How Much Can You Qualify for With an Asset Depletion Loan?

A $3 million portfolio should make qualifying for a mortgage simple. The money is there, the statements are easy to produce and the payment is well within reach.

The complication is how a lender turns that balance into a loan amount. Each program decides which accounts count, how much of each balance it recognizes and how many months it spreads the total across. The same portfolio can support a $900,000 mortgage with one lender and a $2.4 million mortgage with another.

An asset depletion loan qualifies you on documented assets instead of employment income, with jumbo loan amounts up to $10 million available for qualified borrowers. The question is never whether your wealth is real. The question is how much of it a given formula will let you use.

Working through the calculations before you shop for a home tells you which lender guidelines fit your accounts and roughly how much house those accounts support.

How Lenders Convert Assets Into a Loan Amount

Every asset depletion calculation follows the same sequence, even when the inputs differ from one program to the next.

The lender starts with the accounts you document and removes anything it cannot use. It then applies any discount its guidelines require to specific account types. Funds committed to the down payment, closing costs and required reserves come out next, because money spent at closing cannot also support the payment.

What remains is the net eligible balance. Under the most common method, the lender divides that balance by a set number of months to produce monthly qualifying income. The income then feeds a debt-to-income calculation alongside the proposed housing payment and any other obligations, and the maximum loan amount follows from there.

Some Non-QM programs skip the income step and compare the net eligible balance directly to the requested loan. If the balance after the down payment and any debt balances exceeds the loan amount, the assets support the mortgage on their own.

In neither case do you sell the holdings or set up a withdrawal schedule. The investments stay where they are, which is the reason many buyers prefer keeping a stock portfolio invested while buying a house to liquidating it for a cash purchase.

Which Assets Count, and How Much of Each

Lenders group assets by how quickly and reliably they can be converted to cash. The treatment below reflects common program guidelines, and any specific percentage depends on the lender.

• Checking, savings, money market accounts and CDs. These are the simplest assets to document and are generally counted at full value. Borrowed funds and recent unexplained deposits are excluded.
• Marketable securities. Publicly traded stocks, bonds, mutual funds, ETFs and Treasuries are widely accepted. Some programs count them in full while others apply a reduction for market volatility.
• Retirement accounts. Vested 401(k), IRA, 403(b) and similar balances may be used, usually at a reduced percentage. Borrowers under 59½ often see a lower percentage, a deduction for penalties and taxes, or exclusion of the account under certain programs.
• Cash value of life insurance and annuities. The accessible cash value counts, not the death benefit or face amount.
• Bitcoin and Ethereum. Select lenders accept these two holdings when they are documented through an acceptable exchange or custodian, often at a reduced percentage of current value.
• Cash-out proceeds. On a cash-out refinance, proceeds above the loans being paid off may count as qualifying assets under some programs.

The exclusions matter as much as the inclusions. Unvested restricted stock, unexercised options, shares in a private company, assets pledged as collateral and business operating funds generally do not count. Trust assets qualify only when the lender can verify that you have access to them.

Those rules shape applications differently from one market to the next. A technology employee pursuing an asset depletion loan in California may hold several million dollars in company stock. Only the vested shares sitting in a brokerage account are available to the calculation. A business owner looking at asset depletion loans in Illinois may show a large operating account. The lender will want the funds that stay in the business kept separate from the funds that qualify for the mortgage.

Three Formulas, Three Very Different Answers

The number of months in the divisor is the single largest variable in how much you qualify for. Three formulas are in common use.

Fannie Mae's asset depletion formula divides net documented assets by the full amortization term, or 360 months on a 30-year mortgage. The program is limited to primary residences and second homes. It generally caps the loan at 70% of value and extends to 80% only when the owner of the assets is at least 62.

Freddie Mac's new 180-month formula replaces its prior 240-month calculation for mortgages closing on or after February 3, 2027, with lenders permitted to adopt it immediately. The age requirement for depository and securities accounts is gone, all occupancy types are allowed, and many accounts now need 12 months of seasoning. The program remains limited to purchases and no-cash-out refinances.

Non-QM asset depletion programs use far shorter periods, commonly 120, 84 or 60 months. They also permit cash-out refinances, investment properties, cryptocurrency and loan amounts that the agency programs do not reach.

Assume, solely for comparison, a borrower with $2.7 million in net eligible assets after every deduction, no other monthly debt, and a program debt-to-income limit of 45%. Assume also that each $1 million borrowed carries a total monthly payment of approximately $8,500 including taxes and insurance.

• 360 months: $7,500 in monthly qualifying income supports a payment of $3,375 and a mortgage of approximately $400,000.
• 180 months: $15,000 in monthly income supports a $6,750 payment and a mortgage of approximately $790,000.
• 120 months: $22,500 in monthly income supports a $10,125 payment and a mortgage of approximately $1.2 million.
• 60 months: $45,000 in monthly income supports a $20,250 payment and a mortgage of approximately $2.4 million.

The borrower is identical in all four cases. The payment assumption is an illustration, and the actual figure depends on the rate, property taxes and insurance for the home in question. Even so, the spread between $400,000 and $2.4 million explains why the choice of formula comes before the choice of house.

Method 1: Qualifying on Assets Alone

The asset-only method is the most direct. The lender adjusts your accounts, subtracts the down payment and any debt balances, and checks whether the remainder covers the requested loan.

Consider a hypothetical buyer, age 61, purchasing a $2.4 million home in Cherry Hills Village with 30% down. The down payment is $720,000, closing costs are approximately $60,000 and the requested loan is $1,680,000. The buyer holds $2.6 million in a taxable brokerage account and $900,000 in an IRA, with no other debt.

Assume the program counts the brokerage account in full and recognizes 70% of the IRA, or $630,000. Adjusted eligible assets total $3,230,000. Subtracting the $720,000 down payment and $60,000 in closing costs leaves $2,450,000.

The remaining balance exceeds the $1,680,000 loan by $770,000, so the assets support the mortgage with room to spare. Under this program, the same buyer could consider a higher purchase price without adding income to the file. Asset depletion loans in Colorado often follow this pattern for buyers arriving from a business sale or an early retirement, where the portfolio is large and the paycheck is gone.

The buyer still has to satisfy the program's credit, reserve and property requirements. A different program might recognize less of the IRA or require reserves on top of the down payment, which would narrow the margin.

Method 2: Combining Assets With Income

Many borrowers have both a portfolio and recurring income, such as a pension, Social Security, rental income or a salary. Certain programs allow the two to work together, which can produce a larger approval than either source alone.

Under this method, the lender divides adjusted eligible assets by a set number of months, often 60, and adds the result to documented monthly income. The combined figure is then measured against the proposed payment and other debts at the program's debt-to-income limit.

Consider a hypothetical retired couple buying a $1.9 million home in Rollingwood with 25% down. The down payment is $475,000, closing costs are approximately $45,000 and the requested loan is $1,425,000. They hold $1.1 million in a brokerage account and $300,000 in cash, and they receive an $11,000 monthly pension plus $3,800 in Social Security. Their only other debt is a $600 car payment.

On assets alone, $1.4 million less $520,000 for the down payment and closing costs leaves $880,000, which falls $545,000 short of the loan. Under the combined method, $880,000 divided by 60 months produces $14,667 in monthly income from assets. Adding the pension and Social Security brings total qualifying income to $29,467.

At a 45% limit, the couple can carry $13,260 in total monthly obligations. After the $600 car payment, $12,660 remains for housing. A total payment of approximately $12,113 on the $1,425,000 loan fits within that figure, so the combination qualifies where the assets alone did not. Buyers using asset depletion loans in Texas frequently land in this position, with a solid retirement income that cannot carry a jumbo payment by itself.

The lender must avoid counting the same funds twice. Assets that produce calculated income cannot also serve as the reserves the program requires, and the payment assumption above should be replaced with the actual figure for the property.

Why Two Lenders Reach Different Numbers for the Same Portfolio

Beyond the divisor, programs differ on the percentage of each account they recognize and how they treat borrowers under 59½. They also differ on whether debt balances reduce eligible assets and whether cryptocurrency counts at all. Credit score, property type and occupancy can also determine which calculation is available.

Consider a hypothetical 56-year-old buying a $2 million home in Short Hills with 25% down, a $1.5 million loan and approximately $50,000 in closing costs. The buyer holds $1.4 million in a brokerage account and $1.6 million across a 401(k) and an IRA.

Assume the first lender counts the brokerage account in full, recognizes 60% of the retirement balances because of the buyer's age, and divides by 120 months. Eligible assets are $2,360,000, less $550,000 for the down payment and closing costs, or $1,810,000. Divided by 120, the result is $15,083 in monthly income. A total payment of approximately $12,750 on the loan would consume 85% of that income, well beyond any program limit.

Assume the second lender recognizes 70% of the retirement balances and divides by 60 months. Eligible assets are $2,520,000, less the same $550,000, or $1,970,000. Divided by 60, the result is $32,833 in monthly income, and the same $12,750 payment represents 39%. Under this lender's asset-only method, the $1,970,000 balance also exceeds the $1.5 million loan outright.

The buyer's accounts did not change between the two reviews. Buyers using asset depletion loans in New Jersey, where a large share of household wealth often sits in retirement plans, see this gap more than most. The percentages here are assumptions for illustration, and each lender publishes its own.

Second Homes and Investment Properties

Occupancy changes the arithmetic. On a second home, the lender counts the payment on your primary residence and the payment on the new property together, and reserve requirements may apply to both. Under the combined method, that larger payment total has to fit within the same debt-to-income limit.

Fannie Mae's program covers primary residences and second homes but not investment properties. Freddie Mac's updated program and most Non-QM programs allow all three. Someone buying a second home in Florida while keeping a residence in the Northeast will usually find the shorter Non-QM divisors necessary to carry both payments. Asset depletion loans in Florida are structured around that two-household budget for retirees and seasonal residents.

If the plan is to rent the property, most lenders will classify it as an investment property. Projected rent generally does not count as income under an asset depletion program, so the assets and any existing income have to carry the payment on their own.

Estimating Your Own Maximum Loan Amount

You can run these calculations before contacting a lender. An asset depletion mortgage calculator built on the Non-QM method takes the purchase price, down payment, each category of assets, remaining debt balances and any monthly income you want considered. It applies the asset-only and combined methods and reports the higher result.

The output is a maximum loan amount and purchase price, or, when the assets fall short, an estimate of the additional assets needed to close the gap. From there, the practical options are a larger down payment, a lower price or recurring income added to the file. A program with a shorter divisor and more generous account treatment may also close the gap.

Calculator results are estimates. Final approval depends on documentation, account ownership, credit, reserves, property details, occupancy and the specific program.

Frequently Asked Questions

Do I have to sell investments or take withdrawals to qualify?

No. The lender uses the value of the accounts to calculate qualifying income or to confirm the assets cover the loan. The holdings stay invested, and you are not required to follow a distribution schedule after closing.

Can I use my 401(k) or IRA if I am under 59½?

Often yes, but at a reduced percentage, and some programs exclude the accounts until you reach 59½. Taxable brokerage and cash accounts carry no age restriction, which is why they usually form the foundation of an application for a younger borrower.

Does my spouse's income count alongside my assets?

Under the combined method, documented income from any borrower on the loan can be added to the income calculated from assets. The lender will verify the income the same way it would on a traditional mortgage.

Can I use an asset depletion loan for a second home?

Yes. Both agency programs and Non-QM programs allow second homes, and Non-QM programs extend to investment properties. The payment on your primary residence counts against the same debt-to-income limit, so the divisor matters even more on a second property.

What if my assets fall short of the loan I want?

Start with the formula rather than the price. A program that divides by 60 months instead of 120 doubles the income from the same accounts. Adding a pension or salary to the file may close the rest of the gap. A larger down payment reduces the loan but also reduces the assets left to qualify, so the two sides should be weighed together.

Why Working With a Mortgage Broker Matters

A single lender can tell you what its asset depletion program allows. It cannot tell you whether another program would recognize more of your IRA, divide by fewer months or accept the Bitcoin a competitor excludes.

The Short Hills example above turned on two assumptions, the retirement percentage and the divisor, and the difference was a payment at 85% of income versus 39%. The lenders that handle asset depletion loans well differ from one another on exactly those points, and the differences rarely appear in a rate sheet.

A broker with access to multiple asset depletion programs can match the accounts you hold to the guidelines that treat them best. Pricing is then compared among the lenders whose formula produces the approval you need.

Why Work With LendFriend Mortgage

LendFriend Mortgage works with more than 40 wholesale lenders, including lenders that specialize in asset depletion, jumbo and other Non-QM programs. The team reviews the accounts first and selects the lender second. A buyer in Cherry Hills Village, Rollingwood or Short Hills is placed with the formula that fits the portfolio.

LendFriend arranges asset depletion mortgages for purchases, rate-and-term refinances and cash-out refinances. Primary residences, second homes and investment properties are eligible, with jumbo loan amounts up to $10 million for qualified borrowers. Its asset depletion calculator applies the same asset-only and combined methods described above, so the estimate you see online reflects the way the loan will be underwritten.

The Bottom Line

How much you qualify for with an asset depletion loan depends on three decisions the lender makes. Which accounts count, how much of each balance it recognizes, and how many months it spreads the total across. A 360-month agency formula and a 60-month Non-QM formula can produce a six-fold difference in qualifying income from the same statements.

Run the arithmetic before you fall in love with a property. Gather current statements for every account you intend to use, separate the funds you will spend at closing, and note any income that could be added to the file. With that in hand, the right program is usually clear, and the maximum loan amount follows from it.

Schedule a call with me today or get in touch with me by completing this quick form to discuss your options.