Many borrowers hold real savings and have no paycheck a lender can point to. They are unsure how a retirement balance may affect the way an underwriter reads their file. This guide covers what asset depletion is and how it can shape a home loan review.
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What Is an Asset Depletion Home Loan?
SHORT ANSWER
An asset depletion home loan is a way of qualifying, not a separate loan program. A lender converts documented savings into a monthly income figure and underwrites the file the same way it would any other. The savings themselves stay where they are.
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| Asset Depletion Home Loan Question | Direct Answer |
|---|---|
| What asset depletion is | A way to qualify, not a loan program |
| Asset depletion account withdrawals | None. The accounts stay invested |
| Asset depletion cap at Fannie Mae | 70% loan-to-value, or 80% at age 62 |
| Who asset depletion is built for | Borrowers with savings and no paycheck |
| Who offers asset depletion | Fannie Mae, Freddie Mac, and non-QM lenders, meaning lenders working outside the federal Qualified Mortgage standard |
| Other names for asset depletion | Asset dissipation, or asset amortization |
| Difference between asset depletion and asset-based lending | Asset depletion converts a balance into a monthly income figure. Asset-based lending qualifies on the balance itself |
| What the loan underneath asset depletion actually is | A conventional loan or a non-QM loan, depending on which path the file takes |
| Occupancy allowed on a Fannie Mae asset depletion loan | Primary residence or second home |
| Loan purpose allowed on a Fannie Mae asset depletion loan | Purchase or limited cash-out refinance |
| Accounts a lender counts for asset depletion | Retirement accounts, severance packages, and lump sum retirement distributions |
| Whether asset depletion requires an income history | No history of receiving the income is required under the Fannie Mae program |
| Access a lender requires to a retirement account | An unrestricted right to withdraw the full balance |
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| Asset Depletion Home Loan Factor | What It Means for Your File |
|---|---|
| Why Asset Depletion Is a Qualifying Method and Not a Loan Program | Asset depletion is a qualifying method rather than a loan program you apply for. A lender takes documented savings, converts the balance into a monthly income figure, and runs that figure through the same underwriting any other file receives. The loan itself is still a conventional loan or a non-QM loan underneath. Borrowers often learn on the call that they are choosing a loan program and a qualifying method separately. |
| Why Asset Depletion Is Not Only a Non-QM Product | Nearly every page describing asset depletion calls it a non-QM product with no agency behind it. Both Fannie Mae and Freddie Mac publish their own version of this qualifying method in their selling guides. A borrower who fits the Fannie Mae or Freddie Mac box can often reach better pricing than the non-QM route offers. Those two programs trade that pricing for tighter limits on occupancy and loan purpose. |
| Which Borrowers Asset Depletion Was Built For | Asset depletion serves borrowers whose wealth does not show up as monthly income. A retiree living on savings rather than a paycheck is the clearest example. So is a business owner whose deductions leave a tax return showing far less than the business actually produces. Someone who recently sold a company or a property may hold a large balance and no current earnings at all. The common thread is a documentation mismatch rather than a shortage of money. |
| How Asset Depletion Differs From Asset-Based Lending | Asset depletion and asset-based lending get used as if they mean the same thing, and they do not. Asset depletion converts a balance into a monthly income figure that a lender then measures against your debts. Asset-based lending qualifies you on the balance itself with no income conversion step at all. Only asset depletion has a Fannie Mae and Freddie Mac version, since the conversion produces an income figure the selling guides recognize. |
| Why Nothing Leaves Your Account Under Asset Depletion | Nothing is withdrawn, sold, or pledged when a lender runs an asset depletion calculation. The accounts stay invested and the balance serves as evidence of capacity rather than as a source of payments. The word depletion describes the arithmetic, not anything happening to your liquid assets. How the non-QM side of this market works is covered on our Non-QM Home Loan guide. |
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| Asset Depletion Home Loan Metric | What Lenders May Check on Your File |
|---|---|
| Documented Account Balance | A lender verifies the balance and the makeup of each account through recent statements. The statement has to show what the account actually holds, not just a total. |
| Access to the Funds | A retirement account feeds an asset depletion calculation only when you hold an unrestricted right to request the full balance. Any early withdrawal penalty that would apply comes off the balance before the math runs. |
| Ownership of the Account | The account must be in your name, or a co-owner must also be a borrower on the loan. A jointly held account with a non-borrower does not feed the calculation. |
| Equity Position | Fannie Mae caps the loan-to-value ratio at 70% when asset depletion is used, meaning the loan cannot exceed 70% of what the home is worth. That rises to 80% when the person who owns the accounts is at least 62 at closing. |
| Occupancy and Loan Purpose | Fannie Mae limits asset depletion to a home you live in or a second home, and to a purchase or a refinance that does not take cash out. Non-QM lenders set their own boundaries. |
| Repayment After the Accounts Run Down | When an asset account is your only or main source of qualifying income, a lender must assess whether you could keep paying once that account is spent down. |
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| People Also Ask | Why These Questions Matter |
|---|---|
| How is asset depletion different from a bank statement home loan? | Asset depletion counts the balance you have saved rather than the deposits flowing into your account each month. A bank statement home loan does the opposite, averaging 12 or 24 months of deposits to build a qualifying figure. A large balance with thin deposits points to the first. |
| Do you need a job to use asset depletion on a home loan? | Employment is not required to use asset depletion on a home loan. Fannie Mae asks for no history of receiving this income before counting it. Your savings can carry the entire qualifying figure when the balance supports the payment you want. |
| What is asset dissipation underwriting? | Asset dissipation underwriting is the federal regulator’s name for asset depletion. The Office of the Comptroller of the Currency uses the term to describe converting a borrower’s assets into a hypothetical monthly stream added to other income. Asset amortization underwriting refers to the same practice. |
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| Sources Used on This Page |
|---|
| This page uses the plain phrase “a monthly income figure” where the selling guides use “qualifying income,” the plain word “savings” where the guides use “employment-related assets,” the plain phrase “accounts a lender counts” where the guides use “eligible assets,” the plain word “cap” where Fannie Mae uses “Max LTV, CLTV, and HCLTV Ratio,” and the plain phrase “a way to qualify” where the guides describe a determination of qualifying income. Fannie Mae — Selling Guide B3-3.4-06, Employment Related Assets as Qualifying Income | Selling Guide B3-3.1-01, General Income Information | Announcement SEL-2026-02 | Freddie Mac — Single-Family Seller/Servicer Guide Section 5307.1, Assets as a Basis for Repayment of Obligations | Office of the Comptroller of the Currency — Bulletin 2019-36, Mortgage Lending: Lending Standards for Asset Dissipation Underwriting |
| Last Verified August 2026 |
| Fannie Mae moved this policy from Selling Guide section B3-3.1-09 to B3-3.4-06, so older references to the previous number point to a section that no longer holds this rule. The loan-to-value caps, the age that raises them, occupancy limits, and eligible account categories are revised through Selling Guide announcements on their own schedule. Non-QM asset depletion terms are set by each individual lender or investor rather than by either agency, so they move independently of anything published in the agency guides. |
| Disclaimer |
| Asset depletion is offered both as an agency qualifying method and through non-QM programs. Agency guidelines are set by Fannie Mae and Freddie Mac, and all non-QM guidelines vary by lender and investor. The figures and rules shown on this page were checked against the sources listed above as of the Last Verified date, and each agency updates its guide on its own schedule. This page is provided for educational purposes only. Smart Loan Savings Educational Content |