What Is Asset Depletion (Asset-Based Qualifying)?

Short answer

Asset depletion is a way to qualify for a mortgage by converting your eligible assets into a monthly income figure, usually by dividing them by the loan term in months. Fannie Mae allows it for certain employment-related assets, like 401(k)s and IRAs: net assets divided by the amortization term, so $750,000 over 360 months is $2,083.33 a month (as of October 2026). Non-QM lenders offer broader versions, and their rules vary by lender.

Definition

An underwriting method that treats a portion of verified assets as if it were monthly income, so borrowers with large savings but little regular income can show the ability to repay.

Worked example

Example only, Fannie Mae method: a 66-year-old retired buyer has a $900,000 IRA, with no early-withdrawal penalty assumed in this example. She will use $150,000 of it for down payment, closing costs and required reserves, so net documented assets are $750,000. Divided by a 360-month term, qualifying income is $2,083.33 a month. Because she is at least 62, the maximum LTV is 80% instead of 70%.

Fannie Mae rules for employment-related assets

Per Fannie Mae Selling Guide B3-3.4-06 (dated March 4, 2026):

• Eligible assets: 401(k), IRA, SEP and Keogh accounts, plus a non-self-employed severance or lump-sum retirement package
• Not eligible: stock options, non-vested stock, lawsuit, lottery, real estate sale, inheritance or divorce proceeds, virtual currency, and checking or savings unless the money came from an eligible asset
• Formula: eligible assets, minus any penalty on a full distribution, minus funds used for down payment, closing costs and reserves, divided by the loan's amortization term in months
• Limits: purchase or limited cash-out refinance, primary or second home, maximum LTV 70%, or 80% if the asset owner is 62 or older
• You must have unrestricted access to the funds, and any co-owner of the assets must be a borrower on the loan

Non-QM asset depletion

Non-QM asset programs can count a wider range of liquid assets, such as brokerage accounts and cash, and some can be combined with other income. The divisor, the percentage of retirement or stock accounts counted, the minimum assets, down payment and pricing all vary by lender. We compare options from 100+ lenders. Rates vary daily; call for today's pricing. Approval is subject to credit and underwriting.

In South Florida

Asset-based qualifying is common in Miami among retirees who live off savings, business owners between liquidity events, and buyers with wealth held abroad. Fannie Mae's version does not cover most of these cases, since plain savings, stock sales and inheritances are not eligible assets. That is where non-QM loans come in. For foreign buyers, also see foreign national loans.