assets, goals and target property.
Calculate income
We estimate asset-based qualifying income and compare 500+ lenders.
Apply & verify
Apply online and provide recent account statements.
Close
We coordinate every step through closing.
Typical guidelines
What lenders generally look for
General ranges for illustration only. Guidelines, pricing and availability vary by lender and program and change over time.
| Depletion period | Often between 60 and 360 months, depending on the program |
|---|---|
| Asset haircuts | Retirement and non-cash assets are often counted at a reduced percentage |
| Seasoning | Assets typically need to be documented for a period, often a few months |
| Down payment | Commonly starting around 10%–30%, varies by credit and loan size |
| Credit score | Many programs start in the 600s to 700s |
| Combining income | Some programs allow asset income plus Social Security, pension or wages |
Not a commitment to lend. All financing is subject to borrower and property eligibility, lender approval, program availability and applicable licensing.
FAQ
Asset depletion loan FAQs
What is an asset depletion loan?
An asset depletion (or asset utilization) loan calculates qualifying income from your liquid and investment assets rather than from employment or business income.
How is it different from a conventional loan?
Conventional loans typically count assets as income only through established, documented distributions. Asset depletion loans typically convert eligible balances into income via a formula, without needing employment. They are typically priced higher.
How is income calculated from assets?
Lenders generally subtract the down payment, closing costs and reserves from eligible assets, apply a percentage to non-cash assets, and divide by a set number of months. Methods vary by lender and program.
Do I have to sell my investments?
No. Your assets are used to calculate qualifying income. You typically only need liquid funds for the down payment, closing costs and reserves.
Can I use retirement accounts?
Many programs count IRAs, 401(k)s and similar accounts, often at a reduced percentage. Requirements vary by lender.
Is this the same as a reverse mortgage?
No. An asset depletion loan is a traditional mortgage with monthly payments. Borrowers 62 or older may also want to compare a reverse for purchase loan.
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