Asset Depletion Mortgage: How to Qualify on Assets Instead of Income

Plenty of Bay Area buyers have significant savings but not much income on paper. A recent retiree living off investments, a founder who sold a company, or someone taking time between jobs can easily afford a mortgage payment and still not qualify the usual way. An asset depletion mortgage solves that by letting savings and investments count as income.

This guide walks through how it works, what the numbers look like, which accounts count, and why the choice of lender makes such a difference.

An asset depletion mortgage lets someone qualify for a home loan based on savings and investments instead of a paycheck. The lender adds up the eligible accounts, sets aside what’s needed to buy the home, and spreads the rest over a set number of months. That monthly amount counts as income.

It goes by a few other names, including asset dissipation and asset-based qualifying. Nothing has to be sold, and no withdrawals have to start. The math simply shows that the savings could cover the payment over time.

The calculation is simpler than it sounds. Start with the total in eligible accounts. Set aside the down payment, closing costs, and a cushion the lender wants left over after closing. Then divide what remains by a set number of months. The result is the monthly income the lender counts.

The number of months is where loan programs differ, and fewer months means more income from the same savings. Here’s how $2,400,000 left over after closing works out under each option:

That difference matters. With $13,333 a month in counted income, a lender would generally allow around $6,000 a month in total debt payments, including the new mortgage. The same savings at 360 months support about half that. Income from Social Security, a pension, rental property, or part-time work can be added on top.

A rough estimate takes a few minutes. Add up savings, investment, and retirement balances. Subtract the planned down payment, an estimate of closing costs, and about six months of the expected house payment. Divide what’s left by 180 for a traditional loan, or by 60 to 120 for a Non-QM loan. That number, plus any other income, is a good starting point for what a lender would count.

Fannie Mae allows this using retirement accounts and similar work-related funds, like a severance payout. It spreads the money over the full length of the loan, 360 months on a 30-year mortgage, which makes it the most conservative option.

Freddie Mac made its version much more flexible in August 2026. It now spreads savings over 180 months instead of 240, which raises counted income by about a third. It also dropped its age 62 requirement for using bank and brokerage accounts, removed the requirement to put at least 20% down, and opened the option to rental properties. Lenders can use the new rules now, and all lenders must follow them starting February 3, 2027.

There are a couple of catches. Bank and brokerage accounts generally need to have been in place for 12 months, and at least $30,000 has to be left over after closing. Freddie Mac’s version also only works on loans up to $1,249,125 in most Bay Area counties for 2026.

Non-QM lenders write their own rules, and many spread savings over a much shorter period, some using a 60-month amortization. That produces the most income from the same savings, and it’s usually the main option for larger loans when there’s no paycheck income. Rates tend to run higher than traditional loans, and minimum savings, credit scores, and down payments vary by lender. Our ultimate guide to Non-QM mortgages explains these loans in more detail.

Lenders look for money that’s clearly owned and easy to access. In general:

How long the money has been there matters too. Lenders look for seasoned liquid reserves, which simply means funds that have sat in the account for a while. Large recent deposits need a paper trail, and money received as a gift can’t be counted. Our post on gift of equity guidelines covers how gifts work elsewhere in a purchase.

This option fits people with a lot saved compared with the income that shows up on paper. In the Bay Area, that often means recent retirees who haven’t started drawing from their accounts, founders and early employees after a company sale, and people taking a planned break from work. It can also help self-employed buyers whose tax returns show low income after write-offs but who have substantial savings.

There are other options when savings aren’t the main strength. Our guide to no income verification mortgage options in California compares asset depletion with bank statement loans and other alternatives, and investors buying rentals can look at DSCR loans, which qualify based on the rent instead.

Asset depletion mortgage lenders don’t all apply the same rules, even for the same type of loan. Some have already switched to Freddie Mac’s new 180-month approach and some haven’t. Non-QM lenders differ on how many months they use, how they value retirement accounts, and how large a loan they’ll make. On a jumbo loan, those differences can add up to a big change in what someone qualifies for.

That’s where working with a broker helps. Because we draw on access to a wide range of lenders, we can match a specific set of accounts to the lender that counts them most favorably.

Does the money have to be spent down?

No. The calculation is only used to qualify. The savings can stay invested, and the mortgage can be paid from any source.

Can this be used to buy a $1 million home?

Yes, as long as the savings support the payment. Our guide to what it takes to buy a $1 million home in California shows how the payment and income math works at that price.

Is this only for retirees?

No. Freddie Mac no longer has an age requirement for bank and brokerage accounts, and most Non-QM lenders don’t have one either.

We start by listening: what’s in the accounts, how long it’s been there, what other income is coming in, and what price range feels right. From there, we run the numbers under each option that fits and draw on access to a wide range of lenders to find the loan best suited to the purchase.

Sources: Freddie Mac Bulletin 2026-10 (August 5, 2026), accumulated assets as income; Fannie Mae guidelines on employment-related assets as qualifying income; FHFA 2026 conforming loan limits; individual Non-QM lender guidelines, which vary. This article is general information, and program rules change, so details should be confirmed for each loan.

Mike Trejo (NMLS #339128) is the Broker/Owner of Bridgepoint Funding (NMLS #1005764), a residential mortgage brokerage based in Pleasant Hill, California. With more than 20 years of experience in the mortgage industry, Mike has helped thousands of borrowers navigate the home loan process, including many healthcare professionals and travel nurses with non-traditional income profiles.

Mike founded Bridgepoint Funding in 2006 and is consistently ranked among the Top 1% of Mortgage Loan Originators nationwide. Reach out at (925) 478-8630 or visit bpfund.com.