How Asset Depletion Loans Open the Door to Investment property ownership
You might have the money, but not the monthly paycheck. If you’re a retiree, entrepreneur, or someone living off investments, an asset depletion loan might be the key that unlocks the door to the investment property you want. Here’s how this unique type of loan works and why it’s growing in popularity.
What Is an Asset Depletion Loan and Who Is It For?
An asset depletion loan is a mortgage option designed for people who don’t earn a traditional income but have significant assets. Instead of asking for W-2s or pay stubs, lenders qualify the borrower based on liquid assets.
Let’s say you’re retired and living off your savings, or you’re self-employed and reinvest your profits instead of taking a steady salary. Maybe your wealth is tied up in stocks, mutual funds, or retirement accounts. Traditional lenders might see you as a risk, even though you have more than enough to afford the home. That’s where asset depletion loans come in.
How Do These Loans Work?
Lenders look at your assets, not your income. Eligible assets often include cash in checking or savings accounts, brokerage accounts with stocks or bonds, retirement accounts if you meet age requirements, and even certificates of deposit. They total the eligible funds, then divide by a set number of months to come up with a monthly figure that acts like income.
This approach works especially well for:
Retirees with large retirement or investment portfolios
High-net-worth individuals who don’t draw steady income
Business owners who reinvest profits rather than take salaries
The Benefits Are Clear
You don’t need to prove employment
You can qualify based on your real financial situation
You keep your assets intact while gaining loan approval
But There Are a Few Things to Keep in Mind
You need to show substantial assets
Rates might be a bit higher than a conventional loan
Every lender does things a little differently
If you’ve worked hard to build your wealth and want that money to work for you, this type of mortgage might be the missing piece in your investment property journey.
About the Author
Jake Yuskaitis is a former US Marine and the Co-founder of Frontier Funding.
Jake Yuskaitis, a former US Marine Corps Infantryman, transitioned into the financial services industry as a loan officer, where he quickly rose to lead a team of professionals. His top priority has always been to serve borrowers with dedication, prioritizing their needs and delivering exceptional, client-focused service.
About Frontier Funding
Founded by two seasoned professionals with extensive experience in real estate financing, Frontier Funding understands the unique challenges and opportunities in the private money lending space. We have built a culture that reflects our core values in all our services.
At Frontier Funding, our mission is to provide real estate investors with a reliable solution for all their lending needs. With a wide range of funding options, we ensure that every loan is met with the right solution—giving investors the confidence to count on us.