Asset Depletion Loans for Investment Property: Qualify With Your Savings

An asset depletion loan lets you qualify for a mortgage with the money in your accounts instead of a paycheck. Total Quality Lending takes your eligible assets, subtracts what the purchase will use, and divides the rest by 84 months. That monthly figure is your qualifying income, and it can buy an investment property with no employment income at all.

Your books don’t decide this. If you own a business, your tax return shows what your CPA built it to show, which is as little taxable income as the law allows. Your brokerage statement tells a different story. Most lenders read the return and stop there. Total Quality Lending’s asset utilization mortgage, also called an asset depletion loan, reads the balances instead.

How does asset depletion income work?

The formula has 3 steps, and none of them involve a projection or a forecast.

1. Total Quality Lending documents your eligible assets from your custodians’ statements and applies the eligible percentage to each account.
2. The down payment, out-of-pocket closing costs and required reserves come off the top.
3. The remainder is divided by 84 months, or 7 years, to produce monthly qualifying income.

For example, $840,000 of eligible assets left after closing funds and reserves works out to $10,000 a month in qualifying income.

The accounts stay yours. Asset depletion is a qualifying calculation, not a withdrawal schedule, so you don’t sell positions or move money into a new account to make it work. A dollar can only do one job, though. Money that funds your down payment and reserves comes out before the division, so plan the purchase and the qualifying income together.

What assets count toward an asset depletion loan?

Each kind of account counts at its own percentage on Total Quality Lending’s asset utilization mortgage.

• Cash and cash equivalents count at 100%. That covers eligible checking, savings and money-market accounts, plus qualifying short-term U.S. Treasuries.
• Stocks, bonds and mutual funds count at 70%. The discount reflects that market value moves.
• Retirement accounts count at 70% at age 59½ or older, and 60% below that age. That includes 401(k) and IRA balances, subject to each account’s eligibility and access rules.

Every account needs its documentation and 90 days of seasoning before it counts.

Some holdings never count. Privately traded, restricted and non-vested stock is ineligible, which matters if a large share of your net worth is equity in a company that hasn’t gone public. An asset whose income is already counted elsewhere in your file can’t be counted a second time.

Real estate equity doesn’t feed the formula either, because it isn’t a financial asset you can document on a statement. If most of your wealth sits in a property you own, a cash-out refinance on that property turns the equity into liquid funds, and those proceeds become assets.

Can you combine asset depletion with other income?

Yes. Asset depletion can be your only qualifying income, or it can stack on top of W-2, 1099, profit-and-loss or bank statement income on the same application. When you stack it, the minimum asset requirement is waived.

Stacking is where business owners usually land. A bank statement loan qualifies you on 12 or 24 months of deposits, which measures what the business brings in now. Asset depletion measures what you’ve already accumulated. Put them together and the file reflects both.

What credit and history do you need?

The asset utilization mortgage carries tighter credit requirements than Total Quality Lending’s other alternative documentation paths.

• Minimum Fair Isaac (FICO) credit score of 680. Total Quality Lending uses the lowest score across all borrowers on the loan as the decision score.
• Housing history of no more than one 30-day late payment in the last 12 months.
• At least 36 months since any bankruptcy, foreclosure, short sale or deed-in-lieu.

Loan amounts run from $150,000 to $3M. Investment properties and second homes are both eligible.

Who asset depletion fits

The business owner who pays themselves a modest draw. Profit stays in the company or your brokerage account, the return shows a small number, and every income-based lender treats you as a problem. Asset depletion measures what you’ve built rather than what you reported.

The recent business seller. You sold the company, the proceeds sit in your accounts, and there’s no paycheck yet. A lender reading tax returns sees a gap. Asset depletion sees the balance.

The retiree buying a rental. Your living costs come out of a portfolio, not a salary. That same portfolio can carry the qualifying income for an investment property.

The early employee whose company went public. Vested, publicly traded shares count at the securities percentage once they’ve seasoned. Stock that is still restricted or unvested does not.

If the property’s rent covers the payment on its own, a debt service coverage ratio (DSCR) loan qualifies on the property alone, with no personal income documentation at all. If you’d rather use your personal income plus the property’s projected rent, the Hybrid Investor Loan does that. Part of the guidance is telling you which of these fits before you apply.

If you’re a full-time investor shopping on rate alone, that’s a fair thing to want, and there are lenders built for it. Total Quality Lending is built for the investor who wants the whole picture handled, and we price for that work.

What Total Quality Lending does before you apply

Everyone in this industry owns one piece and hands you the rest. We put the pieces together for you.

Before you commit to anything, Total Quality Lending runs the deal analysis at no cost. That covers cash-flow and rental projections, DSCR and return-on-investment modeling, and AirDNA data pulled on purchases. You see whether the property works before the asset calculation ever matters.

Total Quality Lending is a direct lender with its own underwriters, so structuring the asset depletion figure is the first conversation, not a surprise in week three. The cost is one flat fee covering underwriting and processing, with no points and no origination fee.

Income pays for your life. Assets change your family’s trajectory. An asset depletion loan puts the assets you’ve already built to work on the next one.

Call (800) 304-1925 or build your investment plan to see what your statements qualify you for.