Convert liquid and retirement assets into qualifying income by dividing total assets across an amortization period. Ideal for retirees, high-net-worth borrowers, and those who choose to live off investment portfolios rather than W-2 income.
An asset depletion loan (also called "asset utilization" or "asset dissipation") is a Non-QM program that converts your liquid and retirement assets into qualifying monthly income for mortgage qualification. The lender takes your eligible assets, applies a use-factor (typically 70–100% based on account type and age), and divides by an amortization period (usually 120 months / 10 years) to produce a monthly qualifying income figure.
The product is designed for high-net-worth borrowers whose lifestyle is funded by investment portfolios rather than salary. Common profiles: retirees living off 401(k) and brokerage accounts, business sale proceeds parked in liquid investments, trust beneficiaries, semi-retired professionals winding down employment income, and high-asset international clients moving to Texas.
The math: (Eligible Assets × Use Factor) ÷ Amortization Months = Monthly Qualifying Income. Example: $2,000,000 in brokerage and IRA accounts × 80% use factor = $1,600,000 ÷ 120 months = $13,333/mo qualifying income. This income figure then runs through standard DTI calculation against the new mortgage payment plus existing debts.
High-net-worth Texans whose liquid and retirement assets dramatically exceed their reported income. The classic profile: $2M+ in investment accounts, $0–$80K reported W-2/SE income, buying a $700K–$1.5M Texas home. Conventional fails on income; asset depletion converts the portfolio into qualifying income.
| Tier | Asset Use Factor | Min Credit | Max LTV — Purchase | Max LTV — Cash-Out | Typical Rate |
|---|---|---|---|---|---|
| Premium | 100% liquid, 100% retirement (post-59½) | 740+ | 80% | 75% | 7.875% |
| Standard | 100% liquid, 80% retirement | 700–739 | 80% | 75% | 8.000% |
| Standard-2 | 90% liquid, 75% retirement | 680–699 | 75% | 70% | 8.250% |
| Tier-3 | 80% liquid, 70% retirement | 660–679 | 70% | 65% | 8.625% |
| Account Type | Use Factor (Most Lenders) | Notes |
|---|---|---|
| Checking / Savings | 100% | Most aggressive — fully liquid |
| Brokerage (taxable) | 100% | Vested, accessible without penalty |
| Money Market / CDs | 100% | Penalty-free at maturity → 100% |
| Roth IRA (post-59½) | 100% | No tax penalty, fully accessible |
| Traditional IRA (post-59½) | 100% | RMDs already started |
| 401(k) / IRA (pre-59½) | 70–80% | 10% penalty + tax → reduced factor |
| Pension / Annuity (vested) | 70–80% | Withdrawal restrictions |
| Restricted stock / RSU (vested) | 60–70% | Liquidity timing risk |
| Real estate equity | NOT counted | Not "liquid" enough |
| Cryptocurrency | 0–60% (rare) | Volatility hurts — most lenders exclude |
*Post-59½ retirement accounts often counted at 100%. Pre-59½ counted at 70–80% to account for the 10% early withdrawal penalty plus ordinary income tax. CDs and money markets at 100%, brokerage 100% if not pledged as collateral elsewhere.
April 2026 illustrative rates. Contact Ethan for current pricing.
68 yo · $2.2M in brokerage + IRA · No W-2
52 yo · Sold tech co · $4.5M proceeds · No income yet
58 yo · $1.4M in 401k + $300K brokerage · Pre-59½
45 yo · $3M trust + $400K personal · Modest W-2
63 yo · $1.6M brokerage · 720 credit · Texas 50(a)(6)
Strong W-2 · $200K assets · Buying $750K home
| Check | Why It Matters |
|---|---|
| Account ownership | Borrower must have legal access — joint OK, "owned by spouse only" not eligible without joinder |
| Vesting / withdrawal restrictions | RSUs vesting in 2 years not fully eligible; pension before vesting not eligible |
| Margin loans / pledged collateral | Net value used — $1M brokerage with $300K margin loan = $700K eligible |
| Recent large deposits | Source documented — must be earned income, gift (with letter), or sale proceeds (with HUD-1 or contract) |
| Cryptocurrency | Most lenders exclude entirely; a few count at 60% with 60-day seasoning |
| Real estate equity | Not counted as "liquid asset" for asset depletion — separate cash-out refi if equity needed |
If you're 58 and planning a home purchase that requires asset depletion, waiting until age 59½ can be worth it. Pre-59½ retirement assets count at 75–80%; post-59½ at 100%. On a $1M IRA, that's $1M qualifying ÷ 120 = $8,333/mo income vs $750K ÷ 120 = $6,250/mo income — a 33% increase in qualifying income just from waiting 18 months. For borderline files, this single timing decision can make or break the deal.
*Liquid 100%, post-59½ retirement 100%, pre-59½ retirement 75%. Standard 120-month amortization. Texas 50(a)(6) homestead cash-out adds additional rules.
NEXA accesses 200+ wholesale lenders. Below are the top Non-QM partners for this program.
Asset depletion has the widest pricing spread of any Non-QM product because each lender uses a different amortization period (120 vs 240 months) and use-factor methodology. The same $2M asset profile can produce $16,667/mo qualifying income at one lender and $8,333/mo at another. NEXA shops Deephaven (best premium-tier pricing), Angel Oak (most flexible), Newfi (lowest credit thresholds), and Flagstar (Texas 50(a)(6)) simultaneously to find the best fit for each profile.
| Factor | Asset Depletion (Non-QM) | Conventional | FHA |
|---|---|---|---|
| Income Documentation | Asset balances qualify | Tax returns + W-2 / SE | Tax returns + W-2 / SE |
| Tax Returns Required? | NO | Yes (2 yrs) | Yes (2 yrs) |
| Min Credit | 680 | 620 | 580 |
| Typical Rate | 7.875–8.25% | 6.5–7.0% | 6.5–7.0% |
| Max LTV — Purchase | 80% | 97% | 96.5% |
| Max LTV — Cash-Out | 75% | 80% (TX 50(a)(6)) | 80% |
| Mortgage Insurance | None (above 80% LTV) | PMI if >80% | Lifetime MIP |
| Best Profile | High-asset, low-income | W-2 employee or strong returns | Limited down / lower credit |
Asset depletion typically prices 1.0–1.5% above conventional. The premium is worth paying when:
Borrowers often assume their $1.5M IRA counts dollar-for-dollar. It doesn't — pre-59½ retirement assets count at 70–80% to account for the 10% early withdrawal penalty plus ordinary income tax. Solution: If you're close to 59½, run the math on whether waiting helps. The factor jump from 75% to 100% can add hundreds of thousands to qualifying assets.
A $2M brokerage account with a $400K margin loan = $1.6M eligible assets, not $2M. Many borrowers forget margin balances when running pre-qualification math. Solution: Pay down margin loans 60+ days before applying if possible, or expect the qualifying income to reduce by margin/120 per month.
$500K hits your account from a business sale 30 days before applying — underwriter requires documentation (HUD-1, sale agreement, 1099-S). Without docs, that $500K may be excluded as "unsourced." Solution: Document all large deposits BEFORE applying. Have sale documents, gift letters, or beneficiary distribution letters ready.
Most asset depletion lenders exclude cryptocurrency entirely (or accept at 60%). A borrower with $800K in BTC/ETH may find their qualifying assets dropped by $480K+ vs their expectation. Solution: Convert crypto to brokerage / liquid assets 60+ days before applying if you want the full asset count.
A $3M trust where someone else is trustee = $0 qualifying for asset depletion. The borrower must have legal authority to access the assets. Solution: Provide trust documents at application showing your authority. Beneficiary-only positions (no trustee role) typically don't qualify.
Standard reserves requirement (3–6 mo PITIA) is automatically satisfied by the asset depletion structure since you're already documenting substantial assets. No additional reserves needed. Solution: Don't separately set aside reserves — the same asset pool serves both qualifying income calculation AND reserve requirement.
Asset depletion cash-out on Texas homestead is still subject to 50(a)(6) — 80% LTV cap, 12-day notice, 2% closing-cost cap, in-person closing, spousal joinder. Solution: Use Flagstar or another Texas-50(a)(6)-experienced wholesale partner for asset depletion cash-out on TX homestead. Build the 12-day notice into closing timeline.
A $4M asset pool produces $33K/mo qualifying income on paper — but if your actual living expenses are $25K/mo plus the new mortgage, you're depleting assets faster than the loan amortizes. Solution: Stress-test against true cash flow needs, not just qualifying math. Asset depletion qualifies you; sustainability is your responsibility.
Send Ethan your statement balances (savings, brokerage, IRA, 401k) and he'll model qualifying income across multiple lender formulas. Free 24-hour analysis.
