Quick Answer
An asset depletion loan turns liquid assets into monthly qualifying income: we take your qualifying balance and divide it by the loan term in months, so $500,000 divided by 360 gives you about $1,389 of income per month to add to anything else you earn. It is the go-to path for early retirees and high-net-worth buyers whose wealth is big but paycheck is small. Ask Patrick how asset depletion loans would apply to your situation.
Here is the money problem, Patriot Nation: you have half a million dollars in savings and investments, but no W-2 paycheck to show a lender, so every door seems to close. An asset depletion loan opens it: your assets become your income.
The lender takes your eligible liquid assets and divides them by the loan term in months. $500,000 divided by 360 months adds about $1,389 a month of qualifying income on top of anything else you earn.
It is built for retirees, early retirees, and high-net-worth buyers whose wealth is big but whose paycheck is small.
Bring clean account statements and we can run the numbers before you assume the math will not work.
How the Calculation Works
The lender totals your eligible liquid assets, then divides by the loan term in months (typically 360 for a 30-year loan). Some lenders apply a discount of 30% to account for market fluctuations and taxes. Example: $500,000 assets x 70% usable = $350,000. $350,000 / 360 = $972 per month in qualifying income.
What it means: you are converting net worth into a monthly paycheck. The lender counts what you own as if it were spread across the life of the loan, so a retiree with no job history can still qualify.
The money angle: the discount matters. Some lenders count 100% of cash but only part of retirement accounts, and each lender's formula changes the monthly income number and the house you can afford.
Real-world consequence: the exact math varies by lender, so the number I run for you is the one that counts. Bring the statements and let me show you what your assets actually produce.
Requirements for Asset Depletion Loans
Minimum assets typically start at $200,000 to $300,000 after discounting. Credit score requirements are usually 660 to 700. Down payment of 10% to 20% is typical. Assets must be verifiable and liquid: cash, stocks, bonds, mutual funds, and retirement accounts.
The meaning: this is a non-QM style program, which means the lender is taking more risk and sets its own bar: meaningful assets, decent credit, and a real down payment.
The money consequence: the larger down payment is the price of entry, but the payoff is that your assets, not your paycheck, carry the qualification.
The play: if your credit needs work, we fix that first. If your assets are close to the minimum, we find the lender with the friendliest formula. Either way, the plan is clear before we apply.
Qualifying Asset Types
Eligible assets include checking and savings accounts, certificates of deposit, stocks and bonds, mutual funds, and vested portions of retirement accounts like 401(k)s and IRAs. Real estate equity and business assets generally do not qualify.
What counts: lenders count money they can verify and that you can realistically liquidate. Cash, CDs, stocks, bonds, mutual funds, and vested retirement accounts qualify. A car or a business stake does not.
The money angle: the mix of your assets changes the income. Cash counts strongest, retirement accounts count at a discount, and anything hard to liquidate counts for nothing.
Real-world consequence: the way your money is parked decides how much income it produces, so we position your accounts before we apply, not after.
Rates and Terms
Asset depletion loans typically have rates 0.5% to 1.5% higher than conventional loans. Loan terms are usually 15 or 30 years fixed. Some lenders offer adjustable-rate options. The specific rate depends on your credit score, loan-to-value ratio, and total asset position.
The meaning: you pay a premium for the flexibility of qualifying on assets instead of income. That is the trade, and it is usually worth it for the right buyer.
The money angle: a higher rate means a higher monthly payment, so we weigh the rate premium against the alternative of waiting until your income qualifies.
The play: compare the asset depletion route against a conventional loan with a bigger down payment. Sometimes the conventional path wins, and my job is to show you both boards.
Pros and Cons
Pros: no earned income required, ideal for retirees and early retirees, uses assets you already have, predictable calculation. Cons: higher rates, significant assets required, not all lenders offer them, asset values fluctuate.
The meaning: this loan exists to solve one specific problem: asset-rich, income-light buyers. When that is your situation, it is a clean fit.
The money angle: the cons are real costs: a higher rate, a bigger down payment, and a smaller pool of lenders. We price those before we commit.
Real-world consequence: for the right borrower the pros crush the cons. For everyone else, the alternatives are cheaper. Knowing which side you are on is the whole game.
When Asset Depletion Makes Sense
This loan works well for retirees with investment portfolios but limited pension or Social Security income, early retirees who have assets but have not yet started drawing on them, and individuals with large cash positions from a business sale or inheritance who do not have regular W-2 income.
What it means: if your wealth is real but your income line is thin, this is the loan designed for you.
The money angle: the asset depletion route can get you into a home years before a traditional income-based file would, and those years of ownership are years of equity building.
The play: bring your account statements, tell me your goals, and I will run the asset depletion calculation side by side with the alternatives. Make it a great one, Patriot Nation.
Ask Patrick about asset depletion loans
Get a straight answer on asset depletion loans and how it applies to your situation.
