High-net-worth individuals, retirees, venture-backed founders, and transitioning professionals often possess substantial liquid wealth but minimal recurring W-2 or business taxable income. Under conventional DTI underwriting, these borrowers appear unqualified despite multi-million dollar balance sheets.
Asset Depletion and Asset Utilization mortgage programs solve this dilemma by converting verifiable liquid and investment holdings into recognized qualifying monthly income.
How asset depletion income calculations work
Under an Asset Depletion program, the lender tallies total qualifying liquid assets (after deducting required down payment, closing costs, and post-closing reserves) and divides that net figure by a set term—typically 240, 300, or 360 months.
For example, a borrower with $2,400,000 in net qualifying liquid assets under a 240-month formula receives $10,000 in recognized qualifying monthly income ($2,400,000 ÷ 240 = $10,000/mo), regardless of whether they have a current job or ongoing earnings.
Eligible asset categories and valuation haircuts
Lenders recognize a wide spectrum of verified asset accounts, applying standardized discount percentages (haircuts) to account for market volatility and early withdrawal penalties:
• **Checking & Savings Accounts**: 100% of verified balance.
• **Marketable Stocks, Bonds & Mutual Funds**: 80% to 90% of current value.
• **Retirement Accounts (401k, IRA, Keogh)**: 70% to 80% of balance (must confirm unrestricted access or borrower age 59½+).
• **Trust Accounts & Cash-Value Life Insurance**: Eligible with supporting legal documentation.
Combining asset depletion with existing income streams
Asset utilization can be used as a standalone income qualification method or layered on top of existing revenue sources, including pensions, Social Security, trust disbursements, dividends, or part-time consulting income.
This flexibility allows transitioning executives or semi-retired individuals to comfortably qualify for luxury primary residences or vacation second homes without liquidating profitable investment portfolios.
Documentation needed for asset utilization review
Gather comprehensive account statements to establish asset eligibility.
- 60 to 90 days of complete statements for all checking, savings, and money market accounts.
- Most recent quarterly or monthly statements for stock brokerage and mutual fund portfolios.
- Retirement account statements verifying vested balance and terms of withdrawal.
- Trust agreements, operating agreements, or letters verifying clear ownership and liquid transferability.
- Documentation confirming assets are held in US-regulated financial institutions.