Asset depletion
Converts eligible assets into a qualifying monthly income figure. That figure is considered with the mortgage payment, other debts, and the rest of the application.
Texas mortgage options · Adam Styer
Qualify for a Mortgage Using Your Assets
Asset depletion lets you qualify for a Texas mortgage on savings and investments instead of a paycheck. Eligible assets are divided by 36, 60 or 84 months to create qualifying income, with loans up to $3 million and minimum credit of 640 to 700.
Asset depletion at a glance
- Qualifies on
- Assets ÷ 36, 60 or 84 months
- Minimum credit
- 640 to 700
- Max loan-to-value
- 80% to 85%, primary residence
- Loan size
- Up to $3M
- Assets counted
- Cash 100% · securities 80–90%
- Retirement accounts
- 70% before 59½ · 80–90% after
Figures reflect programs Adam currently places. Your terms depend on the full file.
Could your assets help you qualify?
Asset depletion converts what you own into monthly qualifying income. Depending on the program, eligible assets are divided by 36, 60 or 84 months; the programs I use most divide by 60 or 84, and one uses 36 when your other income already carries most of the payment. Cash counts at 100%. Stocks, bonds and mutual funds count at 80% to 90%. Retirement accounts count at 70%, or 80% to 90% once you are past 59½ and can access the funds. Required closing funds and reserves come off the top before the division. Accounts need 4 to 6 months of history, and business assets do not count. Minimum credit runs 640 to 700, maximum loan-to-value 80% to 85% on a primary residence, and loan amounts reach $3 million. Some programs let asset income supplement wages or rent; others require assets to be the only income source. I match the program to your income mix before I run a single calculation.
From a real file
On a $3 million purchase at 90% loan-to-value, qualified entirely on assets, one investor offered the same borrower two structures. The first had a lower rate and required 12 months of the full housing payment in reserves after closing. The second had a higher rate and required 6. A borrower who wants to keep liquidity in the business takes the second and pays for it in rate; a borrower with the cash parked takes the first. That trade, rate against reserves, is the lever I work on nearly every asset file, and it never appears on a published matrix.
The divisor question is the same kind of choice: a 60-month program produces 40% more monthly income from the same balance than an 84-month program, but it usually comes with a lower loan cap and a higher minimum score. Neither is better. One fits your file.
Three closed files on this site show the range: the oil-and-gas royalty borrower declined by two banks on income continuance and closed on assets; the former CFO on sabbatical with no W-2 at all; and the veteran between jobs whose Roth IRA counted under 59½ and produced roughly $28,500 a month of calculated income alongside military pay.
- You’re retired and your portfolio is stronger than your pension or Social Security income.
- You sold a business and have substantial proceeds, but no regular paycheck.
- You’ve stepped away from work and want to buy your next home.
- You have income, but need another qualifying source to support the proposed payment.
You may not need to sell or move your entire portfolio. We first separate the assets that can support qualification from money needed for the down payment, closing costs, and reserves.
What is an asset depletion mortgage?
The lender determines which assets are eligible, makes the required adjustments, and divides the remaining amount by the number of months specified for that program. The result is a monthly income figure used in underwriting.
Other asset-based approaches
Asset utilization or assets-as-a-basis-for-repayment programs may measure assets against the loan and required obligations instead. Lenders use different names, so compare the actual calculation.
Pledged-asset financing
Uses investments as collateral. This is a different arrangement from using account balances to document qualifying income and can place restrictions on the pledged assets.
I’m based in Austin and work with borrowers across Texas. I’ll compare a suitable conventional option when it fits, along with Non-QM options that use different asset qualification rules.
How does the calculation work?
Suppose the selected lender accepts $1.2 million in net eligible assets after subtracting funds needed for the down payment, closing costs, required reserves, and any applicable penalties, discounts, or other deductions.
An illustration of qualifying income
$1,200,000 ÷ 60 months = $20,000 per month
This assumes a lender program using a 60-month divisor. It illustrates income for qualification, not a required monthly withdrawal.
The program determines both the eligible asset pool and the calculation period. A different lender can reach a different result from the same account statements. The result alone does not establish a loan amount or approval; the full housing payment, other debts, credit, property, and remaining funds still need review.
Explore an illustrative asset-income calculation →
Calculator assumptions are for planning. Confirm the eligible balances, deductions, and calculation method for the program being considered.
Do I have to sell or move my investments?
Not automatically. Calculating income from assets does not itself require monthly withdrawals or a pledge of the portfolio. A particular offer may have liquidation, transfer, or account requirements, so confirm those before moving money.
You still need accessible funds for the transaction. Keeping investments in place for qualification is a separate question from funding the down payment and closing costs. Required reserves also need to remain available under the lender’s rules.
If selling investments or taking retirement distributions would affect your tax or investment plan, involve your CPA or financial advisor before making that decision.
What affects whether this is a good fit?
The accounts you own
Cash, brokerage holdings, and eligible retirement accounts are starting points for review. Ownership, liquidity, pledged balances, and withdrawal restrictions affect what can count.
Money left after closing
Set aside the down payment, closing costs, and required reserves. The lender may also adjust account values. A statement balance is not automatically the qualifying balance.
The payment and other debts
Review the proposed mortgage, taxes, insurance, applicable dues, and other obligations together. Strong assets do not replace the rest of the loan review.
Costs and alternatives
Compare the rate, lender fees, down payment, and documentation with options based on your existing income. Greater documentation flexibility is useful only if the overall terms fit your goal.
If a business sale, equity compensation, trust ownership, or private-bank offer adds complexity, see mortgage strategy for complex income and assets. If business deposits are the stronger qualifying source, review how bank statement loans work.
Questions about qualifying with assets
Do I have to sell my investments?
Not necessarily. Asset depletion uses eligible account balances to calculate qualifying income; it does not automatically require selling the portfolio or taking monthly withdrawals. You still need accessible funds for your down payment and closing costs. I’ll confirm any liquidation, transfer, or pledge requirements for the selected option before you move money.
Can I qualify before age 62?
Yes. Age is not a requirement for the asset programs I place. What age changes is the retirement-account haircut: under 59½ those accounts count at 70%; at 59½ and above, 80% to 90%, because the funds are accessible without penalty.
Can I use retirement accounts?
Yes, at 70% of the balance under 59½ and 80% to 90% once you are past 59½, on the programs I use. The account must be vested and in your name, seasoned 4 to 6 months, and any balance already producing income you are also using to qualify cannot be counted twice.
How much do I need for a down payment?
15% to 20% on a primary residence: the asset programs I place cap at 80% to 85% loan-to-value, with the higher cap requiring 640-plus credit and a maximum 50% debt-to-income after the asset income is added. Cash-out is capped lower, at 75%, and two programs allow no cash-out at all on asset-qualified files. Your down payment, closing costs and required reserves are deducted before the remaining assets are divided into income.
Can asset depletion supplement my existing income?
On some programs yes, on others no, and the answer decides which one you get. Two programs I place treat asset income as supplemental to wages, self-employment or rental income and divide by 36 or 60. Two others require assets to be the primary or only source and disallow employment income alongside it. The asset balance and the income it already produces are never both counted.
How do conventional asset-based options compare?
Conventional options also exist. Fannie Mae’s employment-related-asset method divides net eligible assets by the loan’s amortization term in months. Its eligible asset pool is narrower than a general investment portfolio. Freddie Mac has its own eligible-asset and calculation rules. A shorter or longer divisor alone does not tell you which loan fits.
I’ll compare the account eligibility, deductions, payment, and loan terms together. For the agency rules, see Fannie Mae’s employment-related asset guidance and Freddie Mac’s assets-as-a-basis-for-repayment guidance.
Let’s take a first look
Start with your property goal, approximate account types and balances, other income, and timing. Estimates are enough for a first conversation. Use the note field for your broad asset mix; leave out account numbers and financial documents.
I’ll review the possible paths and explain what documentation is needed next. When statements are needed, we’ll arrange a secure way to share them. You can also book a call.
See My Options
Estimates are fine. Leave unknown figures blank. Only fields marked * are required.
This short review is not a loan application, pre-approval, or commitment to lend. Privacy
Local planning for your Texas property
Planning a purchase using eligible assets? Pair this statewide program guide with the property-cost checklists for Dallas and San Antonio.