Asset Utilization Loans
Self-Employed & Alternative Income
Asset Utilization Loans
Asset utilization programs may allow eligible assets — retirement accounts, investment portfolios, savings — to be evaluated as a source of qualifying income for mortgage purposes.
Who May Benefit
- Retirees with significant assets but limited ongoing income
- High-net-worth borrowers whose income does not reflect their financial strength
- Those with substantial investment portfolios, retirement accounts, or savings
- Borrowers who have sold a business or property and hold liquid assets
- Those who prefer not to liquidate assets to qualify for a mortgage
How It Generally Works
Asset utilization (also called asset depletion or asset dissipation) is a method some lenders use to calculate qualifying income from eligible assets. A portion of the asset value is divided over a period of time to arrive at a monthly income figure.
Not all assets qualify, and calculation methods vary by lender and program. Assets typically must be liquid or near-liquid. Retirement accounts may be subject to haircuts or age-based restrictions. Borrowers are not required to liquidate assets to use this approach.
Key Considerations
Not All Assets Qualify
Eligible asset types vary by lender and program. Retirement accounts, investment portfolios, and savings accounts may qualify. Business assets, illiquid assets, and assets with restrictions may not.
Calculation Methods Vary
Each lender applies their own methodology to calculate qualifying income from assets. The resulting income figure depends on the asset type, value, and the lender's specific formula.
No Liquidation Required
Asset utilization does not require you to liquidate your assets. The calculation is based on the value of the assets, not an actual withdrawal plan.
Retirement Account Haircuts
Retirement accounts (IRAs, 401(k)s) may be subject to a reduction (haircut) in the calculation to account for potential taxes and penalties. Age-based rules may also apply.
Asset utilization programs vary by lender. Eligible asset types, calculation methods, and qualifying income results differ. Not all assets qualify. Contact us for current program details.
Frequently Asked Questions
Significant Assets but Limited W-2 Income?
Let's explore whether asset utilization programs may be a fit for your situation.