Asset-Based Income & Asset Depletion Loans in San Luis Obispo County
Turn savings and investments into qualifying income.
Free review · No hard credit check · 40+ lenders
What is an asset-based income loan?
An asset-based income loan — often called asset depletion — converts eligible savings, investments, and retirement accounts into a monthly qualifying income instead of relying on wages. The lender divides your net eligible assets over a set number of months, commonly 180, to calculate how much income the money can be expected to support.
At a glance
- Income source
- Eligible liquid and retirement assets
- Common calculation
- Net asset value ÷ 180 months
- Typical down payment
- 20–25% (varies by program)
- Best suited for
- Retirees, business owners, high-net-worth buyers
- Loan types
- Conventional asset income, non-QM, jumbo
- Typical timeline
- 3–6 weeks to close
Who Asset-Based Income Loans Are Best For
If any of these describe you, this is worth a fifteen-minute conversation before you assume you can't qualify.
How Asset-Based Income Loans Work in Practice
- 1
We inventory eligible assets
Checking and savings, brokerage accounts, retirement accounts, and sometimes home equity can count. Each program has its own eligible list and its own haircuts — retirement accounts are commonly discounted to 60–70% to account for taxes and penalties.
- 2
We calculate qualifying income
Net eligible assets are divided over an amortization period — 180 months on many programs — and that figure becomes monthly qualifying income. Some programs let you use a portion of assets rather than the full balance, and some allow declining-asset structures.
- 3
We blend it with other income
Asset-derived income can stand alone or combine with Social Security, pension, rental income, or part-time wages. Blending is often what gets a file comfortably over the debt-to-income threshold.
- 4
We document and package the file
Recent statements, retirement account terms, and proof of liquidation access are required. We prepare the asset summary the underwriter needs so your file doesn't stall on 'insufficient income documentation.'
San Luis Obispo County scenarios this solves
Retiree buying near family in SLO County
A retiree with $1.8 million in retirement accounts and $35,000 of Social Security can qualify well beyond what Social Security alone supports by adding asset-derived income.
Business owner with retained cash
An owner who keeps working capital inside the business can, under certain programs, use documented liquid assets toward qualifying without taking a larger salary and a bigger tax hit.
Second home or investment purchase
Buyers whose income is concentrated in investments can finance a coastal second home or a Paso Robles rental using asset-based qualification.
Debt-to-income rescue
When strong credit, big reserves, and a large down payment still aren't enough because of DTI, adding asset income often solves the problem without changing the property or price.
Requirements at a Glance
| Requirement | Typical Standard |
|---|---|
| Eligible assets | Checking, savings, CDs, brokerage, retirement accounts, some trusts |
| Documentation | 2–3 months of statements for every account used |
| Retirement account treatment | Typically 60–70% of vested balance counted |
| Minimum credit score | 680+ typical; jumbo programs often higher |
| Down payment | 20–25%, program dependent |
| Reserves | Often 6–12 months of housing payments after closing |
Ranges shown are typical, not guarantees. Every file is evaluated on its own merits and program guidelines change.
Advantages and trade-offs
Advantages
- Qualifies borrowers whose income never appears on a tax return
- No requirement to actually liquidate investments to close
- Works for purchase, refinance, second homes, and investment property
- Can be combined with Social Security, pension, or rental income
Trade-offs
- Large asset balances are required — small portfolios won't move the needle
- Underwriting reviews every account and every transfer carefully
- Pricing is typically above conventional loans
Asset-based income FAQs
Most programs take the net eligible asset value, subtract required reserves and any borrowed funds, apply a haircut to retirement accounts, and divide the result by a set number of months — commonly 180. A $1,000,000 net balance divided by 180 equals roughly $5,555 per month of qualifying income. Program rules vary, so the exact figure depends on the lender.
Checking and savings accounts, money market funds, CDs, brokerage accounts, and retirement accounts are the most common. Retirement funds are usually counted at 60–70% of the vested balance. Business accounts, private holdings, crypto, and some trust assets are far more restrictive and vary lender by lender.
Usually not. Most programs require access to the funds and documentation of the balance, not liquidation. A few require a specific withdrawal schedule or evidence the account allows regular distributions — we confirm the requirement for the specific lender before you commit.
Yes, and it is often the best structure. Asset-derived income is added to documented fixed income, pension, wages, or rental income. Blending usually produces a more comfortable debt-to-income ratio and can improve pricing relative to an asset-only file.
Freddie Mac expanded how eligible assets may be treated as qualifying income for certain loan purposes, which opened a conventional path for some borrowers who previously needed a non-QM loan. Program details, eligible asset types, and calculation methods still matter — we determine whether a conventional asset-income path or a non-QM asset depletion program fits your file better.
On some portfolio programs, yes. The asset depletion calculation can include cash-out proceeds from a refinance on a case-by-case basis, which can serve as an alternative to a reverse mortgage. Some programs also count eligible stocks, mutual funds, and vested stock options at full value, don't require pledged assets or a depository relationship, and can combine asset income with other income. Terms vary by lender.
Yes. Several jumbo investors offer asset depletion, which matters in coastal and wine country markets where loan amounts exceed the conforming limit. Jumbo versions typically require higher credit scores, larger down payments, and more substantial reserves.
Who you're working with
Justin Stearns is an independent mortgage broker in San Luis Obispo, licensed in California and Colorado, with access to 40+ lenders. Conventional, FHA, VA, and jumbo loans are the core of the practice — creative products are the tools we reach for when the standard answer doesn't fit.
NMLS #258870 · JHS Lending Services, Inc. NMLS #1678642
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Educational information only, not a commitment to lend or a guarantee of financing. Program guidelines, rates, and eligibility vary by lender and are subject to change. All loans subject to credit approval, appraisal, and underwriting.