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Asset Depletion Loans in Tehachapi
Tehachapi attracts retirees, entrepreneurs, and investors seeking mountain living and lower costs than coastal California. Many of these buyers have substantial assets but non-traditional income patterns that don't fit conventional mortgage boxes.
Asset depletion loans serve this exact profile. They allow you to qualify based on your liquid assets—savings, retirement accounts, investment portfolios—rather than W-2 income. This makes homeownership accessible to those with wealth but variable income streams.
The program particularly benefits Tehachapi's growing retiree community and self-employed professionals who maintain significant savings but lack traditional pay stubs.
Lenders calculate your qualifying income by dividing your total liquid assets by a fixed term, typically 360 months. For example, $1 million in assets divided by 360 equals roughly $2,778 monthly qualifying income.
Most programs require minimum assets between $500,000 and $1 million after down payment and reserves. You'll need acceptable credit, typically 680 or higher, and must document the source of your assets to satisfy anti-money laundering requirements.
Down payment requirements usually start at 20% for primary residences and 25-30% for investment properties. The property becomes the collateral, but your asset base provides the income qualification pathway.
Asset depletion loans fall under Non-QM lending, meaning they're portfolio products from specialized lenders rather than government-backed programs. Not all lenders offer these programs, and those that do maintain different asset requirements and rate structures.
Rates typically run 1-3% higher than conventional mortgages due to the non-traditional qualification method. However, for borrowers with significant assets, this cost often makes sense compared to liquidating investments that may be generating returns.
Working with a broker who specializes in Non-QM lending provides access to multiple lenders and helps match your specific asset profile to the most favorable program terms.
The key to securing favorable asset depletion terms is clean asset documentation. Lenders want to see seasoned funds—typically 60-90 days of statements showing consistent balances. Sudden large deposits raise questions and slow approvals.
Consider which assets to use strategically. Most programs accept checking, savings, money market accounts, stocks, bonds, and retirement accounts. Real estate equity and illiquid holdings typically don't count. Retirement accounts may be discounted 30-40% since they're not immediately accessible.
Many Tehachapi buyers combine asset depletion with other Non-QM options. For instance, using some asset depletion alongside rental income from investment properties can strengthen your overall borrower profile and potentially improve terms.
Bank statement loans offer another path for non-W-2 borrowers, but they require 12-24 months of business bank statements showing deposits. Asset depletion doesn't need this operational history—just liquid assets in your name.
Foreign national loans serve overseas buyers but typically require larger down payments (30-40%) and have stricter terms. If you're a U.S. citizen or permanent resident with assets, asset depletion usually offers better pricing and terms.
DSCR loans work for investment properties by qualifying on rental income rather than personal income. If you're buying a primary residence in Tehachapi and lack traditional income, asset depletion may be your best option.
Tehachapi's property values remain more affordable than many California markets, meaning your asset base goes further here. A $600,000 portfolio that might struggle to qualify for a coastal property could comfortably support a Tehachapi home purchase.
The area's appeal to retirees and lifestyle buyers aligns perfectly with asset depletion borrower profiles. Many buyers relocating from higher-cost areas arrive with substantial equity from previous sales, making them ideal candidates for this program.
Wind energy employment and the tech industry presence bring high-earning professionals with stock options and investment accounts. These wealth profiles often fit asset depletion better than traditional income verification, especially during career transitions or early retirement.
Most programs accept checking, savings, money market accounts, stocks, bonds, and mutual funds at full value. Retirement accounts like 401(k)s and IRAs typically count but may be discounted 30-40% since they're not immediately liquid.
Most lenders require $500,000 to $1 million in liquid assets after your down payment and reserves. The exact amount depends on the property price and lender requirements. Rates vary by borrower profile and market conditions.
Yes, asset depletion works for investment properties, though you'll need a larger down payment (typically 25-30%) and may face slightly higher rates than for primary residences.
No, you don't liquidate assets for qualification—only for your down payment and closing costs. The lender uses your asset balance to calculate qualifying income mathematically, but the assets remain yours.
Asset depletion rates typically run 1-3 percentage points higher than conventional loans due to the non-traditional qualification method. Exact rates depend on credit score, down payment, and overall borrower strength.
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.