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Asset Depletion Loans in Richmond
Richmond homebuyers with substantial savings or investment portfolios often face challenges qualifying for traditional mortgages despite having significant wealth. Asset depletion loans solve this problem by treating your liquid assets as qualifying income.
This loan program particularly benefits retirees, entrepreneurs, and investors in Richmond who maintain substantial portfolios but lack conventional W-2 income. Your assets become your income documentation.
Lenders typically divide your total liquid assets by 360 months to calculate qualifying income. For example, $1 million in verified assets translates to roughly $2,778 monthly qualifying income.
Eligible assets include bank accounts, stocks, bonds, mutual funds, and retirement accounts like 401(k)s or IRAs. Most programs require minimum asset balances between $500,000 and $1 million, though requirements vary by lender.
Credit scores generally need to exceed 680, with higher scores securing better terms. Down payments typically start at 20%, though some programs accept 15% for well-qualified borrowers.
Asset depletion loans fall under non-qualified mortgage programs, meaning fewer lenders offer them compared to conventional options. Working with specialized brokers who understand these products proves essential in Richmond.
Different lenders calculate qualifying income differently. Some use 60-month depletion schedules while others use 360 months, dramatically affecting how much you qualify for with the same asset base.
Portfolio lenders and non-QM specialists dominate this space. These lenders keep loans in-house rather than selling to Fannie Mae or Freddie Mac, allowing more flexible underwriting.
Richmond buyers should prepare detailed asset documentation before starting the application. Bank statements, brokerage statements, and retirement account balances from the past two months streamline the process.
Consider timing carefully if markets fluctuate. Lenders use recent account values, so significant portfolio drops during underwriting can affect qualification. Asset verification happens close to closing.
Many Richmond buyers combine asset depletion with other strategies. Using partial asset depletion alongside other income sources can maximize your purchasing power while preserving liquidity.
Bank statement loans work better for self-employed borrowers with business income, while asset depletion suits those with minimal income but substantial savings. The right choice depends on your financial profile.
DSCR loans serve Richmond investors focused on rental properties, qualifying based on property cash flow. Asset depletion loans work for any property type, including primary residences.
Rates vary by borrower profile and market conditions. Asset depletion loans typically carry higher rates than conventional mortgages but lower rates than other non-QM options due to the asset cushion.
Richmond's diverse housing stock accommodates buyers at various price points. Asset depletion loans work equally well for condos near the Marina Bay waterfront or single-family homes in the Hilltop neighborhood.
Contra Costa County property taxes and homeowners association fees factor into debt-to-income calculations even with asset depletion programs. Higher reserve requirements may apply for properties requiring significant maintenance.
Richmond's proximity to San Francisco and Oakland attracts relocating professionals and retirees with substantial portfolios. This loan program serves both primary residence buyers and those purchasing second homes in the area.
Yes. Lenders count retirement account balances for qualification purposes without requiring actual withdrawals. The assets remain in your accounts while generating qualifying income for the mortgage application.
Lenders verify assets close to closing. Significant portfolio decreases may reduce your qualifying amount. Consider this when markets fluctuate and discuss timing strategies with your broker.
Not necessarily. You can use different asset accounts for qualification versus down payment. However, lenders subtract down payment amounts from total assets when calculating qualifying income.
Rates vary by borrower profile and market conditions. Asset depletion loans typically price 1-3% higher than conventional mortgages but offer approval when traditional programs cannot accommodate your income documentation.
Many lenders combine asset depletion with foreign national programs. This works well for international buyers with substantial liquid assets purchasing Richmond properties without U.S. credit or income history.
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.