A retired engineer sat across from me with about as clean a file as I ever see. Paid-off house, seven figures in a brokerage account, no debt worth mentioning, credit in the high 700s. A bank had already told him no.
Not because of anything in that paragraph. Because the box on the application labeled “monthly income” had a very small number in it, and the underwriting system he was run through only knows how to read that box.
There is a whole family of loans built for exactly this borrower, and I’ve written about how asset depletion works already. What that post doesn’t get into — and what costs people real money — is that “asset depletion” is not one loan. It is at least three different loans wearing the same name tag, and they have almost nothing in common except the general idea.
Three products, one nickname
When someone says “asset depletion,” they could mean any of these.
1. Fannie Mae’s version: employment-related assets
Fannie doesn’t call it asset depletion at all. It is “Employment Related Assets as Qualifying Income,” and the name is doing real work — the word employment is a restriction, not decoration. This lives at B3-3.4-06 in the Selling Guide, which matters mostly because it moved there in March 2026 and half the internet still cites the old section number.
What Fannie will count: retirement accounts you have unrestricted access to, a documented severance package, a lump-sum retirement distribution. What Fannie will not count: stock options, non-vested restricted stock, lawsuit proceeds, lottery winnings, proceeds from selling real estate, inheritance, divorce proceeds, and cryptocurrency.
Read that list again, because it surprises almost everyone. Your ordinary checking and savings accounts generally don’t count either, unless you can trace the balance back to something on the eligible list.
Then the math. Fannie divides your net documented assets by the amortization term of the loan — the whole thirty years, on a thirty-year mortgage. And “net” is doing heavy lifting there: you subtract the penalty that would apply if you emptied the account today, and you subtract everything going to down payment, closing costs, and required reserves, before you divide.
Spread a portfolio across three hundred and sixty months after all that, and the qualifying income it produces is modest. That is the design, not a bug. Fannie also limits this to a principal residence or second home, purchase or limited cash-out refinance only, with a lower loan-to-value ceiling than a standard file — and a somewhat better ceiling if the owner of the assets is at least 62 at closing.
2. Freddie Mac’s version: assets as a basis for repayment
Freddie built the same idea differently, in Guide Section 5307.1, and historically it was the more restrictive of the two on who could use it while being more generous on the math.
This is the part worth your attention: Freddie issued Bulletin 2026-10 in August 2026 and rewrote this section fairly substantially. The division factor drops from 240 months to 180 — same assets, materially more qualifying income. Investment properties become an allowed occupancy, where before this was a primary-and-second-home product. The flat loan-to-value ceiling goes away in favor of the standard eligibility table. And the age restriction that limited depository accounts and securities to older borrowers is removed entirely.
There are new guardrails in exchange. A minimum of thirty thousand dollars in net eligible assets. Twelve-month seasoning on depository and securities accounts unless the money came from a documented eligible source. And a look-back that compares your account balance today against the same account a year ago, with limits in both directions — a big unexplained drop can disqualify the account, and a big unexplained jump gets capped.
The timing caveat, stated plainly because I’d rather you hear it from me: these revisions are effective for settlements on or after February 3, 2027. Lenders are permitted to adopt them earlier. So “can I use the better version right now” is a real question with a real answer, and the answer depends on which investor your loan goes to. That is a question to ask, not one to assume.
3. Non-QM asset utilization
Then there’s the one that isn’t an agency loan at all. Non-QM asset utilization programs are written by individual investors, which means there is no single rulebook — there are dozens, and they disagree with each other.
Broadly, this is where you find the shorter divisors, the willingness to count asset types the agencies won’t touch, no employment-history requirement, and occupancy flexibility the agency products don’t offer. You trade the agency rulebook for the investor’s rulebook, and you pay for the flexibility in pricing and structure.
To put a number on “shorter”: I have asset utilization programs that divide over sixty months. Set that next to Fannie’s three hundred and sixty and you can see why the same brokerage statement produces two wildly different answers depending on who reads it. That single choice of divisor moves the qualifying figure more than anything else in the file.
Worth knowing before you plan around it: asset utilization programs generally exclude short-term rental income, so if the plan was to combine your portfolio with projected income from a vacation rental, those two don’t stack. That’s a DSCR conversation instead.
For a lot of the people who need this, that isn’t a choice between two good options. It’s a choice between this and a polite no.
So which one are you?
Short version, and then the honest version.
- Most of your wealth is in retirement accounts, you’re buying a primary or second home, and you’re not in a hurry? Start with the agency products. They’re cheaper, and if the math works, there’s no reason to go further afield.
- Your assets are mostly in a taxable brokerage account, or you’re buying an investment property? Agency was historically a poor fit and Freddie’s rewrite changes that meaningfully — but not until the investor you’re placed with has adopted it. Until then, non-QM is usually the answer.
- Your money came from selling a business, a property, or an inheritance? Fannie won’t count it. Freddie’s revised section explicitly addresses business-sale and property-sale proceeds with seasoning conditions. Non-QM will usually count it. This is the single biggest sorting question and almost nobody asks it first.
- You have a paycheck but it understates you? You may not need any of this. Bank statement documentation solves a similar problem from a completely different direction, and it’s often the better tool for a business owner who’s actively working.
The mistake I see most often
Someone gets quoted an “asset depletion” number by one lender, the number comes back small, and they conclude they can’t buy the house.
What actually happened is they got quoted one of the three products, by a lender who only offers that one. The same statement, the same assets, the same borrower can produce wildly different qualifying income depending on whose rulebook you’re under and what divisor it uses. Nobody at that first lender was wrong. They just only had one answer available, which is the structural difference between a broker and a bank and the reason shopping the file matters more on a non-traditional loan than a standard one.
These files also tend to be larger ones, so the asset question and the jumbo question usually arrive together. If you’re above the conforming limit, it’s worth putting asset-based qualification next to bank statement options and comparing them side by side rather than picking one and hoping. And if the property is a rental, a DSCR loan qualified on the property itself may get you there without involving your assets at all.
What I’d actually do with your file
Send me the statements. Not the balances — the statements, because with these programs the composition matters more than the total. Where the money sits, when it got there, whether a penalty applies, and what it was before it was that, all change the answer.
Then I run it against the agency calculation and against a couple of investor structures, and tell you which one produces the loan you actually need. Sometimes the boring agency answer wins and I’ve saved you money. Sometimes it doesn’t come close and we go the other way. Either way you find out in an afternoon instead of six weeks into an application.
I’d rather find the problem in your file before we apply than have an underwriter find it two weeks before closing.
Get your pre-approval done on real numbers, not a rule of thumb. I work with 40+ lenders rather than one, which on a file like this is the entire difference between a yes and a no. And none of it changes what I charge, because I don’t charge a lender fee. Ever.
Don’t be mad at money. Shop your rate.
Strong balance sheet, weak-looking tax return? Send me your statements and I’ll tell you what you qualify for under each structure. Ten minutes, free, zero lender fees. Call or text (512) 423-4663.
Russell Stout | Texas Mortgage Consultants, PLLC | NMLS #220896 | Company NMLS #1843758 | Equal Housing Lender. Agency guideline references are current as of publication and subject to change; Freddie Mac Bulletin 2026-10 revisions are effective for settlement dates on or after February 3, 2027 with optional earlier implementation, and availability varies by investor. Program eligibility, asset treatment, qualifying income calculations, rates and terms vary by lender and borrower qualification; this is not a loan offer, quote, or commitment to lend. Not tax, legal, or investment advice — consult your CPA or advisor. All loans subject to credit approval.
Frequently Asked Questions
What is the difference between asset depletion and asset utilization?
They are often used interchangeably, but in practice they describe different products. Asset depletion usually refers to the agency programs from Fannie Mae and Freddie Mac, which convert eligible assets into qualifying income using a fixed divisor and apply strict rules about which assets count. Asset utilization usually refers to non-QM programs written by individual investors, which tend to use shorter divisors, accept a wider range of asset types, and allow occupancy types the agency products restrict. The same borrower can qualify for very different loan amounts depending on which one is used.
How does Fannie Mae calculate qualifying income from assets?
Fannie Mae divides net documented assets by the amortization term of the loan in months. Net documented assets means eligible assets minus any penalty that would apply if the account were fully distributed at the time of calculation, and minus the funds needed for down payment, closing costs, and required reserves. The requirements are in Selling Guide section B3-3.4-06, which the topic moved to in March 2026.
Which assets does Fannie Mae not allow for asset depletion?
Fannie Mae treats stock options, non-vested restricted stock, lawsuit proceeds, lottery winnings, proceeds from the sale of real estate, inheritance, divorce proceeds, and virtual currency as ineligible. Ordinary checking and savings accounts are generally ineligible as well, unless the balance can be traced to an eligible employment-related source such as a severance package or a lump-sum retirement distribution.
What changed in Freddie Mac Bulletin 2026-10?
Freddie Mac revised Guide Section 5307.1 in August 2026. The division factor used to convert assets into qualifying income drops from 240 months to 180, investment properties become an eligible occupancy type, the flat loan-to-value ceiling is replaced by the standard eligibility table, and the borrower age restriction on depository accounts and securities is removed. New conditions include a minimum net eligible asset amount, twelve-month seasoning on depository and securities accounts, and balance-variance testing over the prior twelve months. The revisions are effective for settlement dates on or after February 3, 2027, and lenders may implement them earlier.
Can I use an asset-based loan to buy an investment property?
Under Fannie Mae’s employment-related assets program, no. It is limited to a principal residence or second home. Freddie Mac’s revised requirements permit all occupancy types including investment properties, but those revisions carry a February 2027 effective date with optional earlier adoption by the lender. Many non-QM asset utilization programs allow investment properties today, and a DSCR loan qualified on the property’s rental income is often a simpler path for a rental purchase.
Do I need a job to qualify using my assets?
Not necessarily, and this is a common misunderstanding. Fannie Mae’s program requires no minimum income history, because the qualifying figure is calculated from loan terms rather than earnings history, but it does restrict which assets are eligible based on their employment-related source. Non-QM asset utilization programs generally do not require employment at all. Retirees living entirely off a portfolio are among the most common users of these loans.
