An asset depletion mortgage — also called an asset qualifier or asset-based mortgage — allows a borrower to qualify for a home loan without relying on paycheck stubs, tax returns, or any recurring employment income. Instead, the lender converts a borrower’s eligible liquid assets into a hypothetical monthly income stream and uses that figure to satisfy debt-to-income requirements. The assets themselves are not pledged as collateral; they simply serve as the basis for an income calculation.
This product exists because the conventional income documentation system was designed around W-2 earners. It has no clean mechanism for a retired surgeon, a founder who closed a successful exit twelve months ago, or an investor whose wealth is parked in a diversified brokerage account. Asset depletion fills that gap.
Estimates only. Actual rate, term, and qualification depend on lender underwriting, appraisal, and complete documentation review.
How the income calculation works
The core mechanic is straightforward: take the eligible asset balance, apply any required haircuts, and divide by a term — commonly 180 months (15 years) or occasionally the actual loan term — to produce a monthly qualifying income figure. A frequently used convention looks like this:
Eligible liquid assets × 70% ÷ 180 months = monthly qualifying income
A worked example with round numbers:
- Total eligible liquid assets: $2,000,000
- After 70% factor: $1,400,000
- Divided by 180 months: ≈ $7,778 per month
That $7,778 monthly figure is then used exactly as a W-2 monthly gross income would be — it drives the debt-to-income ratio alongside the proposed mortgage payment and any other monthly obligations.
Important: The 70% factor and 180-month divisor above represent one commonly cited convention for illustrative purposes only. Individual lenders may apply different haircuts, different divisors, or both. This is not a rate quote, income guarantee, or approval indication. Contact a Q Mortgage specialist for the calculation methodology that applies to your specific file.
Which assets typically count — and at what discount
Not all account types are treated equally. A general framework (specifics vary by lender):
| Asset type | Typical treatment |
|---|---|
| Checking and savings accounts | Near full value; minimal or no haircut |
| Certificates of deposit (CDs) | Near full value if not under early-withdrawal penalty |
| Taxable brokerage accounts | Discounted, often 70–80% of current balance |
| Retirement accounts (IRA, 401k, etc.) | Further discounted, often 60–70%, to reflect tax liability and early-withdrawal exposure |
| Business operating accounts | Generally excluded — commingled funds lack clean personal ownership |
| Primary-residence equity | Excluded; illiquid and not readily convertible without selling the home |
| Gift funds or borrowed assets | Excluded; the income stream must come from the borrower’s own accumulated wealth |
Seasoning matters as much as account type. Most lenders require assets to have been in the borrower’s name for a defined period — commonly 60 to 90 days — before the calculation date. A large deposit that appeared last month will prompt questions about its source and whether it is truly the borrower’s to deploy.
Who the asset depletion mortgage fits
The borrower this product was designed for looks something like this:
The recently retired professional. A physician, attorney, or corporate executive who spent decades accumulating a substantial retirement and brokerage portfolio. Monthly Social Security may be modest; pension income may not exist. Yet a seven-figure investment account produces more than enough theoretical income to support a mortgage payment, if the lender has a mechanism to recognize it. Doctors in particular frequently encounter this dynamic when relocating near retirement or downsizing after a long career.
The founder post-exit. A business owner who sold a company and received the proceeds as a lump sum. Twelve months after closing, they may show little taxable income on a return — but the liquidity is substantial. The gap between what a tax return shows and what the bank account reflects is precisely where asset depletion operates.
The portfolio investor or real estate professional. An investor living off dividend income, capital gains distributions, or rental cash flow — income types that may be irregular, hard to document consistently, or lower on paper than the underlying asset base suggests. Real estate agents who have accumulated investment portfolios while their commission income fluctuates year to year are another common case.
In each scenario, the common thread is a borrower whose balance sheet is strong and whose income statement understates their financial position.
Asset depletion vs. ATR-in-full
These two products are sometimes confused because both rely on assets rather than income. The distinction is meaningful:
Asset depletion converts eligible assets into an imputed monthly income stream. The assets remain in the borrower’s accounts; the income figure is a calculation, not a draw. The underwriter is asking: if you spread these assets across a loan term, could they support the payment?
ATR-in-full — the Ability-to-Repay in Full standard — evaluates whether the borrower holds assets large enough to cover the entire loan balance outright, or to cover a defined multiple of the loan. It is a balance-sheet solvency test, not an income test.
A borrower with $2 million in assets and a $500,000 loan request might qualify under either framework, but the analysis, documentation, and lender requirements differ. Asset depletion is generally the more widely available option; ATR-in-full is a specific product with specific thresholds that not every lender offers.
What underwriters verify
Regardless of how the calculation is structured, underwriters focus on four things:
Ownership. Assets must be titled to the borrower (or jointly, with appropriate attribution). Trust-held accounts require review of the trust documents. Business accounts that comingle personal and operating funds are typically disqualified.
Seasoning. Two to three months of statements demonstrating the assets were present and stable before application. A sudden large inflow — a wire from a family member, a business distribution, the recent sale of another asset — will need to be sourced and may need its own seasoning period before it qualifies.
Eligibility of the account type. The lender’s matrix defines which account types qualify at what haircut. Assumptions about retirement accounts being counted at full face value are usually wrong.
Reserve sufficiency. This is the element that surprises some borrowers: the assets used in the income calculation are often not the same assets available for post-closing reserves. Many lenders require that the borrower retain a defined number of months of payments in liquid reserves after funding, separate from whatever pool was used to derive the income figure. A borrower who qualifies on $2 million but has exactly $2 million should expect lender questions about reserve depth.
How this compares to other Non-QM income paths
For self-employed borrowers who still have business revenue flowing through accounts, bank statement programs or a P&L-only mortgage may be more efficient — they allow the income from ongoing operations to do the qualifying work rather than requiring a large accumulated asset base. The 1099-only program serves independent contractors and freelancers whose compensation is documented through tax forms.
Asset depletion occupies the end of the spectrum where employment-linked income has stopped or become incidental. The question it answers is not “how much are you earning?” but “do you have enough accumulated wealth that repayment is not a genuine concern?”
Understanding how bank statement income is computed can help frame the contrast: both programs derive a qualifying income figure from financial accounts, but bank statement programs measure cash flow activity while asset depletion measures accumulated balance.
Determining whether asset depletion is the right vehicle — and structuring the asset documentation to present your balance sheet in the strongest eligible form — is a conversation worth having before you apply. Talk to a Q Mortgage specialist about your situation and whether this product fits your file.
Estimates only. Actual rate, term, and qualification depend on lender underwriting, appraisal, and complete documentation review.