Loan Products · June 22, 2025
Asset Depletion Loans: Qualifying on Wealth Instead of Income
Retired borrowers and high-net-worth individuals with assets but limited income can qualify for mortgages through asset depletion — here is how it works.
Some of the most creditworthy borrowers face mortgage qualification challenges because their income on paper is low — even when they have significant wealth. Asset depletion loans solve this problem.
Who Asset Depletion Serves
Retired individuals living on savings and investments (limited Social Security and pension income). High-net-worth individuals who have sold a business and are transitioning. People with significant investment portfolios but limited W-2 income. Trust beneficiaries with substantial assets but modest monthly distributions.
How Asset Depletion Works
The lender calculates a monthly income figure from your liquid assets:
Eligible Assets divided by Loan Term in Months = Monthly Qualifying Income.
Example: $1,800,000 in liquid assets (checking, savings, stocks, bonds, retirement accounts at reduced percentage) divided by 360 months = $5,000/month qualifying income.
This calculated income is then used for DTI qualification alongside any actual income you receive.
What Assets Count
Most lenders accept: checking and savings accounts (100%), stocks and bonds (70-100%), retirement accounts (60-70% for borrowers under 59.5% to account for early withdrawal penalties, 70-100% for those over 59.5%).
Assets that do NOT count: home equity, business equity, restricted stock, non-liquid assets.
Down Payment Requirements
Asset depletion programs typically require 20-30% down and credit scores of 700+. Reserves requirements are often significant — 12-24 months PITI after closing.
Program Availability
Not all lenders offer asset depletion programs. HMS works with multiple lenders who specialize in this qualification method. Call 309-222-8286.