Non-QM Income Program

Asset Depletion Loans:
Qualify on Wealth, Not Employment Income

Divide your liquid assets over 60 to 84 months to create a qualifying monthly income stream. No employment, no pay stubs, no tax return income required.

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✓ No employment income needed✓ Liquid assets verified✓ Retirees & investors welcome✓ 20% min. down

The Basics

What Is an Asset Depletion Loan?

An asset depletion loan, sometimes called an asset-based or asset-utilization mortgage, allows borrowers to qualify by converting their liquid assets into a hypothetical monthly income stream. Instead of proving employment income through pay stubs, tax returns, or bank statement deposits, you demonstrate that you hold enough liquid assets to cover the mortgage payments over the life of the loan.

The math is straightforward: the lender takes your eligible liquid assets, subtracts the down payment and closing costs, then divides the remainder by a set number of months (typically 60 to 84). The resulting figure becomes your qualifying monthly income. You never actually deplete the assets, they remain in your accounts. The calculation simply proves you have the financial capacity to sustain payments.

This is the only Non-QM program that requires zero employment income of any kind. It is built specifically for retirees, high-net-worth individuals, and anyone whose wealth is held in investments rather than flowing through a paycheck or business revenue.

Employment income required

680+

Typical min. credit score

20%

Minimum down payment

60-84

Month depletion period

Income Calculation

How Asset Depletion Income Is Calculated

The depletion formula varies slightly by lender, but the core structure is consistent. Lenders determine how much of your liquid wealth can be counted, subtract what you need for the transaction, and spread the remainder across a defined period to create your monthly qualifying figure.

The Depletion Formula

Step 1: Total all eligible liquid assets across verified accounts.

Step 2: Subtract the down payment and estimated closing costs.

Step 3: Divide the remaining balance by the depletion period (60, 72, or 84 months depending on the lender).

Example: $1,800,000 in liquid assets − $200,000 down payment − $15,000 closing costs = $1,585,000. Divided by 84 months = $18,869/month qualifying income.

Why the Period Matters

A shorter depletion period (60 months) produces higher monthly income but requires more total assets to qualify. A longer period (84 months) spreads the calculation over more time, lowering the monthly figure but making the math work with fewer assets.

Lenders offering 60-month depletion are typically more aggressive on asset requirements, while 84-month programs are more accessible for borrowers with moderate portfolios.

Retirement accounts count, but at a discount

Most lenders count 401(k), IRA, and other retirement accounts at 50% to 70% of their value because of early withdrawal penalties and tax implications. Fully liquid accounts like brokerage, savings, and money market accounts count at 100%. Structuring which accounts to present can significantly impact your qualifying income, Mortgages by Channing will optimize your asset mix for the strongest calculation.

Eligible Assets

What Counts as a Qualifying Asset?

Not all wealth qualifies for asset depletion. Lenders require assets that are liquid or near-liquid, meaning they can be converted to cash without significant delay, penalty, or loss of value. Understanding which assets count (and at what percentage) is critical to determining your eligibility.

Typically Counted at 100%

Checking and savings accountsFully liquid. Verified with 2 months of recent statements.
Money market accountsTreated as cash equivalents by most lenders.
Brokerage and investment accountsStocks, bonds, and mutual funds in non-retirement accounts. May be discounted 10 to 20% for market volatility.
Certificates of deposit (CDs)Counted at full value. Early withdrawal penalties are factored in if applicable.

Counted at Reduced Value

401(k) and traditional IRA (50 to 70%)Reduced for early withdrawal penalties and estimated tax impact.
Roth IRA (60 to 80%)Contributions may count at higher rates since they can be withdrawn without penalty.
Real estate equityNot liquid. Cannot be used for asset depletion calculation.
Business equity or private company sharesIlliquid and not verifiable at a specific value. Excluded from most programs.

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Requirements

Asset Depletion Loan Requirements

Requirement	Typical Standard
Credit Score	680+ (better pricing at 720+)
Income Documentation	None, assets only
Employment Required	No
Min. Down Payment	20%
Minimum Liquid Assets	Sufficient to cover loan via depletion formula
Depletion Period	60, 72, or 84 months (varies by lender)
Reserves	Built into asset verification
Max Loan Amount	Up to $3M+ on some programs
Property Types	Primary, second home, investment

Asset depletion programs tend to have higher credit score thresholds and down payment minimums than income-based Non-QM products. This reflects the nature of the borrower profile, high-net-worth individuals typically carry strong credit and can put down 20% or more without difficulty.

Common Questions

Asset Depletion Loan FAQ

No. The depletion calculation is purely hypothetical, it creates a qualifying income figure for underwriting purposes. Your assets remain in your accounts and you can invest, grow, or spend them as you see fit. You simply need to make your monthly mortgage payments from whatever source you choose. The lender does not monitor your account balances after closing.

Yes. Many borrowers combine asset depletion with Social Security, pension income, rental income, or part-time employment income to strengthen their qualification. The asset depletion figure supplements other documented income streams, which can help you qualify for a larger loan amount or better debt-to-income ratio.

The lender will re-verify your assets close to the closing date. If market declines have significantly reduced your account values, the qualifying income recalculation could affect your approval. To mitigate this risk, it helps to have a buffer beyond the minimum required assets. Some borrowers move a portion of investments to cash or stable-value funds during the application process.

No. While retirees are the most common borrowers, asset depletion is available to anyone with sufficient liquid assets regardless of age or employment status. Early retirees, trust fund beneficiaries, individuals between careers, and people living off investment returns are all eligible. The only requirement is having enough verified liquid assets to pass the depletion calculation.

Generally, no. Assets must be sourced and seasoned in your own accounts for at least 60 days. Gifted funds can typically be used for the down payment (with a gift letter), but the depletion calculation must be based on assets you own and have held for the required seasoning period. This prevents borrowers from temporarily inflating their balances to qualify.

Asset depletion rates are generally competitive within the Non-QM space, often comparable to or slightly better than bank statement loan rates for similar credit profiles and LTV ratios. The higher down payment requirement (20%+) and typically strong credit scores of asset depletion borrowers help offset the risk from the lack of traditional income documentation. Mortgages by Channing shops multiple lenders to find the best rate for your asset profile.

Yes, in many cases, provided the trust is revocable and you are both the grantor and beneficiary with full access to the funds. Irrevocable trusts are more complicated because the assets may not be considered accessible. The lender will review the trust documents to confirm your ability to access and control the funds. Provide the full trust agreement early in the process to avoid delays.

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Tell Mortgages by Channing about your liquid asset portfolio and the property you want to purchase. We'll run the depletion calculation and identify the strongest program for your situation.

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The Application

Apply From Your Phone In Fifteen Minutes

If your income does not fit in a W-2 box, this is the path. The application runs on your phone and reaches me the minute you submit it.

Starts with a soft credit check, so your score is never touched
Bank statements, 1099s or assets, we tell you which one fits you
Upload documents with your phone camera, no scanner needed
You hear back from Channing, not from a call center queue

If the numbers say wait, I'll tell you that too, and then we make a plan to fix whatever is in the way.

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