Asset Depletion Loans in San Diego2026 Guide for High-Asset Borrowers
Qualify using your investment portfolio, retirement accounts, and liquid assets — no employment income required. Perfect for retirees, early retirees, and high-net-worth individuals across San Diego and California.
Quick Answer
What is an asset depletion loan in California?
An asset depletion loan (also called asset dissipation) qualifies borrowers using liquid assets instead of employment income. Lenders divide eligible assets (checking, savings, investments, retirement at 60-70%) by 240-360 months to calculate theoretical monthly income. No W-2s or tax returns needed. Ideal for retirees, high-net-worth individuals, and those with significant savings.
— Cascada Mortgage Advisors, Inc.
What Is an Asset Depletion Loan?
An asset depletion loan (also called asset dissipation or asset-based mortgage) is a Non-QM program that allows borrowers to qualify using their liquid assets rather than traditional employment income. Instead of W-2s or tax returns, lenders divide your eligible assets by a set number of months to calculate a theoretical monthly income.
This program is designed for San Diego's affluent retirees, early retirees, trust beneficiaries, and high-net-worth individuals who have substantial wealth but limited or no monthly income on paper — a common situation in expensive coastal markets like La Jolla, Coronado, Del Mar, and Rancho Santa Fe.
Consider a retired executive in Coronado with a $3M investment portfolio. Their tax returns might show only $40,000 in Social Security income — nowhere near enough to qualify for a $1.5M home conventionally. But with asset depletion, the lender counts the portfolio as a theoretical income stream: ($3M − $375K down) ÷ 360 months = $7,292/mo in qualifying income, plus the Social Security. Suddenly, that $1.5M beachfront condo is within reach.
As an independent mortgage broker, Cascada Mortgage Advisors, Inc. works with over 50 wholesale lenders offering asset depletion programs. This gives us access to a wide range of depletion periods, asset discount factors, and loan amounts — including super-jumbo asset depletion loans up to $10M.
Qualifying Income = (Total Eligible Assets − Down Payment) ÷ Depletion Months
Example: ($2,000,000 − $400,000) ÷ 360 = $4,444/mo qualifying income
Eligible Asset Types & Discount Factors
Not all assets are treated equally. Lenders apply discount factors to account for taxes, penalties, and liquidity risk.
| Asset Type | Counted At | Notes |
|---|---|---|
| Checking & Savings | 100% | Fully liquid, no discount |
| Stocks, Bonds, ETFs | 100% | Marketable securities at current market value |
| Mutual Funds | 100% | Including index funds & target-date funds |
| Money Market / CDs | 100% | Early withdrawal penalties may reduce CD value |
| Brokerage Accounts | 100% | Including margin accounts (non-leveraged portion) |
| Trust Accounts | 100% | Must have borrower access; irrevocable trusts may vary |
| 401(k) / 403(b) | 60–70% | Discounted for taxes & early withdrawal penalties |
| Traditional IRA | 60–70% | Tax-deferred; discount reflects future tax liability |
| Roth IRA | 70–100% | Higher factor for borrowers 59½+ (no penalties) |
Eligible Assets
- Checking & savings accounts
- Stocks, bonds, mutual funds, ETFs
- Money market accounts & CDs
- Brokerage accounts
- 401(k), IRA, 403(b) (discounted)
- Roth IRA
- Trust accounts with borrower access
Generally Not Eligible
- Real estate equity (illiquid)
- Business ownership / private equity
- Cryptocurrency (most lenders)
- Collectibles, art, or jewelry
- Unvested RSUs or stock options
- Annuities with surrender penalties
- Funds in foreign institutions (varies)
How Lenders Calculate Qualifying Income
The asset depletion formula is straightforward, but understanding the variables is critical to maximizing your qualifying income.
Step 1: Sum Eligible Assets
Add all eligible liquid assets at current market value. Apply discount factors to retirement accounts.
$800K checking + $1.2M brokerage + $500K IRA (×70%) = $2,350,000
Step 2: Subtract Down Payment & Closing Costs
Remove funds allocated to the purchase transaction.
$2,350,000 − $400,000 (down) − $15,000 (closing) = $1,935,000
Step 3: Divide by Depletion Period
Lenders typically use 240, 360, or 480 months. Shorter periods yield higher income.
$1,935,000 ÷ 360 months = $5,375/mo qualifying income
Step 4: Add Other Income (If Any)
Social Security, pensions, or part-time income can supplement the depletion income.
$5,375 + $3,200 (Social Security) = $8,575/mo total qualifying income
Ideal Borrower Profiles
If you have significant wealth but your income doesn't reflect your financial strength, asset depletion bridges that gap.
Retirees
Social Security and pension alone don't qualify — but your 401(k) and IRA do
Early Retirees (FIRE)
Left the workforce early with substantial savings but no W-2 income
Trust Fund Beneficiaries
Wealth held in trusts or inherited portfolios with limited distributable income
High-Net-Worth Individuals
Significant investments but income structured for tax optimization
Downsizers & Relocators
Selling a paid-off home and using proceeds to purchase with no employment
Self-Employed with Strong Assets
Business owners whose tax returns don't reflect true wealth
Asset Depletion Loan Requirements (2026)
Minimum Assets
$500K–$1M+ in eligible liquid assets after down payment (varies by lender)
Credit Score
680+ for most programs; 720+ for best rates and highest LTV
Down Payment
20–30% typical; some programs allow 10% with 740+ credit
Depletion Period
240–480 months depending on lender; longer periods = lower qualifying income
DTI Ratio
Up to 43–50% based on the calculated depleted income
Property Types
Primary residence, second home, and investment properties (1–4 units)
Reserves
6–12 months PITIA in addition to down payment and closing costs
Loan Amounts
$200K – $5M+; ideal for jumbo and super-jumbo purchases
Down Payment Options for a $2M Home
How down payment size affects your depletion income and loan qualification.
| Down % | Down Amount | Loan Amount | Net Depletable* | Qualifying Income |
|---|---|---|---|---|
| 10% | $200,000 | $1,800,000 | $2,800,000 | $7,777.78/mo |
| 15% | $300,000 | $1,700,000 | $2,700,000 | $7,500.00/mo |
| 20% | $400,000 | $1,600,000 | $2,600,000 | $7,222.22/mo |
| 25% | $500,000 | $1,500,000 | $2,500,000 | $6,944.44/mo |
| 30% | $600,000 | $1,400,000 | $2,400,000 | $6,666.67/mo |
*Assumes $3M total liquid assets, 360-month depletion. Higher down payment reduces net depletable assets but also reduces the loan amount needed.
Pros and Cons of Asset Depletion Loans
Advantages
- No employment or W-2 income required
- Assets remain invested — no liquidation
- Can supplement with Social Security or pension
- Available for primary, second home & investment
- Loan amounts up to $5M+
- Faster closing than conventional (3–4 weeks)
- No PMI on most programs
Considerations
- Interest rates 0.5–1.5% higher than conventional
- Requires 20–30% down payment (typically)
- Minimum $500K–$1M in eligible assets
- Retirement accounts discounted 30–40%
- Higher reserve requirements (6–12 months)
- Not available through all lenders
- Market declines can reduce qualifying amount
Asset Depletion vs. Conventional vs. Jumbo
| Feature | Asset Depletion | Conventional | Jumbo |
|---|---|---|---|
| Income Source | Liquid assets / depletion | W-2s & tax returns | W-2s & tax returns |
| Employment Required | No | Yes — 2-year history | Yes — 2-year history |
| Best For | Retirees, HNWI | W-2 employees | High-income earners |
| Down Payment | 20–30% | 3–20% | 10–20% |
| Credit Score | 680+ | 620+ | 700+ |
| Rates | Higher (+0.5–1.5%) | Lowest | Slightly above conforming |
| Max Loan Amount | $5M+ | $1,149,825 | $3M+ |
| Reserves | 6–12 months | 0–6 months | 6–12 months |
| Closing Speed | 3–4 weeks | 30–45 days | 30–45 days |
San Diego Payment Examples
Based on 7.00% rate, 30-year fixed, 25% down. Does not include taxes or insurance.
| Home Price | Down (25%) | Loan Amount | Monthly P&I |
|---|---|---|---|
| $1,000,000 | $250,000 | $750,000 | $4,989.77 |
| $1,500,000 | $375,000 | $1,125,000 | $7,484.65 |
| $2,000,000 | $500,000 | $1,500,000 | $9,979.54 |
| $3,000,000 | $750,000 | $2,250,000 | $14,969.31 |
San Diego Borrower Case Studies
Retired Couple in Coronado
Outcome: Recently retired executive couple with $3,800/mo Social Security. Tax returns showed minimal income due to Roth conversions. Asset depletion plus SS qualified them for a $1.5M beachfront condo.
Early Retiree (FIRE) in Encinitas
Outcome: 43-year-old tech professional retired at 40 with $1.8M portfolio. No W-2 income for 3 years made conventional impossible. Asset depletion qualified for a $1M home purchase with 20% down.
Trust Beneficiary in La Jolla
Outcome: Beneficiary of a family trust with $5.5M in liquid holdings. Trust distributions were minimal and inconsistent. Asset depletion from the trust qualified for a $3M La Jolla estate purchase.
Asset Depletion Calculator
Enter your liquid assets to see how much qualifying income they generate and what you can afford
Asset & Loan Inputs
Your Qualifying DTI
108.8%
Above 50% — increase assets or reduce loan
DTI = Total Payment ÷ Qualifying Income × 100
$4,836.81 ÷ $4,444.44 = 108.8%
* Estimates only. Eligible asset types and depletion periods vary by lender. Retirement accounts may be discounted to 60–70% of value.
Frequently Asked Questions About Asset Depletion Loans
Free Mortgage Resources
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Let Your Assets Work for You
Don't let retirement or a non-traditional income keep you from San Diego homeownership. We work with 50+ wholesale lenders offering asset depletion programs for high-net-worth borrowers.