Asset Depletion Loans In Jackson Hole — The Quick Read: Asset depletion is a qualification method, not a separate loan product. It lets a lender convert liquid assets — brokerage accounts, retirement funds, cash — into a hypothetical monthly income figure used to size the loan. Retirees, business owners between liquidity events, and high-net-worth buyers in resort markets like Jackson Hole use it because their traditional personal-income documentation understate what they can actually afford. The mechanics, the divisor, and the eligible assets all vary by lender, and that variation is the whole ballgame.
Key Takeaways
- Asset depletion turns liquid assets into a paper income figure — nothing is actually sold or withdrawn.
- The divisor (the number of months the balance is spread across) is the single biggest lever in the math.
- Retirement accounts, brokerage balances, and cash all get treated differently — haircuts and eligibility rules aren’t uniform.
- Above certain loan sizes, every file typically gets a case-by-case underwriting look, and approval is subject to underwriter review rather than a chart alone.
Key Terms Defined
Asset depletion (or asset dissipation): a method where a lender divides a borrower’s eligible liquid assets by a set number of months to produce a monthly figure that stands in for income on the loan application.
Divisor: the number of months a lender uses to spread an asset balance into monthly qualifying income — a shorter divisor produces a bigger monthly number from the same account balance.
Haircut: a discount applied to a volatile asset (stocks, retirement funds) before it’s counted, because the lender assumes the balance could drop before it’s ever touched.
DTI (debt-to-income ratio): the share of a borrower’s monthly qualifying income that goes toward debt payments — asset depletion income gets folded into this ratio just like a paycheck would.
Non-QM (non-qualified mortgage): a loan that falls outside the standard federal repayment-capacity safe harbor, which gives lenders room to build custom underwriting paths like asset-based qualification.
Why This Exists At All
A borrower with $4 million sitting in a brokerage account and $40,000 of reported taxable income looks broke on paper. Asset depletion exists to fix that mismatch.
The concept isn’t new, and it isn’t fringe. The OCC Bulletin 2019-36 states plainly that this kind of underwriting “has existed and been prudently administered for many years,” and defines it as a method that “uses an applicant’s assets to calculate a hypothetical cash annuity stream, which is added to the other income of the applicant.” That word “hypothetical” matters. Nothing gets liquidated. The account keeps earning, keeps compounding, and keeps existing exactly as it did before the loan closed. The number generated is a qualifying convention, not a withdrawal plan.
Places like Jackson Hole see a concentrated version of this problem. Buyers relocating there are often retirees living off a portfolio, founders between a sale and a new venture, or executives with most of their wealth tied up in equity rather than a paycheck. None of that shows up cleanly on a W-2 or a Schedule C. Asset depletion gives that buyer a path that doesn’t depend on selling the portfolio down to manufacture “income.”
How The Math Actually Works, Step By Step
The process runs the same way regardless of lender — only the inputs change.
Step 1: Inventory and verify. The lender pulls statements on every account the borrower wants to use — checking, savings, brokerage, retirement — and confirms ownership, balance, and how long the account has existed.
Step 2: Apply haircuts. Cash counts closest to full value. Anything that can swing in price — stocks, mutual funds, retirement balances — gets discounted before it enters the math, because the lender doesn’t want to qualify someone on a number that could evaporate in a market pullback.
Step 3: Carve out committed funds. Whatever is going toward the down payment, closing costs, and required post-closing reserves comes out of the pool first. Only what’s left after those deductions gets used in the depletion calculation.
Step 4: Divide by the term. The remaining balance gets divided by a set number of months. This is the step that decides everything — a shorter divisor produces a larger monthly qualifying figure from an identical asset pool, and a longer one produces a smaller figure.
Step 5: Blend or stand alone. Some files use the asset-derived figure as the sole qualifying income. Others blend it with documented wages, self-employment income, or rental cash flow, depending on the specific program.
Across the wholesale network Lendmire places files through, there are two distinct asset-based paths worth knowing by name. The asset allowance path divides liquid assets by 36 months when it’s supplementing other documented income and the borrower’s overall debt-to-income sits at or below 60%, by 60 months when it’s supplementing income above that 60% DTI threshold, or by 84 months when the asset income has to stand entirely on its own or the loan amount runs above $3,500,000. That path applies to primary residences and second homes, capped at 80% loan-to-value. The assets-only path is different in kind — there’s no DTI calculation at all, but the borrower has to show U.S. liquid assets equal to the full loan amount plus closing costs plus sixty months of coverage for any net loss carried on other residential property.
Eligible asset treatment isn’t uniform either. Retirement accounts typically count at 70% of their value. That rises to 80% once you’re past 59½ and can access the funds without an early-withdrawal penalty. Some things never count on this program: business funds, gifts, any trust other than a revocable living trust, unvested stock, and cryptocurrency. That’s a hard line, not a negotiable overlay.
Where This Diverges By Lender — And Why That’s the Real Story
The single biggest misconception about asset depletion is that there’s one industry-standard formula everyone uses. There isn’t, and the agency side proves it better than anything else.
That’s the third time in recent memory the number has moved — Freddie’s divisor has gone from 360, to 240, and now to 180 months. If a single GSE can’t hold a fixed number for more than a few years, nobody should assume “asset depletion” means the same math from lender to lender.
The rule also changes from agency to agency. Fannie Mae’s version is narrower. It focuses on employment-related retirement assets like 401(k)s, IRAs, and severance packages. Freddie’s rewritten rule goes further. It reaches into ordinary depository and brokerage holdings, too. Under the version Freddie is phasing out, asset-depletion income only applied to one- or two-unit primary residences and second homes. Investment properties weren’t eligible at all on the agency side until this rewrite.
None of that agency math applies to the non-QM programs Lendmire places files through. Those run on their own guidelines, described above, and don’t follow Fannie’s or Freddie’s formula. But this difference matters for a practical reason: it shows that the divisor and the eligible-asset list are lender decisions, not fixed industry facts. If you’re comparing “asset depletion” quotes from two lenders, ask about the divisor first. It’s the one variable that changes the outcome the most.
What Breaks the General Rule
A handful of edge cases trip people up more than anything else in this process.
Retirement funds have an access problem. If a retirement account carries an early-distribution penalty, that penalty typically gets deducted before the balance is counted — which is part of why the 70%/80% haircut on retirement assets exists in the first place. A 45-year-old with a large 401(k) balance and a 65-year-old with the same balance don’t get treated the same way, because one can access the funds penalty-free and the other can’t.
Short-term rental income doesn’t stack cleanly with asset-qualified files. When an asset-depletion borrower is also trying to document rental income on an investment property, the standard appraisal exhibit — Fannie Mae’s Form 1007 rent schedule — wasn’t built for nightly-rental math. Appraisers using that form can’t simply multiply a nightly rate by 30 to produce a monthly figure. That gap matters for anyone trying to combine asset-based qualification with a short-term rental purchase; the property-income side of the file needs its own separate documentation path.
Continuity requirements aren’t the same across programs. On the agency side, if asset-derived income is the sole or majority source of qualifying income, the lender has to document that it’s expected to continue for at least three years and assess whether the borrower can keep paying once the asset is drawn down. Non-QM asset-based programs work differently — the calculation is a qualifying convention, and the borrower isn’t required to prove three years of continued receipt, because no actual distribution is happening in the first place. Conflating the two creates false expectations.
Above certain loan sizes, the chart stops being the answer. Every file above $4,000,000 in the wholesale programs Lendmire arranges gets reviewed case by case before it’s even submitted — leverage at that size isn’t a flat percentage pulled off a grid, it’s an underwriting judgment call informed by the borrower’s full asset picture, credit profile, and reserves.
What The Numbers Look Like in Practice
Loan sizes across the two wholesale programs Lendmire places asset-qualified files through run from $300,000 to $30,000,000. A portfolio non-QM program carries files to $6,000,000. A separate bank portfolio program, built around twelve months of statements, carries files on its own size ladder out to $30,000,000 — 65% loan-to-value to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% LTV or the band’s ceiling, whichever is lower. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Leverage on a primary residence steps down as loan size climbs: up to 90% under $1,000,000, 85% up to $1,500,000, still 85% up to $2,000,000 with a slightly tighter cash-out limit, dropping into the 80% range through the $2,500,000–$3,000,000 band, then 75% through $3,500,000, and 65% once a loan crosses into the $4,000,000–$5,000,000 range — where the super-jumbo overlays also kick in. Second homes and investment properties typically run about five points lower than a comparable primary-residence file at every size tier, subject to lender guidelines.
Above $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property, a heavier set of overlays applies. You’ll need a 700 credit floor, a clean 0x30x24 housing-payment history, and 48-month seasoning on any credit event. You must also be a U.S. citizen or permanent resident. Non-occupant co-borrowers aren’t allowed, and rural properties can’t exceed ten acres. At this tier, you can’t use cash-out proceeds to meet reserve requirements — reserves must come from separate, seasoned liquidity. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Reserves scale with loan size: typically three months of housing payment for smaller loan amounts, six months as loan size increases, and nine months above that, plus two additional months for every other financed property the borrower carries, up to a twelve-month ceiling. First-time real estate investors are usually held to a full twelve months regardless of loan size. Credit floors sit at 660 on the portfolio program, 680 on the bank statement program, and 700 once a file crosses the super-jumbo threshold. Debt-to-income can run as high as 50% on most files, subject to full underwriting.
When you compare asset depletion to Lendmire’s other documentation options, keep this in mind: it’s just one choice among several. Lendmire’s wholesale network also offers bank statement programs, profit-and-loss underwriting, and asset-based qualification. The right program depends on which part of your financial picture is strongest. Say you’re weighing an asset-based purchase against a rental property that could qualify on its own cash flow instead of your balance sheet. In that case, check out how DSCR loans compare to asset depletion loans before you choose. And if you want the full picture of how rental-income review works as an alternative, Lendmire’s complete DSCR loans guide covers that process from start to finish.
Investors weighing a resort-market purchase against this exact same asset-based path elsewhere — asset depletion loans in Santa Barbara is a useful side-by-side, since the underwriting mechanics don’t change by geography even when the buyer profile does.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
For deeper background on the mechanics discussed here, see CFPB — What is the ability-to-repay rule.
Frequently Asked Questions
Do I have to sell my investments to qualify this way?
No. The whole point of asset depletion is that nothing gets liquidated. The lender converts the balance into a hypothetical monthly figure on paper, while the actual account keeps sitting exactly where it is, still invested and still earning.
Why does the divisor matter so much?
Because it’s the single biggest lever in the calculation. A shorter divisor spreads the same asset balance over fewer months, which produces a larger monthly qualifying figure — and a longer divisor produces a smaller one. Two lenders looking at the identical account balance can arrive at very different qualifying numbers just by using a different divisor.
Does a 401(k) count the same as a brokerage account?
Not exactly. Retirement accounts typically count at a reduced percentage of their balance, with a higher percentage allowed once the borrower is old enough to access the funds without an early-withdrawal penalty. Ordinary brokerage and cash accounts are treated differently, and eligibility varies by lender guidelines.
Can asset depletion be combined with other income?
On many programs, yes — the asset-derived figure can supplement documented wages, self-employment income, or rental cash flow rather than standing alone. Whether that blend is allowed, and how the debt-to-income ratio gets calculated once it’s blended, depends on the specific program and file.
Not quite. Fannie and Freddie each run their own agency-specific version of asset-based qualification, with their own divisors, eligible-asset lists, and occupancy restrictions — and those rules don’t govern non-QM asset-based programs, which run on separate wholesale guidelines.
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
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 40 markets — 39 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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References
1. OCC Bulletin 2019-36 — Asset Dissipation Underwriting
2. CFPB — What is the ability-to-repay rule
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.
