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Asset Depletion Loans in Sacramento
Sacramento attracts retirees, business owners, and investors who hold substantial assets but lack traditional W-2 income. Asset depletion loans let qualified borrowers use savings, retirement accounts, and investment portfolios as proof of repayment ability.
This non-QM financing option serves the capital city's diverse population. Many Sacramento residents maintain significant liquid assets while transitioning between careers, managing businesses, or living on investment income.
Asset depletion mortgages calculate qualifying income by dividing total liquid assets by a set number of months. Lenders typically use 60-360 months depending on the loan program and borrower profile.
Borrowers typically need minimum liquid assets ranging from $500,000 to $1 million depending on the property price. Credit scores usually start at 660, though some programs accept scores as low as 620 with compensating factors.
Eligible assets include checking and savings accounts, stocks, bonds, mutual funds, and retirement accounts like IRAs and 401(k)s. Real estate equity and business assets typically don't count toward the calculation.
Down payment requirements range from 20-30% for most programs. Lenders may require reserves equal to 6-12 months of housing payments after closing.
Asset depletion loans come from specialized non-QM lenders rather than conventional mortgage banks. These lenders maintain flexible underwriting guidelines that focus on asset strength rather than employment history.
Portfolio lenders and private institutions dominate this space in Sacramento. They price loans based on asset levels, credit profile, and property type rather than standard automated underwriting.
Working with an experienced broker provides access to multiple asset depletion programs. Different lenders offer varying depletion formulas, which can significantly impact your qualifying income amount.
The depletion calculation makes a huge difference in qualifying power. A lender using 84 months versus 120 months creates vastly different income calculations from the same asset base. Smart borrowers compare multiple options before committing.
Timing matters with asset statements. Most lenders average the most recent two quarterly statements. Market volatility can impact your qualifying position, so plan application timing around statement dates.
Consider which assets to include carefully. While you might have $2 million in assets, using only what's needed to qualify preserves liquidity for other opportunities. Over-documenting assets doesn't improve your position.
Bank statement loans suit business owners with steady revenue but complex tax returns. Asset depletion works better for those with significant savings but minimal monthly income flow.
Foreign national loans require different documentation and typically higher down payments. Asset depletion borrowers who are US citizens or permanent residents often get better rates and terms.
DSCR loans focus on rental property cash flow rather than borrower assets. Investors purchasing income property might compare both options to see which provides better leverage for their situation.
Sacramento's role as California's capital creates a population with diverse income sources. State retirees with pension assets, relocated executives, and real estate investors all find asset depletion financing relevant.
The city's lower cost of living compared to Bay Area markets makes asset depletion loans more accessible. A borrower with $750,000 in assets can qualify for larger homes here than in San Francisco or San Jose.
Property types matter in Sacramento's varied housing stock. Lenders may apply different depletion periods or down payment requirements for condos versus single-family homes in established neighborhoods.
Checking, savings, stocks, bonds, mutual funds, and retirement accounts like IRAs and 401(k)s typically qualify. Real estate equity and business assets usually don't count. Each lender maintains specific asset eligibility guidelines.
Lenders divide your total eligible liquid assets by a set number of months, typically 60-360 months. For example, $1 million divided by 120 months equals $8,333 monthly qualifying income.
Yes, lenders count retirement account balances for qualification purposes. You don't actually withdraw the funds or incur penalties. The accounts simply prove your ability to make mortgage payments.
Most programs require 660 minimum, though some lenders accept 620 with larger down payments or higher asset levels. Better credit scores typically secure better interest rates and terms.
Expect 30-45 days from application to closing. The timeline depends on asset documentation complexity and property appraisal. Having recent statements ready accelerates the process significantly.
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.