Asset Depletion Mortgage Guide: Qualifying a Borrower on Assets Alone

Some borrowers have everything except a paystub. Asset depletion is how you close them.

What Is an Asset Depletion Mortgage?

An asset depletion mortgage (also marketed as asset utilization, asset dissipation, or asset-based qualifying) converts a borrower's eligible liquid assets into a hypothetical monthly income stream. Underwriting treats that number the same way it treats wages: it goes on the top line of the debt-to-income calculation. Nothing is pledged, nothing is liquidated, and the borrower keeps the account. The assets simply have to exist, be verifiable, and be accessible.

This is a Non-QM product. There is no employment requirement, no tax returns, and no 4506-C in most programs. What replaces them is two to three months of complete account statements and a clean arithmetic trail from balance to qualifying income.

Who Actually Uses It

• Retirees drawing down a portfolio who have not yet started Social Security or pension distributions.
• Self-employed borrowers post-exit — the business sold, the proceeds are in the bank, and the last two tax returns look nothing like the balance sheet.
• High-net-worth borrowers with aggressive write-offs whose Schedule C nets out near zero on paper.
• Trust and inheritance beneficiaries with large balances and no W2 history.
• Investors pairing depletion income with rental cash flow when a DSCR-only structure doesn't fit the property.

The Math: How Asset Depletion Income Is Calculated

Every program follows the same three steps. Only the haircuts and the divisor change.

1. Total the eligible assets. Start with verified balances across qualifying accounts.
2. Apply the haircut. Cash usually counts at 100%. Publicly traded securities are discounted for volatility. Retirement accounts are discounted again for access risk.
3. Divide by the amortization term. 60, 84, or 120 months are the common divisors. A shorter divisor produces more income but is offered on fewer programs.

Typical haircuts

What Underwriting Will Ask For

• Two to three months of complete statements — every page, including the intentionally blank ones.
• Letters of explanation and sourcing for any deposit outside the normal pattern.
• Proof of penalty-free access for retirement accounts (age, plan terms, or separation from service).
• Evidence the account is in the borrower's name; a co-owner typically requires an access letter.
• Reserves on top of the depleted balance — usually 6–12 months of PITIA.

Asset Depletion vs. Bank Statement vs. DSCR

Pick the doc type that matches where the borrower's strength actually lives. Bank statement programs work when a business generates real deposits. DSCR works when the property carries itself. Asset depletion works when the balance sheet — not the income statement and not the subject property — is the story. When two of the three apply, price all of them; the qualifying income and the LTV cap rarely peak on the same product.

Frequently Asked Questions

What is an asset depletion mortgage?

An asset depletion mortgage — also called asset utilization or asset dissipation — qualifies a borrower by converting eligible liquid assets into a monthly income stream instead of using employment income. No job, paystubs, or tax returns are required when the assets carry the file.

How is asset depletion income calculated?

Take the eligible asset balance, apply the program haircut (typically 100% of cash, 70–80% of stocks and bonds, and 70% of retirement accounts for borrowers with penalty-free access), then divide the total by the program's amortization term — commonly 60, 84, or 120 months. The result is the qualifying monthly income.

Which assets qualify for asset depletion?

Checking and savings, money market accounts, CDs, publicly traded stocks and bonds, mutual funds, and vested retirement accounts. Business accounts, restricted stock, crypto, and any funds being used for the down payment or reserves are generally excluded or discounted.

Do you have to be retired to use asset depletion?

No. Retirees are the most common use case, but self-employed borrowers between exits, high-net-worth borrowers with low reported income, and trust beneficiaries all use asset depletion. Employment income can also be blended with depletion income on most programs.

What credit score and down payment does asset depletion require?

Most wholesale asset depletion programs start around a 680 FICO with 20–25% down, with better pricing and higher LTVs available at 720+. Reserves are typically required in addition to the assets being depleted.

How long do the assets have to be seasoned?

Two to three months of statements is the standard, and large deposits must be sourced. Assets must be liquid, in the borrower's name (or jointly), and available without a withdrawal restriction that would defeat the depletion math.