What Is Asset Utilization and Asset Depletion? Qualifying on Wealth, Not Income
Not every borrower earns a regular paycheck. Retirees, high-net-worth individuals, and others who live off investments or savings may have substantial wealth but limited traditional income. Asset utilization — sometimes called asset depletion — is a Non-QM income method that converts liquid assets into qualifying income.
How It Works
The lender takes your eligible liquid assets, subtracts amounts needed for down payment, closing costs, and required reserves, and then divides the remaining balance by a set number of months — typically 84 months. The result is treated as your monthly qualifying income.
What Assets Count?
Not all assets are created equal. Lenders apply percentage factors to different asset types:
| Asset Type | Eligible Percentage |
|---|---|
| Checking / Savings / Money Market | 100% |
| Stocks, Bonds, Mutual Funds | 60–70% |
| Retirement Accounts (under 59½) | 60–70% |
| Retirement Accounts (59½ and older) | 70–80% |
| Cash Value of Life Insurance | 100% |
| Cryptocurrency (converted to cash) | Varies — must be seasoned |
What Assets Are NOT Eligible
- Business assets or funds held in a business name
- Foreign assets (on most programs)
- Gift funds
- Non-liquid assets (real estate, vehicles, artwork)
- Restricted or unvested stock
- Assets held in irrevocable trusts (borrower must have immediate access)
Program Requirements
Asset utilization programs require a minimum asset balance — generally the lesser of $1 million or 125% of the loan amount. Assets must be seasoned, typically for 90 to 120 days, and verified with the most recent two to six months of statements. Balances must be verified close to the note date.
This option is generally available on primary residences only on some programs, and is not permitted for cash-out refinances, investment properties, or second homes under certain guidelines. Always confirm eligibility with your loan officer.
Who This Is For
- Retirees with significant investment portfolios but limited W-2 income
- Individuals who sold a business or property and are living off the proceeds
- High-net-worth borrowers whose income doesn’t reflect their financial strength
- Borrowers who receive income from trusts or other sources not easily documentable in standard form
Key Takeaways
- Asset utilization converts liquid wealth into qualifying income — no employment required
- Net eligible assets are divided by 84 months to determine monthly income
- Checking, savings, and money market accounts count at 100%; other assets at lower percentages
- Generally restricted to primary residence; not available for cash-out or investment on most programs
- Assets must be seasoned and verified close to closing
Serving borrowers throughout California — Orange County, Los Angeles County, Riverside County, San Bernardino County, San Diego County, and the greater Southern California region including Santa Ana, Irvine, Anaheim, Huntington Beach, Fullerton, Garden Grove, and surrounding communities.