Asset Depletion Loan Calculator
Estimate your qualifying monthly income from assets — no W-2 or pay stub required
| Asset Category | Gross Value | Discount | Eligible Amount |
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In over fifteen years of working with mortgage underwriters, financial planners, and high-net-worth borrowers, I have watched the same scenario play out hundreds of times: a retired executive with $2.5M in investable assets gets turned down for a $600,000 mortgage because their W-2 income was zero. Their wealth was undeniable. Their ability to repay the loan was mathematically beyond question. Yet conventional underwriting — built around paycheck-based income verification — left them locked out.
That is the exact problem the asset depletion loan was designed to solve. And our asset depletion loan calculator above is designed to give you an immediate, accurate picture of your qualifying position before you ever sit across from a loan officer. Whether you are a retiree living on portfolio income, a self-employed entrepreneur with irregular earnings, or an investor whose wealth is concentrated in assets rather than salary, understanding this mortgage product could change everything about your home financing options.
What Is an Asset Depletion Loan?
An asset depletion loan — also known as an asset dissipation mortgage, asset utilization loan, or asset amortization mortgage — is a non-QM (non-qualified mortgage) product that allows lenders to calculate a borrower’s qualifying income by mathematically spreading their eligible liquid assets across the loan term. The underlying premise is straightforward: if you have enough assets to theoretically repay the entire loan even if you earned nothing, you have demonstrated creditworthiness regardless of your monthly income on paper.
The basic formula is deceptively simple: Total Eligible Assets ÷ Loan Term in Months = Monthly Qualifying Income. A borrower with $1,800,000 in eligible assets applying for a 30-year loan would be credited with $5,000/month in qualifying income — even with zero employment income. That figure is then used in the standard debt-to-income (DTI) calculation that governs mortgage approval.
✅ Who This Loan Is For
- Retirees with pension/portfolio income but no W-2
- High-net-worth individuals between jobs
- Self-employed borrowers with complex tax returns
- Entrepreneurs who defer personal income for business growth
- Investors whose income is primarily capital gains
- Foreign nationals with US-held assets
❌ Who This Loan Is Not For
- Borrowers with all assets in illiquid real estate equity
- Borrowers without documented asset ownership
- Those with assets solely in business accounts
- Individuals with credit scores below 620
- Borrowers seeking FHA or VA loans (asset depletion is non-QM only)
How Asset Depletion Mortgage Qualification Actually Works
The mechanics of the asset depletion calculation look clean on paper, but lenders apply several layers of nuance that can significantly affect your qualifying income figure. Here is how every major lender — from Fannie Mae’s expanded guidelines to non-QM portfolio lenders — actually runs the numbers.
Step 1: Asset Identification and Documentation
Not every dollar you own qualifies. Lenders require that assets be liquid or near-liquid — meaning you can access them within a reasonable timeframe without incurring prohibitive penalties. Most lenders will require two months of consecutive asset statements for all accounts. Documentation must be dated within 60–90 days of your loan application.
Step 2: Asset Discounting
Lenders apply haircuts (discounts) to different asset types to account for market volatility and liquidity risk. These discounts are a critical feature that our asset depletion loan calculator applies automatically:
| Asset Type | Eligible % | Notes |
|---|---|---|
| Checking & Savings Accounts | 100% | Most liquid; no discount applied |
| Money Market Accounts | 100% | Insured, liquid; full value used |
| Certificates of Deposit | 100% | If within 60 days of maturity or penalty-free |
| Stocks, ETFs, Mutual Funds | 70% | Market volatility buffer |
| Bonds (non-government) | 70% | Same as equities for most lenders |
| U.S. Government Bonds / T-Bills | 100% | Some lenders allow full value |
| Retirement (IRA/401k) — Under 59½ | 60% | Early withdrawal penalty factored in |
| Retirement (IRA/401k) — Age 59½+ | 70% | No early withdrawal penalty applicable |
| Vested RSUs / Stock Options | 70% | Must be fully vested at time of application |
| Business Accounts | 0–50% | Lender discretion; typically excluded |
| Real Estate Equity | 0% | Not liquid; excluded from calculation |
Step 3: Deducting Down Payment and Reserves
Before dividing your eligible assets by the loan term, lenders subtract the required down payment, closing costs, and mandatory post-closing reserves. Reserves are typically 2 to 6 months of your total monthly housing payment (principal, interest, taxes, insurance — also called PITI). This ensures that the borrower retains a genuine financial cushion after closing.
Step 4: Division by Loan Term
The remaining eligible assets are divided by the number of months in the loan term. A 30-year loan uses 360 months; a 15-year loan uses 180 months. Shorter terms produce higher monthly qualifying income figures, which can be a strategic lever for borrowers with sufficient assets.
Step 5: Combined Income and DTI Test
The computed monthly asset depletion income is added to any other qualifying income the borrower has (Social Security, rental income, dividends, pension distributions, part-time wages). The combined figure is then tested against the DTI limit — typically 43% for most non-QM programs, though some portfolio lenders allow up to 50% with compensating factors such as high credit scores or substantial reserves.
How to Use the Asset Depletion Loan Calculator
The calculator at the top of this page has two tabs. The Your Assets tab calculates your qualifying monthly income from your asset portfolio. The Loan Details tab helps you determine whether that qualifying income is sufficient for your target loan amount. Here is how to use both effectively:
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Gather your current asset statements. You need recent balances for all liquid accounts: checking, savings, brokerage accounts, money market funds, CDs, and retirement accounts (IRA, 401k, Roth IRA, SEP-IRA). Do not estimate — use actual statement balances dated within the past 60 days.
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Enter each asset category in the correct field. The calculator automatically applies the correct discount rate to each category. Checking and savings accounts are used at full value. Stocks and bonds are discounted to 70%. Retirement accounts are discounted based on the age you enter — 60% if you are under 59½, 70% if you are at or above that age.
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Enter your down payment and closing cost estimates. These are subtracted from total eligible assets before division. If you are purchasing a $750,000 home and putting 20% down, enter $150,000 plus estimated closing costs of approximately $9,000–$15,000.
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Enter required reserves. A common rule is 3–6 months of your projected monthly mortgage payment. For a $3,500/month payment, enter $10,500–$21,000. If you are unsure, use 4 months as a starting estimate.
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Click “Calculate Qualifying Income” to see your total eligible assets, monthly qualifying income, and a full breakdown by asset type. This figure is what your lender will use in the DTI calculation.
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Switch to the Loan Details tab and enter your target loan amount, interest rate, loan term, target DTI, and existing monthly debt payments. The calculator will tell you your estimated monthly payment, the qualifying income required, and the minimum asset base needed — giving you a complete picture of your eligibility.
Real-World Example: Asset Depletion Loan Calculation
Let me walk through a composite example based on real borrower profiles I have encountered — specifically a recently retired couple in their mid-60s purchasing a $1.1M vacation property with no current employment income.
Added to Robert’s Social Security income of $2,400/month and Patricia’s pension of $1,200/month, their total combined qualifying income reached $7,478/month. Their estimated PITI payment on the $825,000 loan was approximately $5,900/month at 7.25%, producing a front-end DTI of 79% — but the lender used back-end DTI (total debts / income) which came to 41% after accounting for no other debt obligations. The loan was approved.
How Asset Type Affects Qualifying Income: A Visual Comparison
The following chart shows how $500,000 in each asset category translates into monthly qualifying income over a standard 30-year term, after applying the appropriate discount rate. The differences are significant and illustrate why asset allocation matters when planning for an asset depletion mortgage.
Lender Requirements for Asset Depletion Loans
Asset depletion loans are predominantly offered by non-QM lenders, portfolio lenders, and some major banks with expanded underwriting guidelines (including certain Fannie Mae programs). Requirements vary significantly by lender, but the following represents a reasonable composite of what the market demands:
| Requirement | Standard Program | Jumbo Program |
|---|---|---|
| Minimum Credit Score | 620 | 720+ |
| Maximum LTV | 80% | 75% |
| Maximum DTI | 43–45% | 43% |
| Minimum Asset Portfolio | $250,000+ | $1M+ |
| Post-Closing Reserves | 3–6 months PITI | 12+ months PITI |
| Asset Statement History | 2 months | 3–6 months |
| Loan Amount | Up to conforming limit | $1M–$10M+ |
| Property Types | Primary, Second Home | Investment allowed (some lenders) |
Fannie Mae Asset Depletion Guidelines vs. Non-QM Lenders
One important distinction that surprises many borrowers: Fannie Mae’s Selling Guide (B3-4.3-04) actually contains provisions for asset depletion income documentation, meaning some conventional loan programs can accommodate this methodology under specific conditions. However, Fannie Mae’s guidelines are considerably more restrictive than what most non-QM portfolio lenders offer.
Under Fannie Mae guidelines, eligible assets must be divided by 360 months regardless of the actual loan term, and only certain asset types qualify. Portfolio and non-QM lenders, by contrast, can divide by the actual loan term (meaning a 15-year loan generates higher qualifying income), allow broader asset categories, and apply more flexible DTI thresholds. For most borrowers whose primary qualification vehicle is asset depletion, non-QM portfolio lenders represent the more practical and powerful option.
The landscape of non-QM lenders has grown substantially since 2018. Institutions like Newrez, Angel Oak Mortgage, Acra Lending, A&D Mortgage, and Luxury Mortgage all offer dedicated asset depletion programs. Comparing their specific guidelines is worth the time investment — rate differences of even 0.25% on a $1M loan represent significant long-term costs. Resources like the cloud-based Vorici calculator exemplify how digital tools eliminate manual calculation errors in complex multi-variable decisions — the same principle applies when comparing loan options with our asset depletion calculator.
Strategic Tips to Maximize Your Qualifying Asset Base
Based on years of helping clients structure their asset presentations for maximum qualification power, these are the strategies I consistently recommend:
- Rebalance toward liquid assets before applying. In the 60–90 days before your application, consider shifting funds from stocks (70% credit) into money market or savings accounts (100% credit). Even a partial reallocation of $200,000 from equities to cash adds an additional $16,667 in eligible assets.
- Time retirement withdrawals strategically. If you are close to 59½, waiting until that birthday before applying unlocks a 70% instead of 60% credit on retirement accounts — a meaningful difference on large IRA balances.
- Consolidate accounts for cleaner documentation. Lenders scrutinize asset statements for unusual deposits and transfers. Consolidating accounts from multiple institutions into fewer accounts 90+ days before application simplifies the paper trail and reduces underwriting questions.
- Do not spend down reserves post-preapproval. Many borrowers receive preapproval and then make large purchases before closing. This is a loan-killing mistake with asset depletion programs — the lender will verify assets again at closing, and a depleted account can void the approval.
- Consider a shorter loan term if your assets are substantial. A 20-year term produces 20% more monthly qualifying income than a 30-year term on the same asset base. If that pushes you over the approval threshold, the math may favor a 20-year structure even with slightly higher monthly payments.
- Add a co-borrower with documented income. If a spouse or partner has employment income, adding them to the application combines their traditional income with your asset depletion income, potentially producing a much stronger combined qualification profile.
Asset Depletion Loans vs. Other Non-Traditional Mortgage Options
Asset depletion is one of several alternative income documentation strategies available to non-traditional borrowers. Understanding where it sits relative to other options ensures you pursue the most advantageous path:
| Program Type | Best For | Key Advantage | Key Limitation |
|---|---|---|---|
| Asset Depletion | Retirees, high-net-worth | No income required; pure asset-based | Assets must be liquid; higher rates |
| Bank Statement Loans | Self-employed borrowers | Uses 12–24 months of bank deposits | Requires business history; income variability |
| DSCR Loans | Real estate investors | Property cash flow qualifies; no personal income | Investment properties only |
| Stated Income / SISA | High-credit investors | Minimal income documentation | Very limited availability; higher rates |
| 1099 Loans | Contractors/freelancers | Uses 1099s instead of tax returns | Requires 1–2 years of 1099 history |
Frequently Asked Questions About Asset Depletion Loans
Is an Asset Depletion Loan Right for You?
The asset depletion mortgage is not a loophole or a workaround — it is a legitimate, well-structured lending product designed to accurately reflect the creditworthiness of borrowers whose financial strength is expressed in assets rather than salary. For the right borrower profile, it can be genuinely transformative.
If you have spent decades building a substantial investment portfolio, only to find conventional mortgage underwriting blind to everything you have accumulated, the asset depletion loan closes that gap. Use the calculator at the top of this page to establish your baseline qualifying position, then use the Loan Details tab to test whether your assets can support your target loan. Take those numbers to at least three lenders. Ask explicitly about their specific discount rates and DTI thresholds — the differences between lenders can be significant.
And remember: the goal of the calculation is not to determine whether you can mathematically service the debt. Your assets have already answered that question. The goal is to present your financial position to underwriting in the language that lenders are legally and structurally required to speak.
The asset depletion loan calculator and information provided on this page are for educational and illustrative purposes only and do not constitute financial, mortgage, or legal advice. Qualifying income calculations, discount rates, and program requirements vary by lender and are subject to change. Always verify specific program guidelines with a licensed mortgage professional before making financial decisions. Past performance of investment portfolios does not guarantee future returns or mortgage qualification outcomes.