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Hercules attracts retirees and self-funded entrepreneurs who don't fit W-2 income boxes. Asset depletion loans turn investment portfolios into qualifying income.
This program works well in Contra Costa's competitive market where buyers have wealth but unconventional income. Your liquid assets become your income source for approval.
Asset Depletion Loans in Hercules
Lenders divide total liquid assets by 360 months to create a monthly income figure. You'll need $500K+ in assets for most Hercules purchases.
Credit scores start at 620, though 680+ gets better rates. Expect 20-30% down and reserves covering 6-12 months of payments.
Only non-QM lenders offer asset depletion programs. Most portfolio lenders count 70-80% of asset value when calculating monthly income.
Each lender treats retirement accounts differently. Some exclude penalties, others factor them in. We shop lenders who maximize your asset calculation.
This loan makes sense when you have seven-figure portfolios but minimal reported income. I've closed deals for tech retirees at 45 and trust fund buyers.
Don't liquidate investments to show income. Asset depletion preserves your portfolio while getting you approved. Rates run higher but the math usually works.
Bank statement loans work better if you have business income to show. Asset depletion beats them when you're truly retired or living off investments.
Foreign national loans require different documentation but share similar rate premiums. DSCR loans only work for investment properties, not Hercules primary homes.
Hercules homes near the waterfront attract buyers with investment income rather than traditional employment. Asset depletion fits this buyer profile.
Contra Costa's property tax assessment matters more with asset depletion since debt ratios use calculated income. Higher taxes mean you need more assets to qualify.
Stocks, bonds, mutual funds, money market accounts, and sometimes retirement accounts like 401(k)s and IRAs. Real estate equity doesn't count.
For a $800K purchase with 25% down, you'd need roughly $1.5-2M in verified liquid assets after down payment and reserves.
Yes, lenders calculate income from retirement accounts without requiring withdrawals. Some factor in early withdrawal penalties, others don't.
Expect 1.5-2.5% higher than conventional rates. Asset depletion compensates with no income documentation hassles.
No, that's the advantage. Lenders verify assets exist but don't require liquidation. Your portfolio stays invested.
Asset verification adds 2-3 weeks compared to conventional loans. Most closings complete in 30-45 days with complete documentation.