Asset Depletion Loans In Delray Beach — The Quick Read: Asset depletion turns liquid savings, brokerage holdings, and retirement accounts into a monthly income figure a lender can use to qualify a borrower, without payroll or tax-return income. Underwriters divide eligible assets by a set number of months, apply discounts to certain account types, and use the result inside standard debt-to-income math. No assets are sold or frozen — the lender models a hypothetical cash flow, not a forced liquidation.
Most investors who ask about this loan type have one thing in common: a strong balance sheet and a thin income document. Retirees, recently exited founders, and people sitting on brokerage or retirement wealth often get turned down by conventional lenders even though their assets could cover a mortgage for decades. Asset depletion exists to fix that mismatch.
Key Takeaways
- Asset depletion converts eligible liquid assets into a monthly qualifying income figure using a divisor — there is no single federally mandated divisor or discount table.
- The math happens in two structurally different ways: asset depletion (income figure feeds standard DTI) and assets-only qualification (no DTI at all, just enough liquidity to cover the loan).
- Retirement accounts, brokerage accounts, and depository accounts are treated differently by different lenders, and age relative to penalty-free withdrawal thresholds often changes the discount applied.
- Through select lenders in Lendmire’s wholesale network, an Asset Allowance path divides liquid assets by 36, 60, or 84 months depending on the file, while an Assets-Only path skips debt-to-income math entirely.
- Nothing is liquidated to qualify. The lender models what the assets could produce; the borrower keeps the assets.
What Is an Asset Depletion Loan, Exactly?
An asset depletion loan lets a borrower qualify for a mortgage using liquid assets. This can replace or add to W-2 or tax-return income. The lender takes eligible account balances and applies a divisor. This produces a monthly income number. That number then slots into the same debt-to-income calculation a conventional file would use.
This isn’t a government program with a name and a rulebook. It’s an underwriting method. Because the rule treats income and assets as alternatives, a lender can build an entire qualification path around a balance sheet rather than a paycheck. Assets sit right next to income on that list, not underneath it.
Key Terms Defined
Divisor — the number of months a lender divides an asset balance by to produce a monthly qualifying income figure. Shorter divisors produce higher income; longer divisors produce lower income from the same asset pool.
Haircut — a discount applied to a specific asset type before it counts toward qualification. Retirement accounts are the most commonly discounted category.
Asset dissipation underwriting (ADU) — the bank-regulatory term for this practice, used by the Office of the Comptroller of the Currency to describe converting assets into a hypothetical income stream for repayment analysis.
Assets-only qualification — a structure with no debt-to-income calculation at all. The borrower simply needs liquid assets equal to the loan amount plus closing costs, with no monthly income figure computed.
Seasoning — the length of time funds must sit in an account before a lender will count them, meant to screen out last-minute deposits or borrowed funds.
How Underwriting Actually Treats It, Step by Step
The process runs in a fixed sequence, even though the divisor and discount schedule that fill in the blanks vary by lender.
Step 1: Inventory eligible assets. Checking, savings, CDs, brokerage holdings, and retirement accounts get listed. Business assets are usually excluded or heavily discounted because ownership and access are harder to verify.
Step 2: Apply asset-class haircuts. Retirement balances are commonly reduced, and the reduction often depends on whether the borrower has reached a penalty-free withdrawal age. Through select lenders in Lendmire’s network, retirement accounts count at 70% of value generally, stepping up to 80% once the account owner reaches 59½.
Step 3: Subtract funds already spoken for. Down payment, closing costs, and required reserves come out of the pool before any divisor gets applied. What’s left is the qualifying balance.
Step 4: Divide by the program’s month count. This single number decides more than almost anything else in the file. A shorter divisor can roughly double the qualifying monthly income compared to a longer one, using the exact same asset base. There is no single industry-wide formula here — the OCC Bulletin 2019-36 tells banks to build their own documented policy for this kind of underwriting but stops short of naming a required divisor.
Step 5: Layer or replace income. The resulting figure either supplements documented income or, on some files, stands in for it entirely.
Step 6: Standard underwriting proceeds. Once the income number exists, the deal works through credit review, reserve verification, and property review the same way any other non-QM file would.
DSCR loans are made for investment properties that the owner doesn’t live in. Lenders review these loans differently from a standard owner-occupied mortgage, because DSCR loans are business-purpose investor loans. Asset depletion works differently. Lenders mainly use it for borrower-qualified purchases, not for loans based on property income. If you’re choosing between the two, compare them side by side in Lendmire’s complete DSCR loans guide.
The Structures and Variations That Exist
People often lump two different products together under one name. This mix-up is the most common shopping mistake in this category. The CFPB Ability-to-Repay Consumer Summary explains why this happens. It requires lenders to consider a borrower’s income or assets — not both, and not necessarily payroll income at all. The CFPB’s ATR/QM rule summary lists eight factors lenders must weigh. These include current or reasonably expected income or assets, employment status, monthly mortgage payment, other monthly debt obligations, debt-to-income or residual income, credit history, and a few others.
Asset depletion produces a monthly income figure that feeds a standard DTI calculation. It behaves like income, just sourced from a balance sheet instead of a payroll system.
Assets-only qualification skips DTI math entirely. The borrower needs liquid assets equal to the loan amount plus closing costs, plus an offset for any net loss on other owned residential property. There’s no income figure computed at all — just a liquidity test.
Through select lenders in Lendmire’s wholesale network, two paths sit under this umbrella. An Asset Allowance path divides liquid assets by 36 months when used as supplemental income with DTI at or below 60%, by 60 months when supplemental with DTI above 60%, or by 84 months when used standalone or on any loan above $3,500,000 — this path applies to primary residences and second homes only, capped at 80% loan-to-value. An Assets-Only path requires no DTI calculation at all: U.S. liquid assets must equal the loan amount plus closing costs plus sixty months of any net loss on other residential property the borrower owns.
Across both paths, retirement accounts count at 70% of value (80% once the account owner is 59½ or older), while business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward qualification.
Loan sizes on these files run from $300,000 to $30,000,000 through two separate wholesale structures — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program carrying twelve-month bank-statement files to $30,000,000 on its own ladder, stepping down to 65% loan-to-value through $5,000,000, 60% through $10,000,000, and 55% through $30,000,000. Credit floors run 660 on the portfolio program, 680 on the bank program, and 700 above the super-jumbo line. Reserve requirements typically run 3 months of payments up to $500,000 in loan amount, 6 months up to $1,500,000, and 9 months above that, plus 2 additional months per financed property to a 12-month maximum — first-time real estate investors are generally held to 12 months regardless of loan size. All figures here are typical ranges through select wholesale-network guidelines and subject to full underwriting; none of it is a commitment to lend.
Where the General Rule Breaks
The clean version of this loan type gets messy fast in a handful of recurring situations.
Retirement-account age matters more than people expect. A borrower under 59½ often gets a steeper discount on retirement balances than a borrower past that threshold. The same dollar amount in an IRA can qualify differently depending purely on the account owner’s age.
Business assets get treated with suspicion. Personal accounts are preferred because ownership and access are easier to verify. Money sitting in a business operating account, even one the borrower fully owns, is frequently excluded or discounted more heavily than an identical balance in a personal account.
Unseasoned funds don’t count the same way. A large deposit that landed in an account right before application — an inheritance, a gift, sale proceeds — is often discounted or excluded outright until it has sat there long enough to look stable rather than staged.
Future asset sales can’t be used. A borrower planning to sell a second property or liquidate a position next year can’t count that future proceeds today. Qualification runs on present, verified liquidity, not a plan.
Compensating factors can move the needle. A marginal reserve position or a slightly thin asset pool can sometimes be offset by stronger credit or lower leverage elsewhere in the file. This isn’t a formal rule so much as a practitioner norm across non-QM lending broadly.
Above $3,500,000 on a primary residence or $3,000,000 on a second home or investment property, files move into case-by-case super-jumbo review with a 700 credit floor, clean housing history, and extended seasoning on any past credit event — and cash-out proceeds can never be used to satisfy reserve requirements at that size. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Investor Decision, In Practice
A borrower with substantial investments and real distributions can be turned down by a conventional lender for the same loan a salaried employee with no savings gets approved for easily. That mismatch is exactly what asset depletion is built to correct — it reads the balance sheet instead of the pay stub.
The real question an investor faces isn’t “should I use asset depletion.” It’s which structure fits your asset mix and your goal. Say a borrower has a large, diversified brokerage account and modest debt. That borrower might do better under the Asset Allowance path. Here, the resulting income figure blends with other qualifying income, which widens the field of eligible loan amounts. Now say a borrower holds almost everything in liquid cash or investment accounts and doesn’t want to show any income at all. That borrower might prefer Assets-Only. This path removes the DTI conversation entirely and turns the file into a simple liquidity check.
Property type matters too. The Asset Allowance path applies to primary residences and second homes, not investment property. If you’re an investor buying a rental purely to generate cash flow, DSCR underwriting is usually a better fit. Here, the property’s rental income covers the payment, rather than your balance sheet doing the work. It’s worth comparing both paths side by side before you choose. The complete DSCR loans guide walks through how the rental-income review framework differs from asset-based qualification. This helps anyone weighing a purchase where either option could apply. If you’re curious how this same asset-based approach plays out in other resort and coastal markets, check the Miami Beach coverage for a comparable walkthrough.
Frequently Asked Questions
Do I have to sell my investments to qualify this way?
No. The lender models a hypothetical monthly income from the asset balance; nothing gets liquidated or frozen to make that number appear on the file.
Is asset depletion the same as an asset qualifier loan?
Not exactly. Both convert assets into a monthly income figure, but the terminology and the divisor used vary by lender — always confirm the actual month count being applied rather than assuming a name implies a specific formula.
Can I combine asset depletion with Social Security or rental income?
Often yes, though blending multiple income sources on one file means it’s worth asking which factor is actually doing the work to clear the debt-to-income ratio, since some files layer several sources without clarifying which one matters most.
Does my age affect how my retirement accounts get counted?
Yes. Many programs discount retirement balances more heavily under a certain age threshold, then apply a lighter discount once the account owner passes it — through select lenders in Lendmire’s network, that threshold sits at 59½.
What happens above $3,500,000 in loan amount?
Files at that size and above move into case-by-case super-jumbo review with a stricter credit floor, longer seasoning requirements on past credit events, and a rule that cash-out proceeds can’t be used to meet reserve requirements. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
If you’re weighing whether an asset-based qualification path or a DSCR loan fits your next purchase or refinance better, Lendmire can help you compare options based on your asset mix, credit profile, leverage goals, and the property itself.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 40 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Ability-to-Repay Consumer Summary
2. CFPB ATR/QM Rule Summary (PDF)
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
