Asset-Based Mortgage Qualification 2026: How Asset Depletion Income Works

Asset depletion, also called asset dissipation, is a qualification method that converts a borrower's liquid assets into an imputed monthly income. It is designed for borrowers with significant assets but limited or no current income: retirees, recently sold business owners, or high-net-worth individuals who live on portfolio distributions. The calculation is straightforward but lender-specific rules vary.

Standard Asset Depletion Calculation

Take total verified liquid assets, subtract the required down payment and closing costs, then divide the remaining balance by the remaining loan term in months. A borrower with $1,500,000 in liquid assets, $200,000 down, and $15,000 in closing costs has $1,285,000 remaining. Divided over 360 months on a 30-year loan, that produces $3,569 per month in imputed income.

Eligible Asset Types

• ✦Checking and savings accounts: 100% of balance counts
• ✦Brokerage and investment accounts: 70% of balance (20-30% haircut for market volatility)
• ✦Retirement accounts for borrowers under 59.5: 60-70% of balance due to early withdrawal penalty
• ✦Retirement accounts for borrowers 59.5+: 70-100% depending on lender
• ✦Vested stock options: typically not eligible
• ✦Business accounts: typically not eligible unless borrower owns 100% of the business and CPA confirms access

Fannie Mae and Freddie Mac Rules

Both GSEs allow asset depletion income. Fannie Mae requires assets to be sufficient to cover the loan payment for at least 36 months. Freddie Mac uses a similar approach. The calculation methodology must be documented in the file. DU and LP AUS systems consider asset depletion income when input correctly in the loan origination system.

Non-QM Asset Depletion Programs

Non-QM lenders often have more flexible asset depletion programs: shorter amortization periods in the denominator (e.g., dividing by 120 months instead of 360 for a 30-year loan), higher eligible asset percentages, or acceptance of gift assets in some cases. These programs carry rate premiums of 100-200 bps over agency. LTV caps are typically 75-80% on primary and 65-70% on investment.