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Asset Depletion Loans in Corcoran
Corcoran sits in California's agricultural heartland, where income doesn't always arrive via traditional paychecks. Retirees, landowners with lease income, and business owners with significant assets often struggle with conventional loan requirements despite having real wealth.
Asset depletion loans ignore your employment history entirely. Lenders divide your liquid assets by 360 months to create a monthly income figure for qualification purposes. A borrower with $500,000 in accounts shows $1,389 monthly income under this formula.
This loan type works particularly well in Kings County, where property values remain below coastal markets but conventional underwriting still demands traditional income documentation. Many qualified buyers here have assets but irregular cash flow.
You need 620+ credit and significant liquid assets. Most lenders require $200,000 minimum in verifiable accounts after down payment and reserves. That means if you're putting 20% down on a $300,000 property, you need $60,000 down plus $200,000 in remaining assets to qualify.
Acceptable assets include checking, savings, money market accounts, stocks, bonds, and retirement accounts. Real estate equity doesn't count. Neither does the value of your business or equipment. Only liquid or near-liquid assets work for this calculation.
Expect 20-25% down payments. Lenders want borrowers with real skin in the game when income isn't traditionally documented. Six months of reserves is standard, though some programs require twelve months for higher loan amounts.
Asset depletion isn't offered by conventional banks. This is non-QM territory, meaning wholesale lenders that specialize in alternative documentation. SRK CAPITAL accesses 200+ wholesale lenders, maybe twenty of which actively underwrite asset depletion programs.
Rate spreads vary wildly between lenders. I've seen quotes on identical scenarios differ by 1.5% because some lenders view asset depletion as higher risk while others price it aggressively to win market share. Shopping multiple lenders matters significantly here.
Underwriting timelines run 30-45 days typically. Asset verification takes longer than employment verification because statements need detailed review. Factor this into your purchase timeline, especially in competitive situations.
Most borrowers don't realize they can combine asset types. I recently closed a deal where the borrower used retirement accounts, a brokerage account, and savings to hit the asset threshold. The diversification actually strengthened the application.
Timing matters with account balances. Lenders average two months of statements, so a single large deposit from selling a car won't help if it doesn't appear across both months. I tell clients to consolidate assets at least 60 days before applying.
The biggest mistake is counting illiquid assets. I've seen applicants include whole life insurance cash value or business equipment on their asset list. Underwriters reject these immediately. Stick to accounts you could liquidate within 30 days if needed.
Bank statement loans compete directly with asset depletion in Corcoran. If you have business income but significant fluctuation, bank statements might price better. Asset depletion works better for retirees or those living off investments without active business income.
DSCR loans make sense if you're buying rental property and the rent covers the mortgage. Asset depletion applies to primary residences and second homes where rental income isn't part of the equation. Different tools for different situations.
Foreign national loans allow non-U.S. citizens to buy property here, often using asset depletion as the income calculation method. If you're a foreign buyer with substantial liquid assets, you might qualify under both programs simultaneously.
Corcoran's housing market moves slower than coastal California, which actually helps asset depletion borrowers. The 30-45 day underwriting timeline doesn't kill deals here like it would in competitive Bay Area markets. Sellers expect reasonable closing periods.
Kings County's agricultural economy creates many potential asset depletion candidates. Farmers who sold land, retirees from California's prison system headquartered here, and business owners who structured their income to minimize taxes all fit the profile.
Property values in Corcoran remain accessible compared to California averages. The asset threshold of $200,000+ after down payment aligns better with local pricing than it would in San Francisco or San Diego, where down payments alone exceed that amount.
Nothing. The assets stay in your accounts. Lenders only use the balance to calculate qualifying income—you never actually liquidate them.
Yes, if your spouse is on the loan. All borrowers' liquid assets combine for the qualification calculation.
Large deposits need sourcing within 60 days of application. Established account balances older than that don't require origin documentation.
Rates vary by borrower profile and market conditions. Asset depletion typically prices 1-2% above conventional rates due to non-QM structure.
Yes. Asset depletion works for both purchases and rate-term refinances. Cash-out refinances have stricter requirements.
They count 70% of the balance to account for early withdrawal penalties. After 59.5, they count 100% of accessible funds.
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.