How it works
The lender takes your eligible assets and divides them over a set period to create a monthly income figure. That income is then used to qualify you, just like a paycheck would be. You do not actually have to spend down your accounts.
Assets that may count
- Checking and savings accounts
- Brokerage and investment accounts
- Retirement accounts like 401(k)s and IRAs, sometimes at a reduced percentage
- Money market accounts and CDs
Who this fits best
A lot of people move to Tampa Bay at the point in life where their income drops but their net worth is strong. A traditional lender looks at a small Social Security check and says no. An asset depletion loan looks at the whole picture. It can also be combined with other income like pensions or Social Security.
Things to know
Asset depletion loans are usually non-QM, so pricing is typically higher than conventional. Some agency programs also allow a version of this, so it is worth checking both. The assets used generally need to be seasoned in your accounts, and lenders will want to see recent statements.
Common questions
Do I have to sell my investments to qualify?
No. The calculation is just a way to show you have the means to make the payment. Your money stays invested.
Can I combine asset depletion with my pension or Social Security?
Yes. Many lenders let you combine asset based income with other income sources to qualify.
Can I use this to buy a second home in Florida?
Yes. Asset depletion can be used for primary residences, second homes and sometimes investment property depending on the lender.
All loans subject to credit approval, property eligibility, and underwriting guidelines. Not all borrowers will qualify. Program terms and availability can change without notice. This is not a commitment to lend.