Asset depletion loan vs. DSCR loan
Both of these skip traditional income documentation, but they draw on different strengths. An asset depletion loan turns your liquid assets — savings, brokerage, retirement — into a monthly income figure by dividing the balance over a set term, useful when you have wealth but little taxable income. A DSCR loan ignores your personal finances entirely and qualifies on whether the property's rent covers its payment.
The dividing line is the property. Buying a primary residence or second home with strong assets? Asset depletion. Buying a rental that cash-flows? DSCR.
Side by side
| Factor | Asset depletion loan | DSCR loan |
|---|---|---|
| Qualifies on | Liquid assets ÷ amortization term | Property rent (DSCR = rent ÷ PITI) |
| Personal income docs | None (asset statements instead) | None (lease / market rent instead) |
| Property type | Primary, second home, or investment | Investment / rental only |
| Down payment | 20–30% typical | 20–25% typical |
| Minimum credit | 660–700+ typical | 620–660+ |
| Rate vs. conventional | ~1–2% higher | ~1–2% higher |
Figures are representative ranges, not quotes, and vary by lender. Read the full guides: Asset depletion loan · DSCR loan.
Who should pick asset depletion loan
Borrowers with substantial liquid savings or investment accounts but low documentable income — retirees, between-ventures founders, or anyone asset-rich and income-light buying a home to live in.
Who should pick dscr loan
Real-estate investors buying a property that cash-flows, who'd rather qualify on the rental's numbers than their own — especially if they hold several financed properties or write off heavily.
Bottom line
Still deciding? Take the 5-question loan quiz, compare every option on the loan types page, or size a purchase with the affordability calculator.
FAQ
Some portfolio lenders will blend approaches — for example, using asset depletion for a primary residence while a separate DSCR loan finances a rental. On a single loan, though, you generally qualify under one method. A non-QM lender can tell you which framing approves the larger loan for your situation.
No — that's the point of both. Asset depletion uses account statements; DSCR uses the property's rent versus its payment. Neither asks for two years of tax returns, which is why both are popular with self-employed and investor borrowers whose returns understate their real capacity. Figures shown are representative, not quotes.
Educational information only — not financial advice, and not a quote, pre-approval, or offer of credit. Mortgage Merlin is a publisher, not a lender or broker.