Asset depletion loan requirements
Asset depletion loans require substantial liquid assets — brokerage, cash, retirement accounts — that the lender converts to monthly qualifying income using a depletion factor. Credit score of 700+ and 10–25% down are typical.
By Sunrise Lending
How depletion income is calculated
How depletion income is calculated
What you need to know
- Eligible assets: cash, taxable brokerage, IRA, 401(k), Roth IRA, vested public stock
- Excluded: business equity, real estate equity, unvested stock, crypto
- Depletion factor: 60 months (taxable), 84 months (retirement)
- Pre-59½ retirement accounts: 20–30% haircut before applying factor
- Credit score: 700+ (best pricing at 740+)
- Down payment: 10–25% (not sourced from the depleted asset pool)
- Post-close reserves: required beyond the depleted assets used for income calculation
About this
What assets qualify
Eligible assets for depletion income include: cash, checking and savings accounts, taxable brokerage accounts, vested public stock, IRA, Roth IRA, 401(k), and SEP-IRA. The lender applies a depletion factor to each eligible asset class to arrive at a monthly income equivalent.
Excluded assets: business equity (your ownership stake in a private company), real estate equity (the appraised value of any property), unvested or restricted stock without documented liquidity, and cryptocurrency. These assets may have significant value but are not convertible to income on a defined schedule, which is what the depletion formula requires.
Pre-59½ retirement account haircut
For retirement accounts held by borrowers under age 59½, most programs apply a 20–30% haircut to the balance before applying the depletion factor. This reflects the 10% early-withdrawal penalty and the practical difficulty of accessing retirement funds before they're penalty-free. After the haircut, the remaining eligible balance is divided by 84 months.
Hybrid files
Asset depletion stacks cleanly with other income types. A founder with $1.5M in a brokerage and a $90K W-2 qualifies at: depletion income ($25,000/month) + W-2 income ($7,500/month) = $32,500/month total. The matcher identifies whether pure depletion or a hybrid file is stronger for your specific situation.
Documentation required
Two to three months of statements for each eligible account, showing the current balance and that the assets are in your name (or the joint name of co-borrowers). For vested public stock, a brokerage statement showing shares × current market value is sufficient. For restricted stock, a vesting schedule and documentation of the liquidity path (IPO timeline or secondary market letter) are required.
Common questions
- How much in assets do I need to qualify?
- It depends on your loan size and target qualifying income. As a rough guide: to qualify for a $5,000/month payment at 50% DTI, you need approximately $600,000+ in taxable assets at the 60-month factor ($10,000/month per $600K). The matcher calculates your specific requirement.
- Are my assets pledged as collateral for the loan?
- No. Asset depletion uses your balances to calculate income — your assets stay in your name, remain liquid, and continue to grow. This is different from a pledged-asset loan, where accounts are collateralized.
- Can I use my business's bank account balance?
- Not typically. Business accounts in the company's name are considered business equity, not personal liquid assets. Personal brokerage and retirement accounts held in your name are eligible. Some programs accept assets in a revocable living trust where you are the trustee.
- What happens after the depletion period ends?
- The depletion factor is a qualification construct — not a payment schedule. You don't actually deplete the accounts over the loan term. Your investments remain intact and continue to grow throughout the loan. The factor is simply how the lender converts a balance into a monthly income equivalent.
- Can asset depletion work with restricted stock pre-IPO?
- Possibly, with documented liquidity. Some programs accept restricted stock with a near-term IPO timeline, a documented tender offer, or a secondary market letter showing current liquidity at a known price. The officer advises on what documentation is needed for your specific stock.
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Related resources
Sources
- 1.Internal Revenue Service (IRS). IRA FAQs — Distributions (Withdrawals) — Accessed June 2026
- 2.Consumer Financial Protection Bureau (CFPB). Ability-to-Repay and Qualified Mortgage Standards — Accessed June 2026
- 3.U.S. Securities and Exchange Commission (SEC). Investor Bulletin: Retirement Accounts and Investment — Accessed June 2026
Asset-depletion calculations, eligible asset classes, depletion factors, and pre-59½ haircuts vary by lender. Assets are not pledged as collateral. Final approval, terms, and rates determined by lender after underwriting. Not a commitment to lend.
Sunrise Lending · Equal Housing Opportunity. Matching rules are written and reviewed by licensed mortgage professionals. All loan decisions are made by licensed mortgage professionals. Not a commitment to lend. Loan approval subject to underwriting guidelines. This is not financial advice.