Asset depletion loan
A non-QM program that converts liquid assets into qualifying income using a formula: eligible assets ÷ loan term in months (typically 360 for a 30-year loan). A borrower with $720,000 in liquid assets could be credited with $2,000/month of qualifying income with no employment income required.
How it works in practice
The formula is the whole program: eligible assets divided by a term equals monthly qualifying income. The common divisor is 360 (a 30-year horizon) — $1,080,000 of eligible assets reads as $3,000 a month. Some programs divide by 120 or even 84, tripling or quadrupling the income the same portfolio produces, which makes the divisor the single most important number to shop.
"Eligible" does real work in that sentence. Cash and equivalents typically count at 100%; brokerage securities are haircut to roughly 70–80% for market risk; retirement accounts commonly count at 60–70% and may be excluded before age 59½ when withdrawals would trigger penalties. Funds must usually be seasoned and unencumbered — recently borrowed money and pledged accounts don't qualify. Two lenders can read the same portfolio $2,000 a month apart.
The profile it serves is specific: retirees before or between structured income streams, founders after a sale, investors whose wealth compounds outside W-2 systems. Down payments run 20–30% and pricing sits modestly above conventional. Depletion income can also stack with documented income — social security plus a depletion stream, for example — to bridge a DTI gap rather than carry the whole file.
Common questions
Do I actually have to withdraw the money each month?
No — that's the point. The formula imputes income from capacity; no drawdown schedule is imposed. Your portfolio stays invested and under your control; the lender simply verified it could sustain the payment for the loan's horizon.
What assets don't count?
Typically: unvested equity, funds borrowed for the purpose, pledged or margined balances, business operating accounts, and often crypto (lender-specific). Retirement funds face age-based rules. Every program publishes an eligibility grid — read it before assuming your number.
Related terms
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Sources
Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.