Can I Use Asset Depletion Income to Qualify?

Yes. The Wealth Builder HELOC accepts asset depletion as a qualifying income method for borrowers who have significant liquid or investable assets but limited traditional income. This makes it particularly well-suited for retirees, high-net-worth individuals, and others whose wealth is held in assets rather than earned through employment.

How Asset Depletion Works

Asset depletion converts your eligible assets into a monthly income figure for qualifying purposes. The general method divides a percentage of your eligible assets by a set number of months (typically 120) to arrive at a monthly income figure that can be used in your DTI calculation.

Eligible Asset Types

Not all assets qualify equally. Eligible asset types typically include:

• Checking and savings accounts
• Money market accounts
• Stocks, bonds, and mutual funds (with applicable haircut)
• Retirement accounts (with age-based eligibility percentage)
• Vested stock options and restricted stock (with applicable discount)

Certain asset types are not eligible, including business assets not accessible to the borrower, non-vested equity, and assets with significant liquidity restrictions.

Age and Eligible Percentage

The percentage of retirement assets that can be counted varies based on borrower age — borrowers under 59½ may face a penalty discount on retirement account withdrawals, which is reflected in the eligible percentage matrix. Borrowers 59½ and older typically qualify for a higher percentage of retirement assets.

Documentation Required

• Most recent 2–3 months of asset statements
• Evidence that assets are accessible and not restricted
• For retirement accounts: account statements showing vested balance

A worked example (illustrative example, not a quote)

Suppose, for round numbers, that $1,200,000 of your assets are counted after any discounts for stocks or retirement accounts. Dividing by 120 months gives $1,200,000 ÷ 120 = $10,000 of monthly qualifying income.

That income then has to support the qualifying payment, which is the full principal and interest payment on the entire line over 30 years. At a hypothetical 7% rate on a $400,000 line, that payment is about $2,661, or roughly 26.6% of the $10,000 before any other debts are added. The arithmetic shows why the line amount you request matters as much as the size of your portfolio.

Prepare your accounts before you apply

• List every account with its owner, because accounts titled to a trust, a business, or someone else may be treated differently.
• Keep money you plan to use for a down payment or closing costs separate in your math, since the same dollar generally cannot be counted twice.
• Avoid shuffling large sums between accounts right before the application, and keep a paper trail for any transfer you do make.
• For stocks and funds, expect the value to be taken from your statement, and expect a discount for market swings.

Common mistakes

• Counting assets inside a business that you cannot withdraw personally.
• Forgetting that asset values move, so a strong statement date can look weaker a month later.
• Applying for a line far larger than needed, which raises the qualifying payment for no benefit.

Reviewing your result

Compare the monthly figure you calculate against the qualifying payment for the line size you want. If the ratio is tight, a smaller line, additional documented assets, or a co-borrower may change the picture.

Frequently asked questions

Do I have to sell the investments I use for qualifying?

No. Asset depletion is a way to calculate qualifying income from the balance; it does not require you to liquidate the accounts. Your assets stay invested unless you choose otherwise.

Can I combine this with wages or bank statement income?

Whether income methods can be combined varies by program and borrower profile; we confirm the current guidelines when we review your scenario.

Which accounts should I gather first?

Start with your two or three most recent statements for checking, savings, brokerage, and retirement accounts, plus a note on which are held jointly. Complete statements with all pages make underwriting smoother.

Related guides

• How the qualifying payment is calculated
• Eligibility requirements
• Asset depletion mortgages
• Borrowers who benefit most

Quick recap

• Divide eligible assets by 120 to estimate monthly qualifying income; the result is then tested against the full-line qualifying payment.
• Assets used for your down payment or closing costs typically cannot also be counted as income-producing assets.
• Move money between accounts well before applying so every large transfer is easy to document.