Asset Depletion Loans: Everything High-Net-Worth Homebuyers Need to Know About Asset Depletion Loans

For high-net-worth individuals whose income may not reflect the true strength of their financial position, traditional mortgage qualification methods can fall short. That’s where Asset Depletion Loans come in—a flexible financing solution that turns liquid assets into qualifying income. Here’s everything you need to know about this unique mortgage option.

What is an Asset Depletion Loan?

An Asset Depletion Loan allows borrowers to use their liquid assets—such as savings, investments, and retirement accounts—to qualify for a mortgage, instead of relying solely on traditional income streams like a salary. Lenders calculate a hypothetical income based on the value of those assets, giving affluent buyers more borrowing power without the need for steady employment income.

Key Benefits of an Asset Depletion Loan

• Leverages Wealth Instead of Income: Ideal for retirees, business owners, or individuals with substantial investments but limited regular income.

• No Need for Traditional Employment: Qualify based on financial strength rather than paystubs.

• Maintains Liquidity: Borrowers can avoid liquidating assets to purchase real estate.

• Flexible Loan Options: Available for primary residences, second homes, and investment properties.

• Can Be Used for Jumbo or Conventional Loans: Often paired with jumbo financing for high-end properties.

• Privacy and Discretion: Allows high-net-worth individuals to maintain privacy over their income structure while still qualifying for premium real estate purchases.

Asset Depletion Loan Requirements

• Minimum Asset Threshold: Typically $1 million or more in liquid assets (requirements vary by lender).

• Acceptable Assets Include:

  • Bank savings accounts

  • Stocks, bonds, mutual funds

  • Retirement accounts (some lenders use a percentage of retirement assets)

  • Trust funds

• Credit Score: Typically 700+ for best terms.

• Debt-to-Income Ratio: Lenders calculate a hypothetical income based on asset value divided over a set number of months (often 60 to 120 months).

• Down Payment: 10%-30% depending on property value and lender.

• Cash Reserves: Additional reserves may still be required beyond the assets used for qualification.

• Age Consideration: Some programs may offer more favorable terms for retirees or older borrowers relying on investment income.

How Asset Depletion Income is Calculated

Lenders take the total qualifying liquid assets and divide that amount by a set term (such as 60, 84, or 120 months) to create a monthly "income" figure. This imputed income is then used to calculate how much mortgage the borrower can afford.

Example:

If you have $2,000,000 in qualified assets and the lender uses a 120-month divisor:

$2,000,000 ÷ 120 months = $16,666.67 in monthly qualifying income.

Note: Different lenders use different divisor periods and may consider varying percentages of different asset classes (for example, 70% of retirement accounts).

Who is an Asset Depletion Loan Best For?

• Retirees with significant savings but little to no income

• Entrepreneurs with fluctuating or non-traditional income

• Investors who prefer to keep capital invested rather than cashing out

• High-net-worth individuals seeking privacy or flexibility

• Individuals who have recently liquidated a business or asset but are not yet receiving regular income

Property Types for Asset Depletion Loans

• Luxury single-family homes

• Condos and townhomes

• Vacation homes

• Investment properties

• Second residences

• Multi-unit residential properties (2-4 units)

Asset Depletion Loan Considerations

• Interest Rates: May be slightly higher than standard conventional rates.

• Liquidity Required: Must maintain sufficient assets post-closing.

• Tax Implications: Using retirement accounts may have tax considerations depending on the type of account.

• Underwriting Scrutiny: Documentation and asset verification are thorough.

• Market Risk: If assets used to qualify decrease in value, borrowers must ensure they still meet financial obligations.

• Global Assets: Some lenders may allow consideration of foreign-held assets for globally diversified clients.

• Blended Qualification: Some borrowers may combine limited employment income with asset depletion calculations to enhance borrowing power.

Steps to Getting an Asset Depletion Loan

1. Evaluate Assets: Review the total value of liquid, acceptable assets.

2. Choose the Right Lender: Not all lenders offer asset depletion programs.

3. Prepare Documentation: Asset statements, tax returns, identification.

4. Get Pre-Approval: Know your purchasing power before shopping.

5. Select Property & Close: Proceed through appraisal, underwriting, and closing.

   
   

Quick Asset Depletion Loan Snapshot:

Final Thoughts

An Asset Depletion Loan offers a smart, strategic path to homeownership for individuals whose financial strength lies in their assets rather than traditional income. By using wealth as a foundation for qualification, this loan type opens doors to luxury properties without sacrificing liquidity or long-term investment growth.

Asset depletion loans are particularly useful for those who value financial privacy, investment flexibility, and the ability to leverage wealth in creative ways. With the right lender and expert guidance, you can secure a luxury property that reflects your success without compromising your financial strategy.

If you’re interested in learning whether an Asset Depletion Loan is right for your next home purchase in Atlanta or anywhere nationwide, I’d be happy to help you explore the possibilities.

Contact Kereen HenryLuxury Associate Broker | Keller Williams 404-210-1674 | www.kereenhenry.com