Loading
Industry is 99% industrial and commercial property. Most mortgages here involve business owners with complex financials.
Asset depletion works when you have liquid reserves but irregular income. The loan divides your assets by 360 months to create qualifying income.
This approach fits retirees, real estate investors, and entrepreneurs who keep wealth in portfolios instead of paychecks.
Asset Depletion Loans in Industry
You need $500,000 minimum in liquid assets for most lenders. Credit scores start at 660 but some programs go as low as 620.
Down payments run 20-30% depending on property type and credit profile. Higher reserves improve your rate.
Acceptable assets include checking, savings, stocks, bonds, and retirement accounts. Real estate equity doesn't count.
Only non-QM lenders offer asset depletion. Fannie Mae and FHA don't recognize this income calculation method.
Each lender uses different depletion rates. Some divide by 360 months, others by 240 or even 120 for more aggressive qualifying.
Rates run 1-2% higher than conventional loans. Expect 7-8.5% in current markets versus 6.5-7% for traditional mortgages.
Rates vary by borrower profile and market conditions.
Most borrowers overpay because they use the first lender who says yes. We shop 200+ wholesale lenders to find who offers the best depletion rate for your asset mix.
Some lenders count 70% of stock values, others count 100%. That difference can swing your qualifying income by $50,000.
If you're $100,000 short on qualifying income, moving funds from real estate to liquid accounts 60 days before application can make the deal work.
Bank statement loans work better if you have consistent deposits. Asset depletion makes sense when income fluctuates wildly or doesn't exist.
DSCR loans beat asset depletion for investment properties with strong rent rolls. You qualify on property cash flow instead of depleting personal assets.
1099 loans require at least two years of consistent contract income. Asset depletion has no income history requirement.
Industry has minimal residential inventory. Most buyers here are purchasing second homes or investment properties near their businesses.
Los Angeles County requires larger reserve cushions than other California markets. Lenders want 12-18 months of payments in the bank post-closing.
Property insurance costs impact qualification. Some lenders include full annual premiums in debt ratios, others spread monthly.
Checking, savings, stocks, bonds, mutual funds, and IRA or 401k accounts work. Real estate equity and business assets don't count as liquid reserves.
Yes, but most lenders require higher reserves for primary homes than investment properties. Expect 12-18 months of mortgage payments in the bank after closing.
At 360-month depletion, $1 million creates $2,778 monthly income. Some lenders use 240 months, which generates $4,167 monthly qualifying income.
Most lenders don't require tax returns. They verify assets through 60 days of account statements showing consistent balances.
Minimum scores start at 620, but you'll get better rates at 680+. Higher credit opens more lender options and lower down payments.