Asset Depletion Loans: Qualify on Your Savings
Some people have spent decades building a nest egg and now hear a frustrating no from the bank: not enough monthly income. A retiree living off savings, or someone who sold a business and is between ventures, can have plenty in the bank and still fail a standard income test. An asset depletion loan fixes that mismatch by treating your savings as the income they really are.
Quick answer
An asset depletion loan lets you qualify using your savings and investment accounts instead of a paycheck. The lender takes your eligible assets, divides them over a set number of months, and counts the result as monthly income — even if you never actually withdraw the money. It's built for retirees and high-asset, low-income buyers who have the funds to afford a home but don't show traditional earnings on paper.
What you'll learn
- How savings get converted into qualifying income
- The basic formula lenders use
- Who this loan is designed for
- Which accounts typically count
Turning Savings Into Income
The whole idea is simple: if you have enough money saved to comfortably handle a mortgage, you should be able to use it to qualify — even without a steady paycheck. An asset depletion loan does that by converting a chunk of your savings into a monthly income figure the lender can count. You're not pledging the money or being forced to spend it. The lender is just using a formula to translate a large balance into the kind of monthly number a normal loan would get from a pay stub.
How the Formula Works
Lenders take your eligible assets and spread them across a set period to get a monthly figure. The exact divisor varies by program, but here's the shape of it:
- Add up your qualifying assets — savings, brokerage, and retirement accounts.
- Subtract any funds being used for the down payment and closing costs.
- Apply the lender's discount to certain accounts (retirement and stocks are often counted at a portion of their value).
- Divide the remaining total by the program's number of months to get your monthly qualifying income.
As a rough illustration, $1,000,000 in eligible assets spread over a long horizon can translate into a meaningful monthly income — your loan officer runs your real numbers against the specific program.
Who It's Built For
This loan solves a specific problem: lots of assets, little reportable income. A few people who fit it well:
- Retirees living off savings and investments rather than a salary.
- Business owners who recently sold and are sitting on the proceeds.
- High-net-worth buyers whose income is mostly on paper, not in monthly cash flow.
- Anyone who could clearly afford the payment but doesn't pass a standard income check.
What Counts and What to Bring
Liquid, accessible accounts carry the most weight — checking, savings, money market, and brokerage funds. Retirement accounts often count too, though lenders may use a percentage of the balance, and sometimes only if you're close to the age you can withdraw without penalty. Home equity and business assets usually don't count. Plan to provide recent statements for every account you want considered. If you have strong savings but a thin income picture, send us your statements and we'll show you what they translate to — in English or Spanish, no obligation.
Key takeaways
- Your assets, not a paycheck, create the qualifying income.
- You don't have to actually withdraw the money to qualify.
- It's a strong fit for retirees and recently cashed-out business owners.
- Liquid accounts count most; some are discounted before the math.
Common questions
Do I have to spend or withdraw my savings to qualify?
No. The lender uses a formula to convert your balances into a monthly income figure on paper. The money stays yours — you're not required to withdraw it or pledge it to get the loan.
Which accounts can I use?
Liquid accounts like checking, savings, money market, and brokerage carry the most weight. Retirement accounts often count too, sometimes at a discounted percentage. Home equity and business assets generally don't qualify.
Is this only for retirees?
No, though retirees are a common fit. It also works for people who sold a business, have large investment balances, or otherwise hold plenty of assets but don't show much monthly income on paper.
Can I combine asset depletion with other income?
Often yes. Many borrowers blend asset-based income with Social Security, a pension, or part-time earnings to qualify. We can map out the strongest combination for your situation.
How much down payment will I need?
It varies by program and your overall profile, but since it's a non-standard loan, expect a meaningful down payment. Your assets, credit, and the property all factor into the final figure.