Loading
Asset Depletion Loans in Selma
Selma has a growing number of retirees and self-employed farmers who own substantial assets but show minimal taxable income. Traditional loans reject these borrowers despite seven-figure portfolios.
Asset depletion converts liquid assets into qualifying income by dividing your account balances over the loan term. A borrower with $800,000 in investments can qualify based on roughly $26,667 monthly income on a 30-year loan.
You need substantial liquid assets in verified accounts: stocks, bonds, retirement accounts, or cash. Most lenders require minimum credit scores around 640-660 and down payments starting at 20%.
The math is straightforward: divide your total liquid assets by the loan term in months. Lenders typically discount retirement accounts by 30-40% to account for early withdrawal penalties and taxes.
Asset depletion sits in the non-QM space where lenders set their own rules. Some accept IRAs and 401(k)s at 60% value while others won't touch retirement accounts at all.
Rate premiums run 1-2% above conventional loans. Portfolio lenders often offer better terms than aggregators because they hold the loan and understand asset-based lending.
Most Selma borrowers exploring asset depletion also qualify for bank statement loans if they have business accounts. We run both scenarios because bank statement programs sometimes deliver better rates.
The sweet spot is borrowers with $500,000-$3,000,000 in liquid assets buying primary residences under $750,000. Above that range, the income calculation usually works without asset depletion.
Bank statement loans work better if you have consistent business deposits over 12-24 months. Asset depletion wins when your income fluctuates wildly or you're fully retired.
Foreign national loans require similar down payments but don't care about credit history. DSCR loans ignore all income if you're buying rental property and the rent covers the payment.
Selma's agricultural economy means many borrowers own farmland worth millions but take minimal salaries to reduce tax liability. Asset depletion is often the only loan that works for this profile.
Home prices in Selma run below state averages, so asset depletion works on smaller portfolios here than in coastal cities. A $400,000 home needs far less asset documentation than a $1,200,000 property.
Checking, savings, stocks, bonds, mutual funds, and retirement accounts like IRAs and 401(k)s. Real estate equity and business ownership don't count as liquid assets.
Yes, lenders calculate income based on your account balance divided by loan term. You don't actually withdraw funds, but lenders discount the balance 30-40% for potential penalties.
With 20% down, you'd borrow $280,000. At 30-year term, you need roughly $840,000 in assets to create $2,800 monthly qualifying income assuming typical debt ratios.
Some lenders allow it but DSCR loans make more sense for rentals. Asset depletion works best for primary residences and second homes in Selma.
Business accounts typically don't qualify for asset depletion. You'd need to move funds to personal accounts 60-90 days before application or use a bank statement loan instead.
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.