Loan Programs
Self Employed $$$
E-Z Qual Line-25% Down
580 FICO Score OK
High Ratio FHA Loans
FHA vs 5% Down Conv
FHA 2nd Home OK
MFG Homes
Audio Application
Funding Steps
Mortgage Payment Calculator
Declined Loans
50 Loan Killers
Lending Corner
QM-2014 Rules
Buying Do's & Don'ts
Loan Killers
Changing Lenders
Gift $ Transfer
Co-signer Regs
BK Wait Times
Brokers vs Direct Lenders
RE Agent Corner
Forms And Docs
Open House Worksheets
Condo Sert Steps
Seller Carry Back Rules
Short Seller Cancelling?
Getting Highest Appraisal
FHA Flips
Agent Marketing
Renter Marketing
Renting vs. Owning
Loan Re-Sets
Legal Corner
Lending Law
Family Leave Discrimination
Loan Mod Info
FICO Myths
Credit Scoring
Reverse Mortgages
Consumer Finance Protection Bureau
Debt Collection Process
Life After BK
Tax Info
Surviving IRS Audit
401/IRA Down Payment
Intra Family Mortgages
Gifting A Home
Mortgage Relief Act
Marine Pics
Commercial Loans
Hard Money
2014 DPA's
Short Sale Rent Back

Protected by Copyscape Plagiarism Detector  

 Asset Depletion Financing
 Min. Fico: 680
Max LTV: 70%
Max Loan Amount: $5 million

This mortgage program can prove invaluable when working with high end borrowers and investors who have liquid assets (stocks, bonds, mutual funds, IRAs, cash reserves).

Often, the borrower is self-employed and their tax returns do not indicate enough income to qualify. (Note: ACM only needs one year tax return for self employed borrowers to qualify).

 Or maybe the borrower is retired with a pension, living on social security and has no (or marginal) employment.

In either of these situations the borrower can still qualify.

"Asset Depletion" is an underwriter’s tool to use a borrower’s "liquid" assets to provide more income to qualify 1003 by calculating a return on the borrower’s liquid assets.                    

Although this makes perfect sense, it is unconventional for an underwriter to approve a borrower using assets as income.

However, our underwriters understand the logic in approving a borrower who has demonstrated their ability to save and accumulate assets. 
assets graph



Ø  Income:  Borrower’s income is $5,000/month but DTI is too high to qualify.

Ø  Assets:  Borrower is 73 years old with $1,000,000 in liquid assets, including a stocks and a retirement account.

Ø  Calculation:   $1,000,000 at 5% over a 12-year amortization:

The underwriter uses Asset Depletion to help with the DTI by running a mortgage calculation at 5% over a 12 year amortization on the borrower’s $1,000,000 assets.  Why a 12-year amortization?  Because the borrower’s age (73) allows for a 12 amortization based on the borrowers life expectancy of 85 years.

Ø  Calculation Grid:  (click here) – My Asset Depletion Calculation GRID gives you a close estimate of what income you may use on the 1003 based on the borrower’s age.

Ø  Result$9,249/month additional income for qualifying purposes…goes on the 1003 under “Other Income”. This amount is added to his existing $5,000 income so now he has $14,249/month for qualifying purposes.                                                                                                                                                                    


ü  The target DTI…is always 40% with flexibility for the right scenarios (i.e., low LTV or higher assets).

ü  Eligible Assets…must be cash or cash equivalent, trust funds, investment portfolios (stocks, bonds, mutual funds), fully vested stock options and retirement accounts only if the borrower is of retirement age.  

Ineligible Assets include equity in REO, private stock, annuities, and retirement accounts if the borrower is not of retirement age (64 years old). 

Asset Depletion may not be used for Foreign Nationals.

ü  Income Sources…the borrower may use any existing income plus income from Asset Depletion.  However, if your borrower qualifies with the income from asset depletion alone, then that will be sufficient and no other income will be required. 

However, your borrowers must always supply tax returns.

ü  Pledged Assets…Asset Depletion can be used together with Pledged Assets. 


Cell: 949 250-3981
Copy written April 2004…Daniel Dobbs, Broker
1% Down FHA - 5% Down Conventional vs. FHA - 50 Reasons Loans Are Declined - 401/IRA Down Payment - 580 FICO Score OK - Amended Tax Returns - Bankruptcy Basics - Brokers vs Direct LendersBuy & Bail Restrictions LiftedBoomerang Buyer Wait Times - Buying For Resale - Changing Lenders - ChecklistsCommercial LoansCondo Cert Steps - Consumer Protection Bureau - Co-signers Ok - Conventional VS FHA Lending Credit Rescoring - Debt Collection Process - EscrowFair Debt Buying Practices ActFamily Leave Discrimination - Fannie/FHA Limits - FHA 2nd HomesFHA Flips - FICO MythsFiling Game Amended Tax ReturnFree Form and Docs - Fraud WatchFunding Steps - Getting The Highest Appraised Value - Gifting A Home Gift Fund Transfers"Good Neighbor" FHA Financing - Hard Money - Home Buyers Do's & Dont's -  Home InspectionHomePath Loans HUD Project Approvals  - Intra Family Mortgages - Lender Owned HomesLending Law.com - Life After BK Loan Mod News - Marketing To Loan Re-Sets  - MFG Homes My Bi-Weekly Mortgage Owning Vs. Renting - PMI Expires 2014 - Pre-Foreclosures -FHA "Back to Work" is DOA - Raising Credit Scores - Realtor Marketing to Loan Resets Renter Marketing - Reverse Mortgages 2014 - Sales ToolsSeller Carrybacks RegsStudent LoansSurviving an IRS Audit - Surviving Spouses - Tax Payer AdvocateThe New Qualified Mortgage RulesUpfront PMI -  USDA loans - Why Loans Don't Close - 2014 FHA/Fannie Loan Limits

Real Estate Websites by Advanced Access © 1998-2014