I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. Call (800) 239-1103.
You have a significant net worth and substantial liquid assets. What you don’t have is a W-2, or income on your tax returns that reflects how strong your finances really are. I see this constantly with California retirees, executives between roles, investors living on portfolio returns, and business owners who keep earnings in the company. A bank looks at the tax return and says no. An asset depletion mortgage (also called asset dissipation or asset utilization) says: let’s count what you actually have.
Instead of qualifying you on employment income, the lender converts your eligible assets into a monthly “income” figure — roughly, what those assets could pay you each month over a set period. You don’t have to sell anything or take distributions. The assets stay invested; the calculation is only for qualifying.
How the Calculation Works
Every asset depletion program follows the same basic steps. The details are where lenders differ.
- Add up eligible assets. Cash, money market and brokerage accounts usually count at full value. Retirement accounts are often discounted — many non-QM lenders count about 70% of the vested balance to allow for taxes and early-withdrawal penalties.
- Subtract what the purchase uses. The down payment, closing costs and required reserves come off the top. Only what’s left is divided.
- Divide by the lender’s divisor (a number of months) to get monthly qualifying income.
- Add any other documented income — Social Security, a pension, rental income, part-time W-2 — and qualify on the total with a normal debt-to-income ratio.
The divisor is everything
This is the part most borrowers never hear about, and it’s why I made the video below. Depending on the program, the divisor can be the loan term (360 months), 240 months, or as short as 60 months with some non-QM wholesale lenders. The same assets produce very different qualifying income:
| Net eligible assets | ÷ 360 (loan term) | ÷ 240 | ÷ 60 |
|---|---|---|---|
| $1,000,000 | $2,778/mo | $4,167/mo | $16,667/mo |
| $2,000,000 | $5,556/mo | $8,333/mo | $33,333/mo |
| $4,000,000 | $11,111/mo | $16,667/mo | $66,667/mo |
Put that in housing terms. At a 43% DTI with no other debts, $2 million divided by 360 supports a total housing payment of about $2,390 a month. Divided by 60, the same $2 million supports about $14,330 a month. Same borrower, same money, roughly six times the buying power, depending only on which lender’s program you use. A bank can offer you only its own program. As a broker, I can compare the divisor, retirement-account haircut, reserve rules and pricing across lenders and pick the one that fits your assets.
The shorter divisors come with trade-offs: they’re non-QM programs, so expect higher rates than conforming loans, lower maximum LTVs (commonly 80% on a purchase, less for cash-out), minimum credit scores, and a cap on the loan amount. Sometimes the conforming route is still cheaper even though it qualifies you for less. I’ll show you both.
Conforming vs. Non-QM Asset Depletion
Asset-based qualifying isn’t only a non-QM product. Fannie Mae and Freddie Mac both allow it, but with tighter rules:
| Fannie Mae | Freddie Mac (today) | Non-QM wholesale programs | |
|---|---|---|---|
| Eligible assets | Retirement accounts (401(k), IRA, SEP, Keogh), severance and lump-sum retirement distributions — not ordinary brokerage or savings accounts | Retirement, depository and investment accounts, business-sale proceeds | Cash, brokerage and retirement accounts (retirement often at ~70%) |
| Divisor | Loan term in months (360 on a 30-year) | 240 months | Varies — as short as 60 months |
| Age | No minimum, but 80% max LTV only if the asset owner is 62+; otherwise 70% | Account owner must be 62+ for bank and brokerage accounts | Generally none |
| Occupancy | Primary residence and second home | 1–2 unit primary residence or second home | Primary, second home and investment property |
| Max loan | Conforming limit | Conforming limit | Lender cap; jumbo sizes available |
Freddie Mac change coming in 2027: for loans with settlement dates on or after February 3, 2027, Freddie Mac’s Bulletin 2026-10 shortens its divisor from 240 to 180 months, drops the age requirement for bank and brokerage accounts, allows investment properties, and applies standard LTV limits. It also adds a $30,000 minimum and generally requires 12 months of seasoning. If you’re close to the line and can close after that date, it may be worth planning around.
The 2026 conforming limit is $832,750 in most of California and up to $1,249,125 in high-cost counties such as San Francisco, Marin, San Mateo, Santa Clara, Alameda, Contra Costa, Los Angeles and Orange. Above your county’s limit, you’re in jumbo or non-QM territory. See 2026 conforming loan limits by county.
What Counts — and What Doesn’t
Usually eligible: checking, savings, money market and CDs; brokerage accounts (stocks, bonds, mutual funds, ETFs); vested 401(k), IRA, SEP and similar retirement balances you can access; proceeds from a documented home or business sale sitting in a liquid account; and vested RSUs or stock, depending on the lender.
Usually not eligible: real estate equity, business accounts you don’t personally control, unvested RSUs or options, assets in trusts you can’t withdraw from, private equity and other illiquid investments, borrowed funds, and assets already pledged as collateral. Gift funds can help with the down payment but generally don’t count toward depletion income.
Lenders will want recent statements for every account, often two months or more, and they’ll want to see that large balances are seasoned or sourced. Money that just arrived needs a paper trail. If your wealth is mostly equity compensation, see RSU and equity compensation mortgages.
Who Uses Asset Depletion
- Retirees with large portfolios but modest Social Security or pension income. That includes Bay Area retirees downsizing to Sacramento or elsewhere with sale proceeds, CalPERS and military retirees with savings on top of a pension, and anyone who’d rather keep their money invested than pay cash.
- Executives and tech employees between roles, recently retired, or holding concentrated stock positions.
- Business owners who pay themselves a small salary, keep earnings in the company, or recently sold the business.
- Entertainment and creative professionals in Los Angeles with irregular, project-based income and strong savings.
- Investors living on portfolio returns whose tax returns don’t show much income.
Asset depletion income can be combined with other income. A retiree with Social Security, a pension and a portfolio often qualifies for far more with all three counted together than with any one of them alone.
Where I Do These Loans
Asset depletion is most common where prices are highest: Marin County, San Francisco and the Peninsula, the East Bay (Piedmont, Orinda, Lafayette, Danville, Walnut Creek), Los Angeles (Westside, Malibu, Pasadena), and San Diego’s coastal communities (La Jolla, Del Mar, Rancho Santa Fe, Coronado). It works just as well in Sacramento and other inland markets, where the same portfolio goes further. Retirees relocating from the Bay Area often use it to buy without first selling everything. If you need to buy before your current home sells, a bridge loan may also fit.
Asset Depletion vs. Other Non-Traditional Options
- Asset depletion: best when you have large liquid assets and limited documented income.
- Bank statement loans: best for self-employed borrowers with steady business deposits but low taxable income.
- DSCR loans: best for investment properties, qualifying on the property’s rent rather than personal income.
- Reverse mortgage / HECM for Purchase: for homeowners 62+ who want no required monthly mortgage payment.
Plenty of my clients fit two of these at once. The right answer is whichever one gives you the best combination of rate, terms and loan size for your actual assets.
A Recent File: Asset Depletion With a Gifted Down Payment
Most asset depletion programs don’t allow a gift. I recently pre-approved a self-employed client for a $1,750,000 purchase where his parents are gifting the entire 20% down payment. We used asset depletion on about $500,000 of his assets, stacked on top of bank statement and W-2 income, with no tax returns. Read how I structured it.
Frequently Asked Questions
What is an asset depletion mortgage?
An asset depletion mortgage (also called asset dissipation or asset utilization) lets you qualify using liquid assets instead of, or in addition to, employment income. The lender subtracts the down payment, closing costs and reserves from your eligible assets, then divides what remains by a set number of months to calculate monthly qualifying income. You do not have to sell or withdraw anything.
How is asset depletion income calculated?
Eligible assets (cash and brokerage usually at full value, retirement accounts often at about 70% with non-QM lenders) minus the funds needed to close, divided by the lender’s divisor. Fannie Mae uses the loan term (360 months on a 30-year), Freddie Mac currently uses 240 months, and some non-QM wholesale programs use as few as 60 months. For example, $2,000,000 of net eligible assets is about $5,556 a month divided by 360, or $33,333 a month divided by 60.
Why does it matter whether I use a bank or a broker?
Because the divisor, the retirement-account haircut, reserve rules and pricing vary widely between programs, and a bank can only offer its own. The same assets can qualify you for several times more at one lender than another. A broker can compare programs and choose the one that fits your assets, while weighing the higher rate of non-QM options against conforming ones.
Can I use asset depletion with Fannie Mae or Freddie Mac?
Yes, with limits. Fannie Mae counts retirement accounts, severance and lump-sum retirement distributions divided by the loan term, with a 70% max LTV (80% if the asset owner is 62 or older). Freddie Mac currently divides net eligible assets by 240, requires the account owner to be 62+ for bank and brokerage accounts, and caps LTV at 80%. Freddie’s Bulletin 2026-10 changes that to 180 months, removes the age requirement and allows investment properties for loans settling on or after February 3, 2027.
Do I have to liquidate my investments to qualify?
No. Asset depletion is only a qualifying calculation. You document the accounts with statements; the assets stay invested. You do need to keep enough in the accounts to cover the down payment, closing costs and required reserves.
Can I combine asset depletion with Social Security or a pension?
Yes. Asset depletion income can be added to Social Security, pension, rental or W-2 income. For many retirees, combining a pension or Social Security with depletion income from a portfolio is what makes the loan work.
Can I use asset depletion for a jumbo loan or an investment property?
Yes, through jumbo and non-QM lenders. Many non-QM asset utilization programs allow primary residences, second homes and investment properties, typically with a maximum of around 80% LTV on a purchase and lower for cash-out. Conforming programs are limited to the conforming loan limit and, for now, to primary residences and second homes.
Related Resources
- Non-QM Mortgages in California
- California Jumbo Loans
- Bank Statement Loans
- RSU & Equity Compensation Mortgages
- Reverse Mortgages in California
- Bridge Loans in California
- 2026 California Conforming Loan Limits
Official Sources & References
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
