Updated: March 2026
An asset depletion mortgage is a Non-QM loan that converts liquid assets into qualifying income — no tax returns, W-2s, or employment verification required.
Definition: An asset depletion mortgage is a Non-QM loan that converts liquid assets into qualifying income by dividing verified assets over a set period — typically 60–84 months. Lenders use the resulting monthly figure to calculate debt-to-income ratio and maximum loan amount. No employment income, tax returns, or W-2s required.
For retirees, high-net-worth individuals, and borrowers with substantial savings but limited documented income, asset depletion is often the clearest path to mortgage qualification.
This guide breaks down the exact asset depletion loan requirements — sometimes called asset-based mortgage, asset dissipation loan, or “qualify for a mortgage using assets” programs — lenders use in 2026, and where Defy Mortgage’s program stands relative to the market.
Asset Depletion Mortgage Requirements (Quick Answer)
Asset depletion mortgage requirements in 2026:
- Liquid assets: $500K–$1M+ after down payment and closing costs
- Credit score: 640 minimum (700+ for best rates and LTV)
- Down payment: 10–25% depending on program and LTV
- Depletion period: 60–84 months (Defy uses 60 — maximizes qualifying income)
- Post-close reserves: 6–12 months PITI required after closing
These asset depletion requirements apply to most asset-based mortgage programs. Compared to conventional loans, asset depletion mortgages offer income-free qualification but typically require higher credit scores and larger down payments.
Asset depletion is not ideal for borrowers with strong documented income — conventional, bank statement, or P&L programs will typically offer better rates and lower down payment requirements in those cases.
What Is an Asset Depletion Mortgage?
An asset depletion mortgage is a Non-QM loan that uses verified liquid assets to calculate a monthly qualifying income equivalent — without requiring employment income, tax returns, or W-2s.
Lenders divide eligible assets by a set number of months to arrive at a hypothetical monthly income figure. That figure is then used to calculate debt-to-income ratio and maximum loan amount, just like a traditional income-based qualification.
Asset depletion mortgages are also known as asset dissipation loans or asset utilization loans. They are designed for borrowers who have built substantial wealth but whose taxable income — whether by design, through retirement, or due to business structure — does not support conventional mortgage qualification.
These loans do not require borrowers to liquidate their assets:
- No liquidation required — assets remain invested
- Used only for qualification, not as a repayment source
- Portfolio stays intact throughout the loan term
- Assets simply demonstrate financial capacity to repay
Asset Depletion Income Formula
The core calculation every lender uses:
(Eligible Assets − Down Payment − Closing Costs − Reserves) ÷ Depletion Period = Monthly Qualifying Income
Example at Defy (60-month depletion):
- Total eligible assets: $900,000
- Minus down payment + closing costs: $210,000
- Remaining assets: $690,000
- Divided by 60 months: $11,500/month qualifying income
Same borrower at a lender using 360 months:
- $690,000 ÷ 360 = $1,917/month qualifying income
The depletion period is the single most important variable when comparing lenders. Defy’s 60-month period generates 6x more qualifying income than lenders using a 30-year (360-month) calculation.
The 5 Core Requirements
1. Asset Minimum — How Much You Need
There is no universal asset minimum, but the amount required depends directly on the loan size. Since lenders divide assets by a set number of months to create qualifying income, larger loans require proportionally larger asset pools.
Rough guideline: To generate $5,000/month in qualifying income over 60 months, you would need $300,000 in eligible assets. For most purchase loans, borrowers typically need $500,000 to $1,000,000+ in verifiable liquid assets after accounting for the down payment and closing costs.
At Defy Mortgage, our team will review your full asset picture and calculate exactly how much qualifying income your portfolio generates before you apply.
2. Asset Calculation — How Lenders Convert Assets to Income
The formula varies slightly by lender, but the standard approach is:
Step 1: Total all eligible assets
Step 2: Apply asset-type discounts (see eligible assets below)
Step 3: Subtract down payment and closing costs
Step 4: Divide remaining assets by the depletion period (typically 60–84 months for Non-QM)
Step 5: The result is your monthly qualifying income
Example: Borrower has $900,000 in eligible assets. After $200,000 down payment and closing costs, $700,000 remains. Divided by 60 months = $11,667/month qualifying income.
The depletion period is one of the most important variables — a shorter period (60 months) generates higher monthly income than a longer period (84 or 360 months), which is why Non-QM lenders often produce better qualification than conventional programs on this product.
At Defy, we use a 60-month depletion period, which maximizes qualifying income for our borrowers.
3. Eligible Asset Types
Not all assets qualify equally. Lenders apply discounts to account for liquidity risk and market volatility.
| Asset Type | Typical Eligibility | Notes |
|---|---|---|
| Checking / savings accounts | 100% of balance | Most liquid — full credit |
| Money market accounts | 100% of balance | Treated same as savings |
| Stocks / bonds / mutual funds | 70% of balance | Haircut for market volatility |
| Retirement accounts (age 59½+) | 70–100% of balance | Full or near-full credit |
| Retirement accounts (under 59½) | 60–70% of balance | Discount for early withdrawal penalty |
| Certificates of deposit | 100% if accessible | Verify maturity date |
| Business accounts | Generally excluded | Personal assets preferred |
| Real estate equity | Generally excluded | Illiquid — not eligible |
| Cryptocurrency | Generally excluded | Volatility and liquidity concerns |
Assets must be verifiable and in accounts in the borrower’s name. Borrowed funds, pledged assets, or funds with withdrawal restrictions generally do not qualify.
4. Credit Score
Asset depletion programs typically require higher credit scores than other Non-QM products because income is inferred rather than documented.
The market standard is 640–700 FICO minimum. Programs offering higher LTV or larger loan amounts typically require 700+.
At Defy Mortgage, the minimum credit score for asset depletion programs is 640. Borrowers above 720 unlock the best rate and LTV combinations.
5. Loan-to-Value (LTV) and Down Payment
| Transaction | Market Standard | Defy Mortgage |
|---|---|---|
| Purchase — Primary | Up to 75–80% LTV | Up to 80% LTV |
| Purchase — Investment | Up to 70–75% LTV | Up to 75% LTV |
| Rate/Term Refinance | Up to 75% LTV | Up to 80% LTV |
| Cash-Out Refinance | Up to 65–70% LTV | Up to 75% LTV |
At Defy Mortgage, asset depletion loans are currently pricing at 6.250% on both purchase and refinance at 75% LTV for a 740 FICO borrower. For a full rate breakdown see our Non-QM rates page.
What Documents Are Required
Asset depletion loans require thorough asset documentation. Required documents typically include:
- Government-issued ID
- 2–3 months of statements for all eligible asset accounts
- Documentation of asset ownership (accounts must be in borrower’s name)
- Retirement account statements showing current balance and distribution status
- Investment account statements (brokerage, mutual funds)
- Property documentation (purchase contract or existing mortgage statement)
- Any documentation explaining large or recent deposits into asset accounts
Post-Close Reserves Requirement
A critical requirement that many borrowers overlook: post-close reserves.
After closing, lenders require borrowers to retain a minimum amount of liquid assets. This ensures the borrower maintains financial capacity to service the loan even if market conditions change.
Standard post-close reserve requirements range from 6 to 12 months of PITI. At Defy, reserves requirements depend on loan size, LTV, and credit score — our team will specify the exact requirement for your scenario.
Importantly, post-close reserves are separate from the assets used for qualification. The full asset picture matters: qualifying assets minus down payment minus closing costs minus required reserves equals your available depletion pool.
Asset Depletion vs DSCR vs Bank Statement Loans
| Factor | Asset Depletion | DSCR Loan | Bank Statement Loan |
|---|---|---|---|
| Income source | Liquid assets | Rental income | Bank deposits |
| Employment required | No | No | No (self-employed) |
| Best for | Retirees, HNW borrowers | Real estate investors | Self-employed business owners |
| Tax returns required | No | No | No |
| Min credit score | 640 | 640 | 640 |
| Max LTV | 80% | 85% | 90% |
For self-employed borrowers who also have strong deposit history, a bank statement loan may produce higher qualifying income. For investors financing rental properties, a DSCR loan qualifies based entirely on property cash flow. See DSCR loan requirements and bank statement loan requirements for full comparisons.
Pros and Cons of Asset Depletion Mortgages
Pros:
- No income documentation required — qualifies on assets alone
- Assets remain invested and untouched
- Available to retirees, foreign nationals, and high-net-worth borrowers
- Can be combined with other income sources (Social Security, rental income, pension)
- LLC vesting available at Defy Mortgage
- Loan amounts up to $6M
Cons:
- Higher credit score requirements than some other Non-QM programs
- Larger down payment typically required (20%+)
- Rates slightly higher than conventional mortgages
- Requires substantial liquid assets — typically $500K–$1M+ after down payment
- Volatile assets (stocks, bonds) discounted by lenders
Key takeaway: Asset depletion works best for borrowers who have built significant wealth but whose documented income doesn’t reflect their true financial capacity.
Who Should Use an Asset Depletion Mortgage?
Asset depletion mortgages are the right fit for:
- Retirees with significant savings, investments, or retirement accounts but limited Social Security or pension income
- High-net-worth individuals whose taxable income understates their true financial capacity
- Self-employed borrowers with complex financials who prefer to qualify on assets rather than income documentation
- Business owners who have accumulated wealth in investment accounts outside the business
- Foreign nationals with US-based assets but limited US income documentation
Borrowers who need to qualify based on employment income can also explore a bank statement loan or P&L loan. For investors qualifying based on rental income, see DSCR loan requirements.
How Defy’s Asset Depletion Program Compares
| Requirement | Market Range | Defy Mortgage |
|---|---|---|
| Depletion period | 60–360 months | 60 months (maximizes income) |
| Savings / checking | 100% | 100% |
| Stocks / bonds | 60–70% | 70% |
| Retirement (59½+) | 70% | 70% |
| Min credit score | 640–700 | 640 |
| Max LTV (purchase primary) | 75–80% | Up to 80% |
| Max loan amount | $3M–$4M | Up to $6M |
| Interest-only option | Some lenders | Available |
| Foreign nationals | Limited availability | Available |
| Current rate (740 FICO, 75% LTV) | Market varies | 6.250% |
Common Mistakes When Applying for an Asset Depletion Mortgage
1. Not accounting for post-close reserves
Many borrowers calculate qualifying income from their full asset pool — then get surprised when the lender requires 6–12 months of reserves to remain after closing. Always subtract reserves before calculating depletion income.
2. Including ineligible assets
Business accounts, real estate equity, and cryptocurrency are generally excluded. Only personal liquid assets in verifiable accounts count.
3. Underestimating the depletion period impact
A lender using 360 months generates six times less monthly income than one using 60 months. Defy’s 60-month period maximizes qualifying income — this is one of the most important variables when shopping lenders.
4. Not combining income sources
Asset depletion income can be layered with Social Security, pension, rental income, or part-time income. Many borrowers qualify for significantly larger loans by combining sources.
5. Providing incomplete statements
All asset statements must be complete — every page, including pages marked “intentionally left blank.” Missing pages can delay or derail approval.
Frequently Asked Questions
What is an asset depletion mortgage?
An asset depletion mortgage is a Non-QM loan that converts liquid assets into a monthly qualifying income equivalent. Lenders divide eligible assets by a set depletion period to calculate income — no employment, tax returns, or W-2s are required. Borrowers do not need to liquidate their assets to qualify.
How much do I need in assets to qualify?
The amount depends on your loan size and the lender’s depletion period. At a 60-month depletion period, every $100,000 in eligible assets generates approximately $1,667/month in qualifying income. Most borrowers need $500,000 to $1M+ in assets after down payment and closing costs to generate sufficient qualifying income for a typical purchase.
What credit score is required for an asset depletion loan?
Most lenders require 640–700 FICO. Defy Mortgage requires a minimum of 640 for asset depletion programs. Higher scores unlock better rates and higher LTV options.
Do I have to spend my assets to qualify?
No. Asset depletion mortgages do not require you to liquidate or spend your assets. Your portfolio remains invested and intact — lenders simply use the asset balance as evidence of financial capacity, not as a repayment source.
Which assets are eligible?
Checking accounts, savings accounts, money market accounts, and CDs typically count at 100%. Stocks, bonds, and mutual funds count at 70%. Retirement accounts count at 70% for borrowers over 59½ and 60–70% for younger borrowers. Business accounts and real estate equity are generally excluded.
Can I combine assets with other income?
Yes. Asset depletion income can be combined with other qualifying income sources — Social Security, pension, rental income, or part-time employment — to strengthen the overall application and qualify for a larger loan.
Is asset depletion a good mortgage option?
Asset depletion is an excellent option for borrowers who have built significant wealth but whose documented income — due to retirement, business structure, or tax strategy — doesn’t support conventional qualification. If your assets significantly exceed what your income suggests, asset depletion often produces better qualification than any income-based program.
How fast can I close with an asset depletion mortgage?
Most asset depletion loans close in 21–30 days with complete documentation. Clean files — organized asset statements, no missing pages, clear account ownership — move fastest. Defy Mortgage’s underwriting team is experienced with complex asset profiles and can often provide same-day pre-qualification.
For current Non-QM rates on asset depletion loans, see our live rate page. For a comparison of income documentation options, see bank statement loan requirements or P&L loan requirements.
For a full comparison of all Non-QM qualification methods, see our Non-QM loan requirements guide.
Ready to Qualify Using Your Assets?
Most borrowers are surprised by how much loan they qualify for when their full asset picture is properly calculated — especially at a 60-month depletion period.
Get a same-day asset depletion qualification — no obligation, soft credit pull only. Schedule your asset depletion loan consultation with Defy Mortgage — we’ll calculate your qualifying income and tell you exactly what you qualify for.
