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Asset Depletion Loans in Berkeley
Berkeley attracts professionals with substantial assets: university faculty nearing retirement, tech executives with stock portfolios, and entrepreneurs who reinvest rather than draw salary. Asset depletion loans serve borrowers whose wealth doesn't appear on traditional income documents.
This Non-QM program calculates qualifying income by dividing liquid assets by the loan term. A borrower with $1.2 million in investable accounts applying for a 30-year mortgage creates $40,000 in annual qualifying income ($1.2M ÷ 30 years). Rates vary by borrower profile and market conditions.
Berkeley's educated population often holds wealth in retirement accounts, brokerage portfolios, and stock options. Asset depletion lending recognizes these resources as legitimate qualification tools when paychecks don't tell the complete financial story.
Eligible assets typically include retirement accounts (401k, IRA), stocks, bonds, mutual funds, and cash savings. Most programs require at least $500,000 in verifiable liquid assets after down payment and reserves. Recent account statements document your qualifying funds.
Credit scores generally need to reach 680 or higher, with some programs accepting 660. Lenders calculate monthly income by dividing total assets by the loan term in months. A 30-year loan divides assets by 360; a 15-year loan by 180, creating higher qualifying income.
Down payment requirements range from 20% to 30% depending on property type and credit profile. The assets used for qualification must remain after covering your down payment and 6-12 months of reserves.
Asset depletion loans come exclusively from Non-QM portfolio lenders, not government agencies or conventional programs. These lenders keep loans on their books or sell to private investors, allowing flexibility that Fannie Mae and Freddie Mac cannot offer.
Berkeley borrowers benefit from working with brokers who access multiple Non-QM lenders. Each lender treats retirement accounts differently—some use 100% of IRA balances, others discount by 30% for early withdrawal penalties. Shopping among lenders reveals significantly different qualifying amounts.
Documentation remains straightforward despite the specialized nature. Expect to provide two months of statements for all accounts used in calculations, plus standard credit and property paperwork.
Berkeley's proximity to major employers means many applicants hold company stock with vesting schedules. Lenders typically count only vested shares, so timing your purchase after vesting events can substantially increase qualifying power. A broker understands these nuances.
Retirement account treatment makes dramatic differences. One lender might apply a 30% penalty discount to your $800,000 IRA, creating $560,000 in qualifying assets. Another counts the full amount. This single variable can mean qualifying for $150,000 more in purchase price.
Consider tax implications before liquidating assets for down payments. A broker can model scenarios comparing asset depletion loans against bank statement programs or DSCR loans for investment properties, finding the path that preserves your portfolio.
Bank statement loans suit self-employed borrowers with strong cash flow but asset depletion works better for asset-rich, income-light situations. A Berkeley consultant earning $80,000 annually but holding $1.5 million in investments qualifies for more house through asset depletion.
Foreign national loans require assets too, but serve non-citizens without U.S. credit. DSCR loans evaluate investment properties by rental income. 1099 loans use contractor income documentation. Asset depletion stands alone for W-2 employees whose traditional income doesn't reflect true wealth.
The key comparison point: asset depletion creates qualifying income from wealth you already hold. Other programs require ongoing income streams or business revenue. Choose based on whether your financial strength lives in your accounts or your cash flow.
Berkeley's high property values mean asset depletion borrowers often pursue homes requiring $1 million+ mortgages. A $1.5 million purchase with 25% down needs $1.125 million financed. At minimum qualification ratios, this requires roughly $2 million in assets after your down payment.
University of California retirement accounts create unique opportunities. UC faculty and staff often accumulate substantial retirement savings through UCRP and supplemental plans. These defined benefit and defined contribution accounts qualify when properly documented and calculated.
Berkeley's housing stock includes co-ops, condos, and unique properties. Some Non-QM lenders restrict property types more than others. Brokers familiar with Berkeley's market know which lenders approve Telegraph Hill co-ops or multi-unit properties common near campus.
Yes. Asset depletion loans calculate qualifying income from your account balance without requiring withdrawal. You keep your investments intact while using their value to demonstrate repayment ability.
Only vested equity typically counts toward qualifying assets. Unvested options and restricted stock are excluded. Recent statements showing vested shares plus current market values document these holdings.
Asset depletion rates typically run 1-3 percentage points above conventional mortgages. Rates vary by borrower profile and market conditions. Stronger credit and larger down payments earn better pricing.
No liquidation requirement exists for payments. Lenders verify you have assets to qualify, but you make payments from any income source. Many borrowers use employment or investment income for actual payments.
Absolutely. Asset depletion serves retirees perfectly. Your retirement accounts, investment portfolios, and savings create qualifying income even without paychecks. This program was designed for exactly this scenario.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.