Freddie Mac Asset Depletion

Freddie Mac Asset Depletion Mortgage Lending Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

This blog will cover and discuss Freddie Mac asset depletion mortgage lending guidelines. The Freddie Mac Asset depletion mortgage loan program is a great mortgage loan program for wealthy borrowers who can use their assets instead of providing income documents. Can you get a mortgage if you have many investments or savings but little or no income? Using asset depletion, you can often convert assets into income (for mortgage-qualifying purposes).

The following paragraphs will cover the Freddie Mac asset depletion mortgage lending guidelines.

What is an Asset Depletion Mortgage?

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Asset depletion means using or depleting your savings over time to pay living expenses. For instance, when you retire, you might not be earning income, but you can continue to live normally because you use your savings to pay your mortgage and other costs. The typical way for mortgage lenders to calculate asset depletion income is to take some percentage of your savings, investment, or retirement account, divide it by the number of months in your loan term (360 months for a 30-year mortgage), and add that amount to your qualifying income.

How Are Assets Used To Determine the Ability to Repay on Asset-Depletion Mortgages?

The percentage depends on the type of account. You can use 70% of stocks and bonds, 60% of retirement funds, and 100% of cash in a savings account.  Suppose that you have $300,000 in stocks and bonds.

A lender might multiply that by .7 to get 70%, which is $210,000. Divide that amount by 360 months for a 30-year loan, and you get to add $583 per month to your qualifying income.

Last year, however, Freddie Mac revised its guidelines, and they are a lot more generous.  In this article, we will discuss the Freddie Mac asset depletion guidelines. We will detail how to use your assets as qualifying income and review the changes Freddie Mac implemented.

See if you qualify for an asset depletion mortgage.

How Does Freddie Mac Asset Depletion Work?

The new rule per Freddie Mac Asset Depletion: A borrower may use 70% of the balance of an investment account and divide that number by 240 months. The result may be used as a qualifying monthly income. Under the new guidelines, you’d still be able to deplete $210,000 of $300,000 in savings. But now you get to add $875 per month to your qualifying income because you’re dividing by 240 instead of 360.

Am I Eligible for Freddie Mac Asset Depletion?

Not everyone is eligible for an asset depletion loan under Freddie Mac. You have to meet these requirements. Your maximum loan is 80% of the property value. You cannot use asset depletion for cash-out refinancing. The property must be a 1- to 2-unit primary or second home with no rentals. In addition, you must meet all other Freddie Mac underwriting guidelines—for example, credit score minimums and maximum debt-to-income ratios.

How Old Do You Have To Be To Use Asset Depletion Freddie Mac?

Freddie Mac, one of the major government-sponsored enterprises in the U.S. that supports the mortgage market, does not set a minimum age requirement for using asset depletion as a method of mortgage qualification. Instead, eligibility for an asset depletion mortgage under Freddie Mac guidelines primarily focuses on the borrower’s financial assets and the ability to use those assets to repay the mortgage.

Therefore, any borrower, regardless of age, can use asset depletion as part of their qualification for a mortgage if they have significant liquid assets. The key factors are the total value of the assets and whether these can adequately cover the loan payments and other expenses over the mortgage term rather than the borrower’s age.

This makes asset depletion loans particularly attractive to older borrowers, such as retirees who might not have a regular income but have substantial savings and any borrower whose income is irregular or non-traditional and who has substantial liquid assets.

What Are The Types of Borrowers Who Benefit From Asset Depletion Mortgages?

Asset depletion mortgages can help anyone with income challenges qualify for a mortgage. This includes retired applicants and those living off their savings (perhaps in addition to social security or pension income).

Self-employed borrowers whose taxes show less income than what’s available to pay their mortgage. Other borrowers need to show more income or have difficulty proving their income.

Asset depletion is an additional tool to help you qualify for a mortgage more easily. Even boosting your qualifying income by $200 a month can make the difference between being approved or declined for a home loan.

Related: Non-QM Asset Depletion Mortgages (Tax Returns Not Required)

Traditional vs. Freddie Mac Asset Depletion Mortgages

We have offered asset depletion loans for non-QM mortgages for a long time. Non-QM loans often offer more flexible guidelines; some allow you to deplete higher percentages of assets (90% instead of 70%, for example) or divide assets by lower numbers (for example, 60 months instead of 240 months) to come up with qualifying income.

You may not need tax returns to qualify for asset depletion with a non-QM loan. Many Americans do not know that you can obtain a conventional mortgage without the standard forms of income. Non-QM asset depletion loan interest rates are usually slightly higher than Freddie Mac loans.

Mortgage Lenders Experts on Asset-Depletion Loans

While we are unsure what sparked the change in the guidelines, we believe it concerns the average American’s mortgage loan length. Most Americans sell or refinance their home within 5 and 1/2 years.

Apply now for an asset depletion mortgage

Asset-depletion mortgages can help thousands of Americans qualify for home loans. If you have income challenges but are sitting on a nice nest egg, please contact Gustan Cho Associates for more information. For questions about asset depletion or mortgages, contact Gustan Cho Associates at 262-716-8151. Text us for a faster response. You can also e-mail us at

Asset Depletion Mortgage Guidelines For Borrowers Without Income 

Freddie Mac Asset Depletion

Non-traditional mortgages came to an abrupt halt after the 2008 mortgage meltdown. Popular loan programs such as stated income, no-doc, bank statements, and asset depletion loans abruptly stopped. The good news is that alternative financing is coming back. Gustan Cho Associates now offers the following:

Asset Depletion Eligibility Requirements

Every lender has different asset depletion guidelines. Gustan Cho Associates has multiple asset depletion investors. We have lenient asset deletion guidelines. Our Asset Depletion Guidelines are not set in stone. We can make exceptions if borrowers do not meet one or two asset depletion guidelines. Many of these alternative loan programs discontinued after the 2008 mortgage and credit collapse are returning.

Benefits of Asset Depletion Mortgages

Many home buyers, especially retirees, have limited or no traditional income. However, they have assets. Some people have well over six figures in assets. With our asset depletion mortgage program, borrowers with many assets but little to no traditional income can now qualify for home mortgages. This unique home loan program allows borrowers with substantial assets and low to no income to qualify for home loans.

Freddie Mac Asset Depletion Mortgages for Self-Employed Borrowers

Borrowers benefit from Freddie Mac asset depletion loans as business owners who declare low income or losses on their income tax returns but have substantial assets. Also, retired borrowers have substantial assets in their retirement or stock/securities investment accounts.

Until now, only borrowers with qualified income and employment histories could qualify for home mortgages. Now, borrowers with substantial assets with no income can qualify for mortgages with Freddie Mac asset depletion loans.

Get Help For Feddie Mac Asset Deletion Mortgage

How Do Lenders Calculate Income On Freddie Mac Asset Depletion Mortgages

Generally, the calculation is a borrower’s total assets divided by a set number of months, such as 360 for the standard 30-year loan. Qualifying assets tend to be only liquid assets such as cash, investment accounts, and retirement accounts.  Dale Elenteny is our Freddie Mac Asset Depletion Mortgage Expert and a senior loan officer at Gustan Cho Associates.

Here is how Dale Elenteny summarizes the Freddie Mac Asset Depletion Income Calculation:

Freddie Mac Asset depletion is a calculation where a borrower’s liquid assets are entered into a calculation to bring up the monthly income they have to make mortgage payments.

100% of the assets in cash and non-retirement liquid investment accounts typically qualify. For retirement accounts, the amount that qualifies is generally about 70% of the asset base and could potentially be close to 100% if the borrower is over 591/2 years old. Each lender has different asset depletion guidelines, but the concept is different. Check with your lender to see what they will use in their calculation.

Can I Get a Mortgage If I Have Assets But No Income?

Many homebuyers do not have a steady source of income but have substantial assets. One of the frequently asked questions from senior homebuyers is: Can I get a mortgage if I have assets but no income? The answer is yes. Borrowers can qualify for a mortgage without traditional income.

Asset-based loans are available as a mortgage option to be used sourcing income versus standard income.  As mentioned earlier,

Gustan Cho has various Freddie Mac asset depletion guidelines. Let’s take an example of one of Dale Elenteny’s borrowers who qualified for a particular asset depletion loan program. The borrower had no job but $200,000 in cash and $700,000 in an IRA account. The borrower is buying a $250,000 home in Illinois.

How Underwriters Calculate Income on Freddie Mac Asset Depletion Mortgages

We have a program that will take the sum of all liquid assets and divide the sum by 60 months. The yielding figure is the qualified monthly income. In this case, add the $200,000 and $700,000 together. The sum is $900,000. Then divide $900,000 by 60 months. This figure yields $15,000. The borrower’s qualifying income is $15,000 per month.

The down payment required for this asset depletion program is a 15% down payment on a home purchase. So the loan amount is $212,500. Our investor requires the borrower to have at least 110% of the loan amount, or $233,750 in assets. This borrower has $900,000 more assets than the minimum required. This borrower has a loan approval and is scheduled to close soon.

Qualifying For Freddie Mac Asset-Depletion Loan Program

Borrowers who do not have a regular source of income but have assets can now qualify for the Freddie Mac asset depletion mortgage. The asset depletion loan program is ideal for wealthy borrowers with substantial assets but no regular traditional income source.

Many wealthy individuals may have assets but not traditional income. Many retirees and business owners are ideal borrowers who can benefit from the asset depletion loan program.

Please get in touch with Gustan Cho Associates Mortgage at 800-900-8569. Text us at the toll-free number for a faster response. You can also email us at Gustan Cho Associates has multiple asset depletion loan programs. If you have assets, we will match you with a perfect asset depletion loan program. Our asset depletion mortgage loan programs are for primary owner-occupant homes, second homes, and investment properties.

FAQs on Freddie Mac Asset Depletion Mortgage Lending Guidelines

1. What is an Asset Depletion Mortgage? Borrowers can use their savings and investments to qualify for a mortgage through an asset depletion mortgage instead of relying on traditional income documentation.

This type of mortgage allows liquid assets to be used as proof of qualification. Lenders convert a portion of these assets into a qualifying monthly income by applying a specific formula, usually involving a percentage of the assets divided by the loan term.

2. How are assets used to determine the ability to repay asset-depletion mortgages? Assets like stocks, bonds, and retirement funds are calculated at different percentages (e.g., 70% for stocks and bonds) to determine the amount that can be treated as income. For example, $300,000 in stocks might equate to $210,000 multiplied by 70%, which is then divided over the loan term to add to a borrower’s qualifying income.

3. How does Freddie Mac Asset Depletion work? Under the revised Freddie Mac guidelines, borrowers may use 70% of their investment account balances, divided by 240 months, as their qualifying monthly income. This change allows borrowers to increase their monthly qualifying income, making it easier to qualify for a mortgage.

4. Am I eligible for Freddie Mac Asset Depletion? Eligibility for a Freddie Mac asset depletion mortgage requires meeting specific criteria, such as a maximum loan-to-value ratio of 80%, property restrictions (1- to 2-unit primary or second homes without rentals), and adherence to Freddie Mac’s underwriting guidelines, including credit scores and debt-to-income ratios.

5. How old do you have to be to use asset depletion with Freddie Mac? There is no minimum age requirement for using asset depletion to qualify for a Freddie Mac mortgage. The qualification is based on the value of your assets and their ability to cover loan payments and expenses, rather than age, making it a viable option for retirees or anyone with significant assets but less regular income.

6. What types of borrowers benefit from asset depletion mortgages? Asset depletion mortgages are particularly beneficial for retirees, self-employed individuals, and others who may not have a steady income but possess substantial assets. They allow these individuals to use their assets to qualify for mortgages, potentially expanding their options for home financing.

7. Traditional vs. Freddie Mac Asset Depletion Mortgages? Traditional asset depletion loans have been part of non-QM mortgages, offering flexible guidelines and sometimes requiring no tax returns. Freddie Mac’s version typically offers more competitive rates. Still, it may have stricter guidelines, such as the percentage of assets used and the division period for calculating income.

8. Can I get a mortgage if I have assets but no income? Asset-based loans allow borrowers with substantial assets but no regular income to qualify for mortgages. These loans use the assets as a source of income, enabling many to buy homes even without traditional income sources.

9. How do lenders calculate income on Freddie Mac asset depletion mortgages? Income is calculated by dividing the borrower’s total liquid assets by a predetermined number of months (e.g., 240). This calculation determines how much of the assets can be considered monthly income for mortgage qualification purposes.

10. How can I qualify for a Freddie Mac Asset-Depletion Loan Program? You must demonstrate sufficient liquid assets to cover the loan payments and meet other Freddie Mac underwriting requirements to qualify. This program is especially useful for wealthy individuals who may not have a regular income but have significant assets.

Potential borrowers should consult directly with mortgage professionals or contact Gustan Cho Associates, specializing in asset depletion mortgages, for more detailed information or specific queries.

This blog about Freddie Mac Asset Depletion Mortgage Lending Guidelines was updated on April 17th, 2024.

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  1. Do I have to be 62 years of age to use a non retirement account for asset depletion. I have 4.6 million in a stock account. Can I use these assets to qualify for the program you mentioned above.

    1. There is no age requirement on asset depletion mortgage loan programs. Please reach out to us at or call us at 262-716-8151. Text us for a faster response. What state are you in?

  2. Which asset depletion mortgage has the lowest rates? Freddie Mac Asset Depletion or Non-QM Mortgage? What type of lenders offer Freddie Mac Asset Depletion mortgages and which type lenders offer Non-QM asset depletion mortgages? I am retired with substantial assets and will be buying a new retirement home first half of 2022. Also, are these type loans available in “construction loan” format? I may buy land sooner and then build next year. Thank you for your assistance.

  3. What if you lock a 15 year fixed loan in. Can you divide by 180 months, and not by 240 months?

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