Asset Depletion Loans in New Jersey
An asset depletion loan lets you qualify using your liquid assets instead of your income. The lender takes your eligible accounts, divides the total across a set number of months, and treats the result as monthly income for qualifying purposes.
What is an asset depletion loan?
An asset depletion loan lets you qualify using your liquid assets instead of your income. The lender takes your eligible accounts, divides the total across a set number of months, and treats the result as monthly income for qualifying purposes.
Nothing is withdrawn or pledged. It is a math exercise for underwriting, not a requirement that you spend the money.
Who is this for?
Four situations come up over and over:
- Retirees with substantial savings and modest reported income
- Someone who just sold a business and has proceeds in the bank but no current W-2
- People living off investments where the reported income is far below what they actually control
- High net worth borrowers whose tax returns show very little after structuring
The common thread: the money is clearly there, and a conventional income calculation cannot see it.
How is the income calculated?
The general shape: eligible assets, minus down payment and closing costs, divided by a set number of months. Many programs use 60 months, others use longer periods. Some conventional programs allow a version of this as well, with their own formulas.
Not every dollar counts at face value. Retirement accounts are commonly discounted, often to around 70 percent, to account for taxes and penalties. Non-liquid assets generally do not count at all.
Formulas, divisors and haircuts vary by lender and change. This is the structure, not a quote.
What assets count?
Generally eligible:
- Checking and savings
- Brokerage and non-retirement investment accounts
- Retirement accounts, usually at a discount, and often only if you are of age to access them
- Certificates of deposit
- Vested stock, depending on the program
Generally not eligible:
- Real estate equity
- Business accounts you do not solely own
- Anything borrowed or recently deposited without documented origin
- Crypto, on most programs, though this is shifting
Asset depletion in Ocean County
This program matters more here than in most of the state, and the reason is the 55+ communities.
Toms River, Manchester, Whiting, Lakewood and Berkeley have a very large population of retirees who sold a home elsewhere, have real money in the bank, and show modest income on a tax return. On paper a conventional underwriter sees a borrower who does not qualify. In reality they are among the lowest-risk borrowers in the market.
Asset depletion is usually the answer for that buyer, and most people in that position have no idea the program exists because nobody offered it to them.
Asset depletion vs bank statement loans
Different problems.
Bank statement loans are for people with strong cash flow that their tax returns understate. The income is coming in, it just is not visible after write-offs.
Asset depletion is for people whose income genuinely is low, but who hold significant assets.
If you have both strong deposits and strong assets, some lenders will let you combine approaches. That is a file-by-file conversation.
Best fit if…
- ✓You're a retiree with savings and modest reported income
- ✓You recently sold a business and have proceeds in the bank
- ✓You live off investments rather than a paycheck
- ✓Your tax returns show little after structuring
- ✓You're buying in a 55+ community in Ocean County
- ✓A conventional lender said no despite obvious assets
Spring Home Company, independent mortgage broker in Toms River, New Jersey. Licensed in New Jersey, Pennsylvania and Texas. NMLS #2741914. Sam Alpert, President and Mortgage Loan Originator, NMLS #1961555. 732-908-8040.
Informational only. Not a commitment to lend or a rate quote. Program terms, formulas and availability vary by lender and change without notice.