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Asset Depletion Loans in Bakersfield
Bakersfield homebuyers with substantial assets but non-traditional income can access financing through asset depletion loans. These programs work well for retirees, investors, and high-net-worth individuals in Kern County's diverse real estate market.
Rather than verifying employment or tax returns, lenders calculate qualifying income from your liquid assets. Your bank accounts, investment portfolios, and retirement funds become the foundation for loan approval.
This approach opens doors for buyers who might not qualify through conventional channels despite having significant financial resources. It's particularly relevant in Bakersfield's market where buyers include agricultural investors and energy sector professionals with variable income.
Lenders typically require $500,000 to $1 million or more in liquid assets to qualify. These assets must be in accounts you can access, such as savings, checking, stocks, bonds, and certain retirement accounts.
Your qualifying income gets calculated by dividing total assets by a set period, usually 360 months. If you have $1 million in assets, lenders might count $2,778 monthly toward qualifying income.
Credit scores generally need to reach 680 or higher, with down payments starting at 20-30%. Some programs accept lower scores with larger down payments or more assets.
Asset depletion loans fall under non-qualified mortgage programs, meaning fewer lenders offer them compared to conventional loans. Specialized portfolio lenders and private institutions dominate this space.
Each lender sets their own asset calculation method and qualification standards. Some count 100% of liquid assets while others use 70-80%. Retirement accounts might be valued at 60-70% due to early withdrawal penalties.
Working with a mortgage broker provides access to multiple non-QM lenders simultaneously. This comparison shopping helps you find the most favorable terms and asset calculation methods for your situation.
Document every asset account thoroughly before applying. Lenders need two to three months of statements showing consistent balances. Large deposits require explanation letters to prove the funds aren't borrowed.
Timing matters with asset accounts. Don't move money between accounts during the application process without informing your loan officer. Unexplained transfers can delay closing or trigger additional documentation requests.
Consider which assets to include in your calculation. Using taxable accounts instead of retirement funds avoids questions about early withdrawal penalties. Some borrowers mix account types to maximize qualifying income while preserving their preferred investment strategy.
Bank statement loans might work better if you have business income to document through deposits. Those programs typically need 12-24 months of statements and can offer lower rates than asset depletion.
DSCR loans make sense for investment properties where rental income covers the mortgage. You avoid personal income verification entirely, and properties qualify based on their own cash flow.
Foreign national loans serve non-U.S. citizens without domestic credit or income documentation. Asset depletion programs generally offer better rates when you qualify for both since they indicate stronger financial stability.
Bakersfield's agricultural economy creates seasonal income patterns that complicate traditional financing. Farmers and ag business owners with strong balance sheets but irregular cash flow often benefit from asset-based qualification.
The energy sector in Kern County includes contractors and consultants with high earnings but 1099 income. Asset depletion loans provide an alternative to extensive tax return analysis when substantial savings exist.
Property values in Bakersfield remain accessible compared to coastal California markets. This means the same asset base can qualify buyers for more square footage or better locations than in higher-cost areas.
Checking and savings accounts, stocks, bonds, mutual funds, and accessible retirement accounts typically count. Lenders value each asset type differently, with liquid accounts receiving full credit and retirement funds at 60-70% of balance.
Yes, though some lenders limit asset depletion to primary residences. Investment property programs may require larger asset balances or higher down payments than owner-occupied purchases.
Rates typically run 0.5-2% higher than conventional mortgages. Rates vary by borrower profile and market conditions, with stronger credit scores and larger down payments securing better pricing.
Expect to provide 2-3 months of statements for all asset accounts, proof of funds for down payment, credit authorization, and identification. Tax returns aren't required but some lenders request them for verification purposes.
Asset depletion loans typically close in 30-45 days, similar to conventional mortgages. The timeline depends on how quickly you provide complete asset documentation and whether any questions arise about fund sources.
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.