Asset Depletion Mortgages In Napa — The Quick Read: Asset depletion turns a borrower’s liquid balance sheet into a monthly qualifying-income figure, used instead of traditional personal-income documentation or pay stubs. It works when someone holds real money but shows thin taxable income — retirees, business sellers, investors with heavy write-offs. The math runs through a divisor, and that divisor is the single biggest variable across lenders.
Note on scope: this article covers national program mechanics, not a Napa-specific regulatory framework. No state or county rule changes how asset depletion math works — the mechanics below apply the same way everywhere a lender offers the product.
What Is an Asset Depletion Mortgage?
This is a qualification method, not a separate loan category. Here’s how it works: a lender takes a borrower’s eligible liquid assets, applies a discount to volatile account types, and divides the remaining balance by a set number of months. That monthly number then gets treated exactly like wage income when calculating debt-to-income.
The OCC Bulletin 2019-36 gives the clearest federal description of how this works. It defines asset dissipation underwriting as a way to calculate “a hypothetical cash annuity stream” from an applicant’s assets, which gets added to any other income when evaluating repayment capacity. The bulletin is aimed at banks, not at setting a formula. It tells institutions to write their own policy on eligible assets, eligible transactions, and discounts. That’s why two lenders can look at the same brokerage statement and land on two different qualifying numbers.
Key Terms Defined
Asset depletion (or asset dissipation): converting a portion of liquid assets into a monthly income figure that feeds a standard debt-to-income calculation.
Asset utilization: a close cousin term some lenders use interchangeably with asset depletion — same mechanics, different label.
Assets-only qualification: a separate structure with no income and no DTI calculation at all — eligibility is based on the asset pool covering the loan amount and costs directly, not on a monthly-income conversion.
Divisor: the number of months a lender divides eligible assets by to produce the qualifying monthly figure. Shorter divisors produce higher qualifying income; longer divisors preserve more asset value on paper but produce less monthly credit.
Haircut: a discount applied to a volatile or restricted asset class — retirement funds, securities — before the divisor is applied.
How the Math Actually Runs, Step by Step
The process is five steps, and skipping any one of them is where files get denied.
Step one is the asset inventory. The lender identifies eligible accounts — checking, savings, brokerage or investment holdings, retirement accounts — and confirms none of it is encumbered, borrowed, or scheduled for imminent withdrawal.
Step two is verification. Custodian statements establish the balance, typically two months per account, and the lender confirms the funds actually belong to the borrower and aren’t a recent, unexplained deposit.
Step three is discounting. Retirement accounts commonly get reduced for early-withdrawal exposure if the borrower is under 59½, and non-retirement securities often take a volatility haircut. Cash counts closest to full value; everything else gets shaved.
Step four is the divisor. The discounted balance is divided by a set number of months to produce a monthly figure. This is where lender philosophy shows up — there is no regulatory number, so the divisor is entirely a matter of individual program design.
Step five is the DTI feed. The resulting monthly figure drops into the standard debt-to-income calculation and functions exactly like W-2 wages or self-employment income from a return.
Documentation for a typical file: two months of statements per counted account, a letter explaining any large recent deposit or transfer, two years of traditional personal-income documentation (used to confirm no hidden income source, not to calculate qualifying income), government ID, and standard property paperwork.
Why the Divisor Is the Whole Ballgame
The divisor decides more than any other single input in the file. A shorter divisor converts the same asset pool into a bigger monthly income number, which can push a marginal DTI file into approval range. A longer divisor produces a smaller monthly figure but implies the borrower is drawing down assets more slowly — a more conservative read of the same balance sheet.
Across the wholesale network Lendmire places files with, divisor choice and haircut treatment vary meaningfully by lender and by program. On its asset-allowance structure, one path divides liquid assets by 36 months when used to supplement other income and the resulting debt-to-income stays at or below 60%, another divides by 60 months when DTI runs above that line, and a third divides by 84 months when the asset income stands alone or the loan tops $3,500,000. Retirement accounts count at 70% of balance, stepping up to 80% once the borrower is 59½ or older. Business funds, gift funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count in this structure.
There’s also a separate assets-only path with no DTI calculation at all — eligibility runs on whether liquid U.S. assets equal the loan amount plus closing costs plus sixty months of any net loss carried on other residential property the borrower owns.
Where This Sits Against Bank-Statement and DSCR Financing
Asset depletion, bank-statement income, and DSCR loans each solve a different problem. Mixing them up is the most common strategic mistake investors make. A separate source gives asset-based qualification its legal foundation in consumer mortgages: the CFPB Ability-to-Repay Summary. It lists assets as one of eight acceptable underwriting factors alongside income. Assets aren’t a substitute for income — they’re their own standalone category.
| Structure | What Qualifies the Borrower | Best Fit |
|---|---|---|
| Asset depletion | Liquid assets converted to imputed income | High net worth, low taxable income (retirees, sellers) |
| Bank-statement income | 12-24 months of deposits, minus an expense ratio | Self-employed with real cash flow, low reported profit |
| DSCR | The property’s own rent versus its payment | Rental acquisitions, portfolio scaling |
For a purchase or refinance of a primary residence, someone sitting on substantial liquid wealth but limited W-2 or 1099 income may need asset depletion or a bank-statement path to qualify — that’s a personal-qualification problem. For an investment property, a DSCR loan is usually the more direct tool, because it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, rather than tying up a large personal asset pool. Lendmire’s complete DSCR loans guide walks through that mechanism in full.
On the bank-statement side of the same wholesale network, qualifying income comes from 12 or 24 consecutive months of personal or business statements. You divide eligible deposits by the statement count, after applying an expense ratio. That ratio scales up with headcount and business type: it’s lower for a service business with no employees, moderate for a small team, and higher for larger staffs or product-based businesses. There’s also a profit-and-loss method, capped as a share of stated income. Transfers from the borrower’s own business into a personal account count in full.
What the Loan Sizes and Leverage Actually Look Like
Across the two wholesale ladders Lendmire’s network places these files through, sizes run from $300,000 to $30,000,000 — a portfolio non-QM program carries files to $6,000,000, and a bank-portfolio program carries twelve-month-statement files to $30,000,000 on its own separate ladder: 65% at or below $5,000,000, 60% at or below $10,000,000, and 55% up to $30,000,000, interest-only capped at 60% or the band’s ceiling, whichever is lower.
On a primary residence, leverage through select programs steps down as the loan grows: up to 90% at $300,000 to $1,000,000, easing to 85% through $2,000,000, 80% through $3,000,000, and down toward 75% at the top credit tier through $4,000,000. Above $4,000,000, every file moves to case-by-case review before submission — never treat that as a flat percentage. Above that line the bank program’s own ladder takes over, at 65%, 60%, and 55% as the loan size climbs. Second homes and investment properties generally run about five points lower at every size band on this structure.
Credit floors sit at 660 on the portfolio program, rising to 700 above the super-jumbo threshold near $3,500,000 on a primary or $3,000,000 on a second home or rental. Debt-to-income can run to 50%. Reserve requirements scale with loan size: three months of payments up to $500,000, six months up to $1,500,000, and nine months above that, plus two additional months per other financed property to a twelve-month cap. First-time rental investors are generally held to twelve months regardless of loan size.
Cash-out is available without a stated proceeds cap at or below 60% LTV on the portfolio program, with a $1,500,000 cash-in-hand ceiling above that line. The bank program carries no published cash-out cap of its own. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A Worked Scenario, Modeled Assumptions Only
Picture an investor with a diversified brokerage account and a modest IRA, a few years past a corporate exit, now living mostly off portfolio value instead of a paycheck. Let’s assume — purely as a modeled example, not a cited figure — that after discounting the retirement funds and applying a mid-length divisor, the monthly figure comfortably clears the debt-to-income threshold for a primary-residence purchase in the mid-seven-figure range. From there, this figure runs through the same underwriting as wage income. Reserves are checked separately from the qualifying pool. Credit is verified against the applicable floor. The file then proceeds through standard property review. None of this requires the investor to spend down the account — the assets stay in place, and the lender is modeling a hypothetical stream, not requiring liquidation.
If that same investor were financing a rental property instead of a home to live in, the more direct route is usually a DSCR loan. This loan is sized to the property’s own rent-to-payment ratio — a completely separate calculation from anything above.
Where the General Rule Breaks
A handful of edge cases trip up borrowers who assume asset depletion works the same way everywhere.
Concentrated portfolios draw more scrutiny than diversified ones. A single-stock position, even a large one, typically gets a bigger haircut or added underwriting caution than a spread-out brokerage account.
Illiquid assets generally don’t count. Equity in other real estate, private business ownership stakes, and unvested restricted stock are commonly excluded from the eligible pool because they can’t be converted to a reliable repayment stream on short notice.
Above roughly $4,000,000, files move to manual, case-by-case underwriting rather than a published matrix — every leverage figure at that size is a ceiling reviewed individually, never a guaranteed number.
Frequently Asked Questions
Does asset depletion mean the lender liquidates my portfolio?
No. The assets generally stay exactly where they are — in the borrower’s own accounts. The lender is calculating a hypothetical monthly stream for qualification purposes, not requiring an actual sale or withdrawal.
Is asset depletion the same as assets-only qualification?
No, and this is a common mix-up. Asset depletion converts assets into a monthly income figure that still runs through standard debt-to-income math. Assets-only skips DTI entirely — eligibility is based on the asset pool covering the loan amount and costs directly.
Does being under retirement age disqualify my IRA or 401(k)?
Not entirely. Age can reduce how much of a retirement account counts toward the qualifying pool, since early-withdrawal exposure factors into the discount, but it doesn’t remove the asset class outright. On the structure described above, retirement funds count at 70% of balance generally, moving to 80% at 59½ and older.
Can I use asset depletion to buy a rental property instead of a home to live in?
It’s possible, but a DSCR loan is usually the more direct fit for a pure rental purchase, since it qualifies primarily on the property’s own rent covering its payment rather than requiring a personal asset pool as the qualifying input.
Why do two lenders give me different qualifying numbers from the same statements?
Because the divisor and the discount percentages are lender-specific, not regulated. A shorter divisor and lighter haircuts produce a higher monthly qualifying figure; a longer divisor and heavier discounts produce a lower one from the identical account balance.
If a rental purchase or refinance is the actual goal rather than a personal residence, Lendmire can help compare DSCR loan options based on the property’s income, credit profile, leverage, and investor goals — reach the team at 828-256-2183 or through Lendmire’s mortgage quote form.
For investors comparing this against DSCR structures used elsewhere in Lendmire’s coverage, the asset depletion mortgages in Ohio piece walks through the same mechanics applied to a different buyer profile.
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
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 40 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB Ability-to-Repay Summary
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Depletion Mortgages In Newport Beach: Assets, Not Income · Asset Depletion Mortgages In Iowa: Which Assets Count · Asset Depletion Mortgages In Westlake: Assets, Not Income
Guides: Super Jumbo Bank Statement Loans in Napa, CA · Super Jumbo Bank Statement Loans in California
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.