Asset Depletion Mortgages: A Smart Solution for High Net Worth Buyers

For high-net-worth individuals, securing a mortgage can feel unnecessarily difficult. Despite having substantial net worth and millions in liquid assets, many traditional lenders still underwrite as if employment income is the only indicator of repayment ability. If you don’t have W-2 wages, consistent business income, or tax returns that reflect your true financial position, the process can quickly stall.

This disconnect is especially frustrating for borrowers who have intentionally structured their finances around investing, liquidity, and long-term wealth preservation. Retirees, investors, entrepreneurs, and trust beneficiaries often find themselves asset-rich but income-light on paper.

That’s where asset depletion mortgages—sometimes referred to as asset depletion loans or asset based mortgages—become a powerful solution. These programs allow lenders to qualify borrowers using assets instead of traditional income, converting wealth into usable qualifying income without forcing liquidation, taxable events, or artificial income manipulation.

What Is an Asset Depletion Mortgage?

An asset depletion mortgage is designed for borrowers who hold significant liquid or semi-liquid assets but do not show enough traditional income to qualify under conventional guidelines. Rather than relying on pay stubs, tax returns, or profit-and-loss statements, lenders calculate a theoretical monthly income by dividing eligible assets over a defined time horizon.

Most lenders use a conservative 360‑month (30‑year) calculation, which significantly limits how much income assets can generate. At LendFriend, we work with lenders that use a 60‑month asset depletion calculation, dramatically increasing qualifying income and making the loan far more practical for high‑value purchases.

The core advantage of asset depletion mortgage lending is flexibility. These loans are frequently used by borrowers whose real financial strength sits on their balance sheet—not their tax return. Asset depletion loans can be used for primary residences, second homes, and in certain cases investment properties, depending on lender guidelines.

Because asset treatment, reserve requirements, and calculation methods vary widely, structuring these loans correctly is far more important than simply “having assets.” The right approach can be the difference between barely qualifying and qualifying comfortably.

Asset Depletion Example: High‑Net‑Worth Buyer in Austin, Texas

Consider a buyer purchasing a $2.5 million home in Austin’s Zilker neighborhood. The borrower has $5 million in liquid assets across brokerage accounts and cash reserves. There is no W‑2 income, no active business income, and no pension. On paper, this profile doesn't qualify with a traditional lender despite the borrower’s obvious financial strength.

Under a conventional asset depletion approach, a lender divides $5 million over 360 months, producing approximately $13,888 per month in qualifying income. At current rates, that level of income might only support a mortgage around $1.2 million. The borrower would need to deploy more than $1.3 million as a down payment—tying up capital that could otherwise remain invested.

Using LendFriend’s 60‑month asset depletion structure, the same $5 million generates $83,333 per month in qualifying income. That comfortably supports a $2 million or larger mortgage, depending on reserves, credit profile, and loan structure.

The outcome is a materially better use of capital. The borrower puts less cash into the home, retains liquidity, and keeps assets working in the market rather than converting them into illiquid equity. This is precisely why asset depletion mortgages are increasingly common among Austin buyers who value financial efficiency as much as homeownership.

Another Asset Depletion Example:  Naples, Florida

Florida markets like Boca Raton and Naples attract a different—but equally asset‑heavy—borrower profile. Many buyers are retirees, trust beneficiaries, or second‑home purchasers who have intentionally minimized taxable income while maintaining substantial portfolios.

Imagine a buyer purchasing a $3 million waterfront home in Naples. They hold $3.8 million in brokerage assets and retirement accounts but draw very little income by design. A traditional lender struggles to qualify the loan, even though the borrower’s financial risk is objectively low.

With an asset based mortgage, eligible assets are converted into qualifying income without requiring forced withdrawals, restructuring of trusts, or artificial income generation. This allows Florida buyers to purchase high‑value homes while preserving estate plans and long‑term investment strategies.

In markets where many buyers are cash‑strong but income‑light, asset depletion mortgage lending often provides the cleanest path to approval—without compromising financial intent.

How Lenders Treat Assets in Asset Depletion Loans

Not all assets are treated equally in asset depletion calculations, and understanding these distinctions is essential to estimating true buying power.

Cash held in checking or savings accounts and standard brokerage assets are typically counted at 100 percent of value due to their liquidity. Retirement accounts such as IRAs and 401(k)s are often discounted to 70–80 percent and may require proof of access or age eligibility. Cryptocurrency holdings, when accepted by the lender, are typically discounted more heavily—often in the 50–60 percent range—to account for volatility, custody requirements, and liquidity considerations. Revocable trusts are generally acceptable, while irrevocable trusts are usually excluded because the borrower does not control the assets.

Before calculating income, lenders deduct funds allocated for the down payment, closing costs, and required reserves. Reserve requirements can range from six months to two years of housing expenses depending on loan size and lender risk tolerance. Equity‑heavy or volatile portfolios may be discounted further.

These nuances are why asset depletion loans should be structured deliberately. Asset composition, account seasoning, and timing all influence the final qualifying outcome.

Why Work With a Mortgage Broker for Asset Depletion Lending

Asset depletion loans are not standardized products. Each lender applies its own rules, calculations, and risk adjustments. Working directly with a single bank limits your options to one interpretation of asset depletion.

A mortgage broker provides access to multiple asset based mortgage lenders, including niche and private institutions that offer far more flexible guidelines. Brokers understand how to position assets, manage reserves, and select lenders whose programs align with your financial profile.

At LendFriend, asset depletion mortgages are a core specialty. We focus on structuring loans that align with your broader wealth strategy—not forcing your finances to fit outdated underwriting boxes. That means smarter calculations, competitive pricing, and fewer surprises during underwriting.

Who Benefits Most From Asset Depletion Mortgages

Asset depletion mortgages are ideal for borrowers whose financial strength is not reflected in traditional income documentation. This includes retirees living off savings, investors funding lifestyles through portfolios, entrepreneurs who have exited businesses, and trust beneficiaries with access to significant assets.

They are particularly effective in high‑value markets like Austin, Boca Raton, and Naples, where property prices often exceed what conventional income guidelines support—even for financially sophisticated buyers.

Challenges of Asset Depletion Loans and How to Overcome Them

Asset depletion loans can involve higher reserve requirements, discounted asset valuations, and increased scrutiny of portfolio composition. Market volatility can also impact qualifying income if valuations fluctuate during underwriting.

These challenges are best addressed through lender selection and proactive structuring. Experienced brokers know which lenders apply more favorable asset treatment, how to lock valuations strategically, and how to present complex financial profiles cleanly.

Asset Depletion vs Bank Statement Loans

Asset depletion loans and bank statement loans solve different problems. Bank statement loans qualify borrowers using actual business deposits over time, while asset depletion loans rely entirely on assets converted into theoretical income.

Asset depletion is ideal for borrowers without active cash flow but with strong balance sheets. Bank statement loans are better suited for self‑employed borrowers with consistent deposits but fewer liquid assets. Choosing the correct option depends on where your financial strength truly lives.

Tax, Estate, and Financial Planning Considerations

Asset depletion mortgages allow borrowers to retain investments and avoid unnecessary liquidation. However, funding down payments or reserves may still trigger capital gains depending on asset selection.

Many high‑net‑worth borrowers coordinate asset depletion loans with their CPA or financial advisor to ensure alignment with estate planning, trust structures, and long‑term cash‑flow goals. Done correctly, asset depletion can complement—not disrupt—broader financial strategy.

Final Thoughts

An asset depletion mortgage is one of the most effective financing tools available for high‑net‑worth buyers who want to leverage assets intelligently. Whether you’re buying in Austin, relocating to Boca Raton, or settling into Naples, asset based mortgages allow you to purchase without compromising liquidity or long‑term planning.

LendFriend Mortgage has helped many asset‑rich borrowers with little to no traditional income secure homes confidently and competitively. If you’re exploring an asset depletion loan, we’re happy to walk through the numbers and structure a solution that fits your goals. Schedule a call or get in touch with me by completing this quick form, and I'll reach out as soon as possible.