Asset Depletion Mortgages In Healdsburg — The Quick Read: These loans convert liquid assets — brokerage accounts, retirement funds, cash — into a monthly income number a lender can underwrite against, instead of relying on traditional personal-income documentation or W-2s. A borrower with a large portfolio but modest reported income divides eligible assets by a set number of months to produce qualifying income. No liquidation happens; the money stays invested. The programs matter most for retirees, business sellers, and self-employed borrowers whose returns understate real wealth.
Asset depletion isn’t a Healdsburg-specific product. No city has its own version of this math. But you’ll find the borrower profile that uses it — wine-country business owners, retirees who sold a company, self-employed professionals with heavy deductions — in high-value markets everywhere. The mechanics behind qualifying deserve a plain explanation.
What Is an Asset Depletion Mortgage, Exactly?
It’s a way to turn a balance sheet into an income statement for underwriting purposes. A lender takes eligible liquid assets, applies a discount for volatility or early-withdrawal risk, subtracts what’s needed for the down payment and closing costs, then divides the remainder by a set number of months. The result gets treated like monthly income.
The OCC Bulletin 2019-36 calls this practice asset dissipation underwriting, and it tells banks to build written policy around it — assuming either no rate of return on the assets or a well-supported one based on quality, liquidity, and price volatility. That’s a safety-and-soundness rule for banks. It doesn’t set a divisor. Each program picks its own. Assets count as one of the named factors a lender can verify and rely on.
Key Terms Defined
Asset dissipation underwriting (ADU): the OCC’s term for calculating a stream of usable funds from a borrower’s assets, in addition to any employment income.
Divisor period: the number of months a lender divides qualifying assets by to produce a monthly income figure — shorter divisors produce higher qualifying income, longer divisors produce lower.
Seasoning: the length of time funds must sit in an account, undisturbed, before a lender will count them.
Asset qualifier: a structure where asset math sets a required residual-income threshold instead of feeding a debt-to-income ratio.
Expense ratio: in bank-statement lending, the percentage of gross deposits assumed to be business overhead before the remainder counts as qualifying income.
Key Takeaways
- Assets don’t get liquidated — the calculation is modeled, not a cash-out event.
- Down payment, closing costs, and reserves come off the top before any income gets calculated.
- Divisor periods vary by program; there’s no single national number.
- Business account balances generally don’t count unless moved to a personal account and seasoned.
- Retirement funds usually count at a discount, and age can change how much counts.
How the Calculation Actually Works, Step by Step
The math runs in a fixed order, and skipping a step is where borrower back-of-envelope numbers go wrong.
1. Identify eligible assets. Checking, savings, money market, mutual funds, and publicly traded stocks and bonds are the standard categories.
2. Apply a discount by asset type. Depository accounts typically count near full value. Marketable securities get discounted for volatility. Retirement funds carry their own discount, often tied to the borrower’s age and access rights.
3. Subtract funds needed to close. Anything earmarked for down payment, closing costs, or required reserves comes out of the pool before income gets calculated — this is the step most people forget when they estimate their own number.
4. Divide by the program’s divisor. This is a fixed number of months set by the lender’s guidelines, not something a borrower negotiates deal by deal.
5. Feed the result into either a DTI test or a residual-income test. Some programs add the figure into a debt-to-income ratio. Others use it only to confirm enough monthly cushion exists after the payment — two different underwriting architectures wearing the same name.
6. Document and verify. Statement continuity matters more than a single high balance. Funds sitting in the same account for a stretch of time read better to underwriting than a lump sum that shows up the month before application.
Across Lendmire’s wholesale network, the asset-based paths sit alongside — not instead of — bank-statement qualification, and the two often get compared on the same file when a borrower has both a strong deposit history and a substantial portfolio.
The Structures and Variations That Exist
There isn’t just one asset depletion product. There are at least two underwriting shapes, and lenders have several ways of sizing which assets count. Every residential mortgage has to satisfy the CFPB’s Ability-to-Repay rule — even one built on asset depletion. This rule requires a lender to make a reasonable, good-faith determination that the borrower can repay the loan.
Standalone asset qualification. The asset math alone produces the qualifying income, without regard to any other income source. This is the version built for someone with no reportable income at all — recently retired, or living entirely off investment gains.
Supplemental asset allowance. The asset-derived figure gets added on top of other documented income, boosting what a borrower already qualifies for rather than carrying the whole file. Through select lenders in Lendmire’s wholesale network, this shows up as an asset allowance calculated by dividing liquid assets by 36 months when the borrower’s overall debt-to-income sits at or below 60%, by 60 months when it runs above that, or by 84 months when the allowance stands alone or the loan amount exceeds $3,500,000 — available on primary residences and second homes, up to 80% loan-to-value, subject to underwriting.
Assets-only qualification. No DTI ratio gets calculated at all. Instead, the borrower needs U.S.-based liquid assets equal to the full loan amount plus closing costs plus sixty months of any net loss on other residential real estate they own. This is the version built for a borrower who wants underwriting to look almost entirely at the balance sheet.
Retirement account treatment differs sharply by age in select network guidelines. Retirement funds generally count at 70% of value. That rate steps up to 80% once the borrower turns 59½ or older, since early-withdrawal risk drops. Some funds never count toward the asset pool in these programs, no matter how large the balance is: business funds, gift funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency.
Where the General Rule Breaks
A few situations don’t follow the basic playbook, and missing them causes the most borrower confusion.
Business ownership isn’t the same as personal cash. Owning 100% of a company doesn’t make its bank balance usable for income calculation. The funds have to move into a personal account and season there before they count. This trips up business owners constantly — they assume control equals access.
Gifts, inheritances, and windfalls need time. A large inheritance or lottery-style windfall generally isn’t eligible the day it lands. Once it’s fully seasoned and sitting in the borrower’s own account, it can eventually be treated like any other liquid asset — but not on arrival.
Cryptocurrency doesn’t count for income calculation. It may occasionally be usable for a down payment or reserves under certain program rules, but it’s excluded from the depletion math itself, in Lendmire’s network and broadly across non-QM guidelines.
Naming isn’t standardized. “Asset depletion” and “asset utilization” don’t mean the same math from lender to lender. One program’s conservative, long-divisor calculation might carry the same label as another’s richer, shorter-divisor version. A borrower comparing two lender quotes needs to confirm which calculation is actually behind the number, not assume the term means one thing everywhere.
Investment property use is program-dependent. Some asset-based products stay limited to primary residences and second homes. This is a big part of why DSCR loans, not asset depletion, do most of the heavy lifting for actual rental property purchases — a DSCR loan is reviewed primarily on the property’s own rental income covering the payment, subject to lender guidelines, rather than on the borrower’s personal balance sheet at all. Lendmire’s complete DSCR loans guide walks through that qualification path in full.
The Investor Decision in Practice
Say you’re buying an actual rental property. The practical question usually isn’t “should I use asset depletion or DSCR.” Instead, you need to understand that these two tools solve different problems. Asset depletion is typically a personal-residence or second-home tool. It’s useful when a retiree or business seller wants to buy a home without liquidating a portfolio. DSCR loans are the tool for the rental property itself. They qualify based on the lease or market rent covering the payment — not the buyer’s income or assets at all.
Here’s where the two approaches truly overlap. Say a borrower’s rental coverage runs a little light — for example, a property that clears somewhere under 1.00x on rent alone. Certain programs in Lendmire’s wholesale network may still consider this borrower if strong liquid assets back up the file as a compensating factor. Leverage and terms adjust accordingly, and availability depends on the specific lender and file. This isn’t the same as a formal asset depletion calculation. But it relies on the same documentation discipline: clean statements, seasoned funds, and no unexplained deposits.
Sizing on the high end of this world runs wide. Through select wholesale programs, Lendmire’s network carries files from $300,000 up to $30,000,000 across two structures: a portfolio non-QM program to $6,000,000, and a separate bank-portfolio program that uses twelve months of statements and its own leverage ladder — 65% to $5,000,000, stepping to 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% loan-to-value or the band’s own ceiling, whichever is lower. On a primary residence, leverage steps down as the loan gets larger: as high as 90% loan-to-value up to $1,000,000, tightening through the mid-size bands, down to roughly 65% once a loan crosses $4,000,000 — and everything above $4,000,000 goes through case-by-case review before it’s ever submitted. Second homes and investment properties run about five points lower than the primary-residence figures at comparable sizes.
For the bank-statement side of these files, you need 12 or 24 months of statements in a row. Transfers from a borrower’s own business into a personal account count at full value. This detail matters for business owners. Without it, their company deposits could get left out of the asset calculation entirely.
Frequently Asked Questions
Do I have to sell my investments to qualify this way? No. The calculation is modeled — a lender divides a discounted asset balance by a set number of months to produce a qualifying income figure, but nothing actually gets withdrawn or sold to close the loan.
Does every dollar in my account count toward income? No. Different asset types get discounted differently, funds needed for closing and reserves come out first, and several categories — business accounts, gift funds, cryptocurrency, unvested stock — generally don’t count at all.
Can I combine asset-based income with other income sources? Often, yes. Supplemental asset allowance structures add the calculated figure on top of other documented income rather than replacing it, which is different from a standalone calculation used when a borrower has no other reportable income.
Is this the same thing as a DSCR loan? No. Asset depletion looks at the borrower’s personal balance sheet; DSCR loans qualify primarily on the rental property’s own income covering the payment, subject to lender guidelines. Investors buying rental property typically use DSCR loans, sometimes with strong liquid assets serving as an added compensating factor. Lendmire’s asset depletion coverage for Winter Park and its Sanibel guide work through similar borrower scenarios in other markets.
What if my wealth is tied up in a business I own? Business account balances generally aren’t eligible for the income calculation as-is — the funds need to move into a personal account and season there first, even at 100% ownership.
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
2. CFPB Ability-to-Repay/QM Rule
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.
