Asset Depletion Guide
How Does Asset Depletion Income Work?
From eligible accounts to monthly DTI income — the step-by-step math behind asset depletion Non-QM qualifying.
The Calculation in Four Steps
Every asset depletion program follows the same core logic — only the haircuts, reserve rules, and eligible account types change by investor.
Example Scenario
An Indiana retiree holds $800,000 in eligible accounts: $200,000 cash, $400,000 brokerage, and $200,000 IRA. After program haircuts (100% cash, 80% brokerage, 70% IRA), usable assets total $780,000.
Subtract $160,000 down payment, $15,000 closing costs, and $45,000 reserves (6 months PITIA). Depletion base: $560,000. On a 30-year term (360 months), monthly depletion income ≈ $1,556 — plus any Social Security or pension already documented.
This is illustrative only. Ryan & Steve run your actual balances against current investor haircuts and reserve rules before you apply.
Guidelines vary by investor, credit, and loan amount. This example is educational — not a guarantee of approval or income amount.
Formula at a Glance
Monthly income =
(Eligible assets × haircuts − down payment − reserves − closing costs) ÷ loan term in months
What Changes Your Income Number
Small shifts in term, equity, or account mix can move qualifying income significantly.
Keep Exploring
Related asset depletion guides and Non-QM resources from Ryan & Steve.
What Is an Asset Depletion Loan?
Overview of asset-based Non-QM and who it helps.
What Assets Can Be Used for Asset Depletion?
Eligible account types, haircuts, and common exclusions.
How Much Money for an Asset Depletion Loan?
Portfolio size vs. loan amount, term, and reserve requirements.
Asset Depletion Loans Overview
Full program hub and application steps.
2MG Daily
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Frequently Asked Questions
How is asset depletion income calculated?
Lenders start with eligible liquid accounts, apply program haircuts to each asset type, subtract down payment and required reserves, then divide the remaining usable balance by the loan term in months. That monthly figure is added to any other qualifying income for DTI.
What is an asset haircut?
A haircut is the percentage of an account balance a lender counts as usable — often 100% for cash, 70–100% for brokerage, and 60–70% for retirement accounts. Haircuts reflect liquidity risk and market volatility.
Do I have to liquidate my assets at closing?
No — asset depletion is an income calculation method. You typically keep assets invested and documented with recent statements. Some programs require proof accounts remain accessible after closing.
Does the loan term affect qualifying income?
Yes — the same portfolio produces higher monthly income on a shorter term because the usable balance is divided by fewer months. A 15-year amortization yields more depletion income than a 30-year on identical assets.
Want Your Depletion Income Calculated?
Ryan & Steve will run your portfolio against current investor haircuts and reserve rules before you apply.
The 2 Mortgage Guys
Ryan Minick and Steve DeLon — Branch Managers & Senior Loan Officers at Luminate Bank. Based in Kokomo, Indiana. Lending nationwide since 2005.
Contact
Ryan Minick NMLS# 203249
Steve DeLon NMLS# 202876
Luminate Bank NMLS# 1281698
Kokomo's Mortgage Team. Lending Nationwide.
1221 Appletree Lane, Kokomo, IN 46902
Luminate Bank NMLS 1281698 Bank Headquarters 2523 S. Wayzata Blvd., Suite 100 Minneapolis, MN 55405 (952) 939-7200. This is not an offer to enter into an agreement. Information provided is outlining the minimum down payment requirements as allowed by specific loan program and product guidelines and any information, rates and programs are subject to change without prior notice and may not be available in all states. All loans are subject to credit and property approval. Luminate Bank is not affiliated with any government agency. All rights reserved.
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