Asset-Based / Asset Depletion Jumbo Loan
The Asset-Based / Asset Depletion Jumbo Loan is a specialized mortgage program designed for high-net-worth individuals who may not have traditional income documentation but hold substantial liquid assets. Instead of relying solely on employment income, lenders calculate “income” by converting a borrower’s qualifying assets into a monthly cash-flow equivalent.
What Is an Asset-Based Jumbo Loan?
An Asset-Based or Asset Depletion loan allows a borrower to qualify for a mortgage based on assets rather than income. The lender reviews liquid assets (bank accounts, investment portfolios, retirement accounts, etc.) and calculates how much monthly income those assets could generate over time, making it possible for retirees, business owners, or investors to qualify for high-value mortgages.
How It Works
- Loan Amounts: Typically $1M–$10M+.
- Down Payment: Usually 20%–30%.
- Credit Score Requirement: 700+ (strong credit required).
- Eligible Assets: Checking, savings, money market accounts, stocks, bonds, vested retirement funds (401k, IRA), and in some cases, business accounts.
- Income Calculation: Lenders divide verified assets by a set term (commonly 120 or 360 months) to calculate monthly qualifying income.
- Reserves: Often 12–24 months of reserves required.
- Property Types: Primary residences, second homes, and some investment properties.
Benefits of Asset-Based Jumbo Loans
- Perfect for high-net-worth borrowers without steady income.
- Allows qualification using liquid assets rather than tax returns.
- Large loan amounts available for luxury properties.
- Flexibility with both fixed and ARM jumbo options.
- No need to liquidate investments — assets remain intact while being used to qualify.
Fun Facts & Insider Details
- Retiree Friendly: A common choice for retirees with large retirement savings but limited fixed income.
- Entrepreneur Solution: Business owners who reinvest earnings back into their companies often use asset depletion loans.
- Portfolio Loans: Many lenders keep these in-house, so guidelines vary.
- Different Formulas: Some lenders divide assets over 120 months (10 years) instead of 360, which can make income look higher.
- Restricted Assets: Not all assets count (e.g., unvested stock options or certain business assets may be excluded).
Who Is the Best Candidate for an Asset-Based Jumbo Loan?
- Retirees with significant assets but limited income.
- High-net-worth borrowers who prefer not to rely on employment verification.
- Business owners or investors with irregular or non-traditional income streams.
- Buyers of luxury or multi-million-dollar properties who want flexible qualification.
FAQs – Asset-Based / Asset Depletion Jumbo Loans
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Do I have to liquidate my assets?
No. Assets are only used for qualification purposes — they remain in your accounts.
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Can retirement accounts count as assets?
Yes, vested retirement accounts can qualify, though lenders may discount their value (e.g., 70% of balances).
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Do all lenders use the same formula?
No. Each lender sets their own calculation rules — some use 120 months, others 360.
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Can I use business assets?
Sometimes, but lenders usually require documentation showing you have full access to the funds.
Next Step
If you have significant assets but limited traditional income, an Asset-Based Jumbo Loan may be the ideal solution to finance your luxury property.
- Llámenos: 305-440-1507
- Correo electrónico: info@torresnc.com
⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.
