The answer first
An asset depletion loan (asset depletion mortgage) is a Non-QM mortgage that qualifies you on your liquid assets instead of your income. If you are wealthy on paper but light on documented income — a retiree living off a portfolio, a founder after an exit, a business owner whose returns show deductions rather than income — a conventional lender sees too little income and says no. An asset depletion loan divides your eligible liquid assets by a set number of months and treats the result as your monthly qualifying income.
At Defy, an asset depletion loan qualifies on liquid assets only — savings and checking accounts, investment portfolios (stocks, bonds, mutual funds), and retirement accounts such as IRAs and 401(k)s depending on age — divided by as little as 60 months. No tax returns are required, and no income or employment documents are required. The minimum FICO is 640, loans go up to 80% LTV with no maximum loan amount, and fixed-rate, adjustable-rate, and interest-only structures are available. Asset depletion is available for primary residences and second homes only — not investment properties.
If your wealth sits in your balance sheet rather than your income statement, asset depletion is usually the cleanest path. If your deposits tell a stronger story than your asset balances, a bank statement loan may qualify you for more. We offer both, and we will tell you honestly which one fits your file.
Defy’s asset depletion loan specs
| Spec | Defy asset depletion loan |
|---|---|
| Qualifying basis | Total eligible liquid assets, divided by as little as 60 months, treated as monthly qualifying income |
| Eligible assets | Liquid assets only: savings and checking accounts; investment portfolios (stocks, bonds, mutual funds); retirement accounts (IRAs, 401(k)s) depending on age |
| Assets NOT counted | Non-liquid assets — real estate, business equity, collectibles — are not counted for asset depletion (they belong to asset-based / asset mortgage products, which Defy does not offer) |
| Tax returns / income / employment documents | Not required |
| Minimum FICO | 640 |
| Max LTV | Up to 80% |
| Max loan amount | No maximum loan amount |
| Occupancy | Primary residence and second home only — NOT investment property |
| Loan structures | Fixed-rate, adjustable-rate, interest-only |
How the asset depletion math works
The calculation is simple, and that simplicity is the point:
Eligible liquid assets ÷ 60 months = monthly qualifying income.
That monthly figure is then used the way a salary would be used — measured against the proposed mortgage payment and other debts to determine what you can afford.
Illustrative example (not a promise of terms): a borrower with $2,400,000 in eligible liquid assets qualifies on $2,400,000 ÷ 60 = $40,000 per month of qualifying income. A borrower with $1,200,000 in eligible liquid assets qualifies on $1,200,000 ÷ 60 = $20,000 per month. The exact divisor, eligible-asset treatment, and LTV depend on the file — “as little as 60 months” is the wording we publish, and the divisor can vary by scenario.
What we need from you:
- Statements for your liquid asset accounts — bank accounts, investment portfolios, and retirement accounts where applicable.
- Standard credit, property, and down-payment documentation for the loan itself — asset depletion replaces the income documentation, not the rest of the file.
What we do not need: tax returns, W-2s, 1099s, pay stubs, or employment verification. That is the whole point of the program.
Who an asset depletion loan is for
Asset depletion is built for borrowers whose wealth is real but whose documented income is thin:
- Retirees living off investment portfolios and retirement accounts, with little or no W-2 or pension income on paper.
- Founders and business sellers after an exit, sitting on liquidity-event proceeds with no new income documentation yet.
- High-net-worth borrowers whose income is paper-light — dividends and portfolio growth that do not read as conventional employment income.
- Self-employed borrowers whose tax returns understate their means, where even a bank statement or P&L path is messier than the balance sheet itself.
An asset depletion loan fits when:
- You have substantial liquid assets and limited documented income.
- You are buying or refinancing a primary residence or second home.
- Your asset statements are clean, seasoned, and verifiable.
An asset depletion loan is not an investment-property program. If the property is an investment property and the rent covers the payment, a DSCR loan — which qualifies on the property’s cash flow, not yours — is the right tool instead.
Asset depletion vs. bank statement vs. P&L vs. DSCR — which one fits?
| Situation | Best fit |
|---|---|
| Wealth in the balance sheet, thin documented income (retiree, post-exit founder) | Asset depletion — qualifies on liquid assets ÷ 60 months, up to 80% LTV, no tax returns |
| Self-employed, strong deposits, books less tidy | Bank statement loan — qualifies on 12–24 months of deposits, up to 90% LTV, no tax returns |
| Self-employed, clean books, messy deposits (lump sums, seasonal swings, multiple accounts) | P&L loan — qualifies on a 12- or 24-month P&L with a CPA, EA, or CTEC letter, up to 90% LTV |
| Investment property, rent supports the payment | DSCR loan — qualifies on the property’s cash flow, min 0.75 DSCR, up to 85% LTV on purchases, 14–21 day closes |
| Conventional income, clean tax returns | A conventional path may be cheaper — we will say so rather than sell you a Non-QM loan you do not need |
The honest framing is which tool fits the constraint, not which loan we want to sell. We underwrite all four, so there is no incentive to force your file into the wrong program.
Asset depletion loan scenarios
The retiree buying the next home. A retired couple holds $1,800,000 across brokerage and retirement accounts but reports little taxable income. A conventional lender sees the returns and declines the amount. On asset depletion, $1,800,000 ÷ 60 = $30,000 per month of qualifying income, and the purchase of their primary residence qualifies on the balance sheet they actually have.
The founder after an exit. A founder sells the business and holds the proceeds in liquid investments while deciding what comes next. There is no salary, no new business income, and no two-year history to document — but there is a seven-figure liquid balance. Asset depletion qualifies the second-home purchase on that balance, without waiting for a new income story to exist.
The borrower choosing between asset depletion and bank statement. A business owner has both strong deposits and a strong portfolio. If the deposits are steady and high, a bank statement loan may reach 90% LTV where asset depletion caps at 80%. If the deposits are lumpy — a few large wires, seasonal swings — the asset balance is the steadier story, and depletion wins on cleanliness even at the lower LTV. We run both and show you the difference.
Asset depletion loan FAQs
What is an asset depletion loan?
An asset depletion loan is a Non-QM mortgage that qualifies you using your liquid assets instead of your income. The lender divides your eligible liquid assets by a set number of months — at Defy, as little as 60 months — and treats the result as your monthly qualifying income.
Do I need tax returns for an asset depletion loan?
No. At Defy, an asset depletion loan does not require tax returns, income documents, or employment verification. Asset statements are the income document.
What assets count for an asset depletion loan?
Liquid assets only: savings and checking accounts, investment portfolios (stocks, bonds, mutual funds), and retirement accounts such as IRAs and 401(k)s depending on age. Real estate, business equity, and collectibles do not count — those belong to asset-based products, which are a different loan type.
How much do I need in assets to qualify?
It depends on the loan size: the math is eligible assets ÷ 60 months = monthly qualifying income, and that income must support the payment. Defy publishes no minimum asset amount.
What credit score do I need for an asset depletion loan?
Defy’s minimum FICO for asset depletion is 640.
How much can I borrow with an asset depletion loan?
There is no maximum loan amount at Defy, up to 80% LTV. The loan amount is governed by the asset math and the property value, not by a program cap.
Can I use an asset depletion loan for an investment property?
No. At Defy, asset depletion is for primary residences and second homes only. For investment properties, a DSCR loan — which qualifies on rental cash flow rather than your assets — is the right program.
Asset depletion or bank statement — which is better?
It depends on which document tells the truer story. If your liquid balances are strong and steady, depletion is usually cleaner. If your deposits are stronger than your balances, a bank statement loan usually qualifies you for more — and reaches up to 90% LTV. We offer both and will run your file against the one that fits.
Does Defy publish an asset depletion rate?
No. Asset depletion pricing is scenario-based — it moves with credit score, LTV, and property type — and we do not publish an asset depletion rate floor.
Get an asset depletion loan quote
Ready to see where your file lands? Call (615) 622-1032 to talk through your asset depletion scenario with a Defy loan advisor.
Are you a broker? We work with mortgage brokers nationwide, and we also run a TPO channel where brokers can submit a scenario at Defy TPO — that’s the fastest way to get pricing and guidance on a file. Or call (615) 622-1032.
