Asset Depletion Mortgages in California
No job, no income documentation. The lender converts your assets into a qualifying income stream.
By Mike Basti, Licensed Mortgage Broker (NMLS #377740) · Updated September 2026
How the Calculation Works
An asset depletion mortgage converts liquid assets into a notional monthly income by dividing eligible assets across a set term. No employment, tax returns or pay stubs are required.
The mechanics are simple: total the eligible assets, apply the lender’s haircut by account type, then divide by the amortisation term the lender uses — commonly 84, 120 or 360 months. A $2,000,000 portfolio divided over 120 months yields roughly $16,600 of monthly qualifying income.
Which Assets Count, and at What Percentage
| Asset type | Typically counted at | Notes |
|---|---|---|
| Checking and savings | 100% | Must be seasoned, usually 60 days |
| Brokerage and investments | 70–90% | Haircut reflects market volatility |
| Retirement accounts, age 59½+ | 70–100% | Full access assumed |
| Retirement accounts, under 59½ | 60–70% | Reduced for early-withdrawal penalties |
| Trust assets | Case by case | Requires documented access |
| Real estate equity | Usually excluded | Not liquid |
| Business accounts | Often excluded | Unless sole owner, documented |
The divisor is what matters most
Lenders differ enormously on the amortisation term. One divides assets over 360 months, another over 84. The same $2,000,000 portfolio yields $5,555 a month at 360 months but $23,800 at 84 months — a fourfold difference in qualifying income from the same assets. Always ask which divisor a lender uses before comparing quotes.
Who These Loans Suit
Retirees with substantial savings but little taxable income. Business owners who have sold a company. Borrowers living on investments rather than salary. Those between roles with strong balance sheets. Trust beneficiaries with documented access.
The common thread is capacity that no pay stub can evidence.
Requirements
Expect 20% to 30% down, a credit score of 660 to 700 or better, and assets seasoned in the account for at least 60 days. The down payment and closing costs are generally subtracted from the asset base before the depletion calculation — you cannot use the same dollars twice.
That last point catches people out. A $2,000,000 portfolio funding a $400,000 down payment leaves $1,600,000 for the income calculation, not $2,000,000.
Asset Depletion Versus a Securities-Backed Line
Some borrowers with large portfolios consider borrowing against securities instead of taking a mortgage. That avoids selling assets but introduces margin-call risk if markets fall, and the rate is variable.
An asset depletion mortgage leaves the portfolio intact and unpledged, with a fixed rate and no margin risk. For a primary residence in California, it is usually the more conservative structure — though the comparison depends on your tax position, which is a question for a CPA.
Related Pages
Frequently Asked Questions
What is an asset depletion mortgage?
A loan that converts liquid assets into qualifying income without requiring employment or income documentation. The lender totals eligible assets, applies a haircut by account type, and divides by a set term — commonly 84, 120 or 360 months — to produce a notional monthly income.
How much income will my assets generate?
It depends entirely on the divisor. A $2,000,000 portfolio yields about $5,555 a month over 360 months but roughly $23,800 over 84 months. Because lenders differ so widely on this, always ask which amortisation term is used before comparing offers.
Which assets count toward asset depletion?
Checking and savings usually at 100%, brokerage and investment accounts at 70% to 90%, and retirement accounts at 70% to 100% if you are over 59½ or 60% to 70% if under. Real estate equity is generally excluded as illiquid, and business accounts often are too unless you are the sole documented owner.
Can I use the same assets for the down payment and the income calculation?
No. The down payment and closing costs are subtracted from the asset base first. A $2,000,000 portfolio funding a $400,000 down payment leaves $1,600,000 for the depletion calculation, not the full amount.
Do I need a job for an asset depletion mortgage?
No. That is the point of the programme — there is no employment verification, no tax returns and no pay stubs. Approval rests on the size and liquidity of documented assets plus your credit profile.
What down payment does asset depletion require?
Typically 20% to 30%, with credit minimums around 660 to 700. Assets generally need to be seasoned in the account for at least 60 days, and the lender will want two to three months of statements for every account included.
Educational information only, not a commitment to lend. Program terms vary by lender and are subject to credit approval. Figures reflect 2026 program limits. Sources: FHFA, HUD, VA, CFPB, California DRE. Sponsored by Save Financial, Inc. (NMLS #377740). California DRE #01875766. Equal Housing Lender.
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