Asset Depletion Loans: Turn Savings Into Qualifying Income

An asset depletion loan lets you qualify for a home loan using what you have saved and invested rather than what you earn. The underwriter verifies your eligible liquid assets, applies the program's valuation rules, and converts the result into income on paper: eligible net assets divided by the program's month count equals monthly qualifying income. It is one of several Non-QM loan programs built for borrowers whose tax returns understate their real financial strength.

To be clear, this is alternative income documentation, not a shortcut. You still complete a full application, and the underwriter still reviews your credit, your accounts, and the property before any decision. The difference is what does the qualifying: verified asset statements instead of pay stubs.

Who an Asset Depletion Loan Fits

Four borrower profiles show up again and again in our scenario reviews:

• The recently retired executive or professional. Your working years built a diversified portfolio spread across cash, brokerage accounts, and retirement accounts, but the paycheck has stopped and there is no employment income to document. Asset depletion turns the portfolio itself into your qualifying income, so retirement does not have to postpone a purchase or refinance.
• The business seller. You sold your company and the proceeds are sitting in a brokerage account waiting to be redeployed. Those funds can qualify you, but seasoning windows differ from program to program, so how recently your sale closed often determines which programs are open to you today. Timing the application well is part of the strategy.
• The high-net-worth semi-retiree. Your Social Security and pension arrive every month, but they understate what you could actually support. Many programs add asset income on top of your documented fixed income rather than replacing it, which can move a file from marginal to comfortable.
• The inheritance recipient or trust beneficiary. If you have immediate access to inherited funds, select programs will count them once they are documented and seasoned. Others exclude trust assets entirely, so program selection matters more for this profile than for any other.

If a large share of your net worth lives in accounts rather than a salary, at least one of these likely sounds familiar. The rest of this page covers how the math works and where the trade-offs sit.

How the Math Actually Works

The formula itself is short: eligible net assets divided by the program's month count equals monthly qualifying income. The work is hiding inside the word "net," and it happens in three steps.

Step 1: transaction costs come off the top. The funds you plan to use for your down payment and closing costs are subtracted before anything is counted. Only what remains after the purchase can generate qualifying income.

Step 2: valuation haircuts apply. Accounts are not all counted at face value; retirement and brokerage assets are counted at a reduced percentage of what your statement shows. Typically 100% of cash and equivalents, around 80% of stocks, bonds, and funds, and around 70% of vested retirement assets. Business, trust, and foreign assets are generally excluded; recently converted crypto requires seasoning.

Step 3: the remainder is spread over the program's month count. Eligible net assets are converted to qualifying income over roughly 60 to 120 months, program-dependent; the calculation uses assets remaining after your down payment and closing costs. A shorter window produces more monthly income from the same assets; each program pairs its window with its own guidelines, which is why the right match depends on your full scenario.

The most common surprise we see: borrowers run the math on their gross portfolio and overestimate. A portfolio that looks more than ample at first glance can produce a noticeably smaller qualifying figure once the down payment, closing costs, and valuation haircuts are applied. Run the net math before you fall in love with a property, and you will not be caught short in underwriting.

One reassurance worth repeating: you are not actually spending these assets. The calculation is a qualifying method, not a withdrawal plan. Your accounts stay yours; the lender simply documents that they exist and could support the obligation.

How to Avoid the Common Pitfalls

It helps to know in advance where files go sideways. Files most often fall short when the gross portfolio value is used instead of the net figure (after down payment, closing costs, and haircuts), when retirement assets are counted at full value, when business assets or cash-out proceeds are included, when funds lack seasoning, or when a joint account holder is not on the loan. Each of those has a straightforward fix if you handle it before you apply:

• Count only personal assets, not business assets. Funds held inside a business entity generally stay out of the calculation, even if you own the company outright. Move what you intend to use into personal accounts early, then let it season.
• Leave expected cash-out proceeds out of the math. Money you would receive from the loan itself cannot also be the asset that qualifies you for that loan. Underwriters treat this as circular reasoning, because it is.
• Put every joint account holder on the loan. If an account carries two names, programs generally want both people on the application before the full balance counts. Decide early who is borrowing, and align the accounts to match.
• Season recently received funds first. Money that just arrived, whether from a sale, an inheritance, or a transfer between accounts, usually needs to sit and be documented for the program's seasoning window before it counts. Plan your application date around it.
• Apply the haircuts before you estimate. Discount your retirement and brokerage balances per the program's valuation rules, subtract your down payment and closing costs, and only then divide. The estimate you bring to a lender should already be the net number.

Bring recent statements for every account you want counted and we can pressure-test the file before it ever reaches an underwriter.

The Honest Trade-offs vs. a Conventional Loan

Asset depletion is a tool, not an upgrade, and it is not the right tool for everyone. Compared with a conventional loan, expect:

• Pricing that is typically higher. Non-QM programs price for the flexibility they offer. If you can document income the conventional way, that route usually wins on cost.
• Substantially higher reserve requirements. Programs want to see meaningful assets left over after closing. Expect meaningful post-closing reserves, typically 6 to 12 months of PITIA scaling with loan size; noticeably higher than conventional-loan expectations.
• A larger down payment. Asset depletion programs do not reach the maximum leverage that agency loans offer their strongest borrowers, so plan on bringing more equity to the table.
• More asset documentation, not less. Every account you want counted must be verified, for every holder on the account. Borrowers sometimes expect a lighter paperwork lift; on the asset side, it is heavier.

Against all of that stands one structural advantage no conventional program can match. None; retired borrowers with no current income are fully eligible. Employed and self-employed borrowers can also use asset income, and many programs allow it to supplement other documented income, while some require it to stand alone. A borrower who retired a decade ago is exactly as eligible as one who retired last quarter. Even bank statement loan programs need recent business deposits to document; asset depletion needs only the assets themselves.

And when conventional is genuinely better, we will say so. If you have strong, stable wage income and your assets are modest, a conventional loan will almost always be the better economics, and a scenario review with us will tell you that plainly rather than steer you into the wrong product.

One more routing note: if the property is an investment property rather than a home you will live in, a business-purpose program is usually the better path. See our DSCR loan programs, which qualify on the property's rental cash flow, and run your numbers with the DSCR calculator.

Asset Depletion Loan FAQs

Can I combine asset income with Social Security or a pension?

Often, yes, and for semi-retirees this is the feature that matters most. Some programs allow combining with rental, retirement, Social Security, or co-borrower income; others require asset depletion to stand alone. If your fixed monthly income covers most of the qualification but not quite all of it, layering asset income on top frequently closes the gap. Bring both your award letters and your account statements to a scenario review so we can show you the combined picture.

Is cash-out available on an asset depletion loan?

In many cases, yes, with program-specific limits. Available on many programs, typically capped near 75% LTV, with select primary-residence options up to 80% at strong credit; some programs do not offer cash-out at all. Cash-out proceeds never count as qualifying assets. One planning note: the equity you pull out is a use of the loan, not a source of qualification, so build your asset math without it. If accessing equity is your primary goal, tell us up front and we will match you to programs built for it.

What if I just sold my business or received an inheritance?

Recent windfalls can absolutely qualify you; the question is timing. Qualifying assets are typically seasoned between 30 days and 4 months, program-dependent. Recently received funds from a business sale or inheritance qualify once seasoned and documented; foreign accounts, revocable trusts, and 1031 exchange proceeds are eligible on select programs. Because the windows differ by program, the date your funds arrived often decides which programs are open right now and which open a little later. A scenario review can map your timeline to the options.

Do retirement accounts count toward qualifying income?

Generally yes, at a reduced value rather than the full statement balance. Typically 100% of cash and equivalents, around 80% of stocks, bonds, and funds, and around 70% of vested retirement assets. Business, trust, and foreign assets are generally excluded; recently converted crypto requires seasoning. Vesting and access matter, so IRAs and 401(k)s are reviewed alongside your age and the account terms. Cash and brokerage accounts are usually more straightforward. Bring your full account mix and we will show you which program treats it most favorably.

Do I need a job to qualify?

No employment-history requirement applies to this program type. None; retired borrowers with no current income are fully eligible. Employed and self-employed borrowers can also use asset income, and many programs allow it to supplement other documented income, while some require it to stand alone. You will still complete a full application, and your credit, assets, and the property are all reviewed before any approval, but the absence of a paycheck is not a barrier here. That is the entire point of the program.

Are asset depletion loans available outside California?

Consumer-purpose asset depletion loans, meaning loans for a primary residence or second home, are currently available only for properties located in California, where Evoque Lending is licensed by the California Department of Real Estate. If you are financing an investment property in another state, business-purpose options may be available depending on state law; our DSCR programs are the usual route.

Get a Straight Answer on Your Scenario

Send us the basics: your account mix, the property, and what you are trying to accomplish. Since 2005, we have structured loans for retirees, business sellers, and portfolio investors across every market cycle, and we will tell you what is realistic before you spend money on appraisals. Relationships. Expertise. Results.