Asset Depletion Loans in Florida

Asset depletion loans let you qualify for a mortgage based on your assets instead of a salary. Lenders “deplete” your liquid assets, like savings or investment accounts, over time to create a theoretical income. For example, instead of pay stubs, a lender may divide your account balances by a number of months to get a monthly “income.”

This makes asset depletion mortgages ideal for buyers who have ample wealth but no steady paycheck. Retirees living off savings, self-employed entrepreneurs, and high-net-worth individuals often use these loans. In short, your bank statements do the job of W-2s here.

Who Uses Asset-Depletion Loans?

• Retirees and Early Retirees: Seniors on fixed savings or retirement accounts with little or no earned income.
• Self-Employed/Business Owners: Entrepreneurs or gig workers whose tax returns don’t show high income due to write-offs or irregular pay.
• High-Net-Worth Individuals: Wealthy buyers with large investment portfolios but minimal reported income.
• Recent Sellers/Trust Beneficiaries: People who have cash from a home or business sale or trust distributions and want to buy a property before setting up a traditional income source.

Each of these borrowers may have plenty of assets but not the pay stubs to show it. Asset depletion loans solve that by counting assets as income.

Calculating Income from Assets

Lenders convert your assets into qualifying income using a simple formula. They add up all eligible assets (bank balances, investments, etc.), then divide by a set number of months.

• • $1,000,000 ÷ 360 = $2,778 per month.

• • $1,000,000 ÷ 60 = $16,667 per month.

Keep in mind: lenders often discount certain assets. Retirement accounts may only count for 60–80% of their value, while cash and brokerage accounts usually count at 100%. Illiquid assets, like real estate equity or private businesses, typically don’t count.

Example: $1 Million in Assets

If you have $1,000,000 in qualifying assets:

• Under the 30-year formula: about $2,778 per month income (~$33,300/year).
• Under a 60-month rule: about $16,667 per month income (~$200,000/year).

This shows how the depletion method chosen can greatly impact how much home you qualify for.

Qualifying Asset Types

• Cash and Bank Accounts: Checking and savings accounts (100% of value).
• Investment Accounts: Stocks, bonds, mutual funds (often 80–100% counted).
• Retirement Accounts: IRAs, 401(k)s, pensions (usually 70–80%).
• Certificates of Deposit (CDs) and Money Market: Fully counted.
• Annuities or Trust Funds: If liquid and withdrawable.

Excluded assets often include real estate equity, business ownership stakes, and cryptocurrency.

Why Florida Is a Hot Market for Asset Depletion Loans

Florida’s demographics and housing market make asset depletion loans especially useful:

• The state has over 4.9 million residents aged 65+, more than 21% of the population.
• Florida’s no state income tax attracts wealthy retirees and second-home buyers.
• The median Florida home price is about $412,000, near record highs.
• In some markets like Naples, as many as 60% of home sales are all-cash.

With so many retirees, investors, and second-home buyers, Florida is a prime market for asset-based lending.

Pros and Cons of Asset Depletion Loans

Pros:

• Use wealth as income.
• Works for primary, vacation, and some investment properties.
• No need for W-2s or tax returns.
• Keep investments intact instead of selling.
• Flexible qualifying for large loan amounts.

Cons:

• Higher credit scores and down payment requirements (20–30% down is common).
• Need significant assets (often $1M+ for jumbo loans).
• Some lenders only count part of retirement funds.
• Interest rates may be higher than conventional loans.
• Fannie Mae programs exclude investment properties and cash-out refinances.

Other Loan Options Compared

Tips for Qualifying in Florida

• Strong Assets: Aim for $1–2M in assets for jumbo loans.
• Documents Ready: Gather 2–3 months of statements for all accounts.
• Good Credit: Scores above 620 are required, often higher for large loans.
• Reserves: Keep extra funds after closing (3–6 months’ expenses).
• Choose the Right Lender: Not all lenders offer asset depletion loans, especially for second homes or investments.

Why Work with Truss Financial Group?

Asset depletion loans involve unique rules, and not every lender understands them. Truss Financial Group specializes in asset-based lending and works with both conventional and non-QM programs.

By working with Truss financial group, you’ll have:

• Guidance on which assets qualify and how much income they generate.
• Access to lenders offering flexible depletion methods (30-year, 7-year, or 5-year).
• Experience in Florida’s market with retirees, investors, and second-home buyers.
• A streamlined approval process with less paperwork and stress.

If you have strong savings or investments but lack a steady paycheck, an asset depletion loan may be your best path to financing your Florida home. Contact Truss Financial Group today to explore your options.

FAQs About Asset Depletion Loans in Florida

1. What is the minimum asset amount needed for an asset depletion loan?

Most lenders want to see at least $500,000 to $1 million in liquid or retirement assets. Jumbo loans often require more.

2. Do retirement accounts count toward asset depletion?

Yes, but usually at a reduced percentage (often 60–80%) to account for taxes and penalties. Cash and brokerage accounts usually count at 100%.

3. Can I use an asset depletion loan for an investment property in Florida?

Conventional (Fannie Mae) programs do not allow it, but non-QM lenders often do. Many Florida buyers use these programs for second homes or rental properties.

4. Do I have to liquidate or sell my assets to qualify?

No. Assets are used on paper only to calculate income. You don’t have to withdraw or sell them.

5. Are interest rates higher on asset depletion loans?

Rates can be slightly higher than conventional loans because they are considered non-traditional. However, strong credit and large assets often help secure competitive terms.

6. Can a self-employed borrower use asset depletion instead of a bank statement loan?

Yes. If you have substantial assets but don’t want to document business income, asset depletion is a flexible alternative.

7. Is Florida a good place to use an asset depletion loan?

Yes. With 21% of residents over age 65, many Florida buyers rely on savings, retirement funds, or investment accounts instead of a paycheck. Asset depletion loans are especially popular for retirees and second-home buyers.