Some borrowers have very little reportable income and a great deal of money: a retiree living off savings, someone recently sold a business, an investor holding substantial liquid assets that are not generating a paycheck. An asset depletion mortgage qualifies these borrowers by treating their assets themselves as the income source.
What it is
A non-QM product that converts a borrower’s eligible liquid assets into an imputed monthly income figure for qualification purposes, rather than relying on wages, self-employment income, or rental income.
Who qualifies
Retirees, borrowers with substantial investment or savings balances, and anyone whose net worth and liquidity are strong relative to their reported income — a profile that a conventional debt-to-income calculation, built around earned income, tends to understate badly.
How income is calculated
Eligible liquid assets — typically bank, brokerage, and (often at a reduced weighting) retirement account balances — are totaled and then divided by a lender-set divisor, commonly expressed as a number of months, to produce a monthly imputed income figure used in qualification. The specific eligible asset types, any discount applied to retirement funds, and the divisor used all vary by lender.
How it differs from a DSCR loan
Both are non-QM products that avoid conventional income documentation, but for different reasons and by different mechanisms. An asset depletion mortgage substitutes the borrower’s balance sheet for their income statement. A DSCR loan substitutes the subject property’s own rent for the borrower’s income entirely — no borrower assets or income are part of the qualification math at all.
A borrower can be a candidate for both
An asset-rich retiree buying a rental property could potentially qualify either through asset depletion (using their own balance sheet) or through a DSCR loan (using the property’s rent), depending on which produces the stronger qualifying number and which structure the borrower prefers.
Related reading
- How DSCR loans work — the property-based alternative to every borrower-income product on this page
- The lender directory — non-QM and DSCR lenders side by side, with terms where published
- All non-QM products
Asset Depletion Mortgage FAQ
Typically bank and brokerage account balances, with retirement accounts often counted at a reduced value. Eligible asset types and any discounts vary by lender.
It can be combined with any income the borrower does have, or used entirely on its own where reported income is minimal. Policy varies by lender.
No. Asset depletion converts the borrower’s own assets into imputed income. A DSCR loan qualifies the property’s rent instead and does not consider the borrower’s asset balances for qualification.
Retirees and other asset-rich, income-light borrowers most commonly, since a conventional income-based calculation would understate their actual capacity to pay.
Policies differ by lender on whether and how retirement funds are counted before an owner can access them without penalty. Confirm directly with the lender.
This page is general educational information about a category of non-QM loan product, not an offer of credit or a description of any specific lender's guidelines. Eligibility, documentation requirements and pricing vary by lender and change over time — confirm current requirements directly with a lender before relying on any specifics here.