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Asset Depletion Loans in San Diego
San Diego's real estate market attracts retirees, investors, and high-net-worth individuals who may not show traditional W-2 income. Asset depletion loans let you qualify based on your savings, investments, and retirement accounts rather than employment income.
This loan type works well for San Diego buyers who've built substantial wealth through stock portfolios, retirement savings, or business sales. Your assets become your qualifying income, making homeownership accessible without traditional pay stubs.
The coastal lifestyle in San Diego draws many buyers with significant liquid assets but irregular or non-traditional income streams. Asset depletion programs bridge the gap between wealth and traditional mortgage qualification requirements.
Lenders calculate your qualifying income by dividing your total liquid assets by a set number of months, typically 240 to 360 months. For example, $1 million in assets divided by 240 months equals $4,167 monthly qualifying income.
You'll need substantial verifiable assets in checking, savings, investment accounts, stocks, bonds, or retirement funds. Most programs require minimum asset levels of $500,000 to $1 million, though requirements vary by lender and loan amount.
Credit scores typically need to be 680 or higher, with some lenders requiring 700+. Down payments usually start at 20% but may go higher depending on property type and loan amount. Rates vary by borrower profile and market conditions.
Asset depletion loans fall under non-QM lending, meaning fewer lenders offer them compared to conventional programs. Not all San Diego lenders have access to these specialty products, making broker relationships valuable.
Each lender calculates asset depletion differently, with varying formulas for converting assets to income. Some count 100% of liquid assets while others discount retirement accounts or apply different divisor months based on borrower age.
Portfolio lenders and specialty finance companies dominate this space. Working with a broker who maintains relationships with multiple non-QM lenders helps you find competitive terms and the calculation method most favorable to your situation.
The biggest mistake we see is buyers assuming all assets count equally. Retirement accounts often receive discounts or different treatment than liquid savings. Knowing which lender's formula works best for your specific asset mix can save thousands.
Documentation requirements exceed traditional mortgages. Expect to provide several months of statements for every account used for qualification. Organization upfront speeds the process significantly and prevents delays at closing.
Strategic asset positioning before applying can improve your qualification. Moving funds between accounts or consolidating scattered investments into verifiable forms makes underwriting smoother and can enhance your borrowing power.
Bank statement loans offer an alternative for borrowers with business income who can show deposits rather than just assets. If you have ongoing business revenue, bank statements might provide stronger qualification than asset depletion alone.
DSCR loans work better for pure investment properties since they qualify based on rental income potential rather than personal assets or income. Asset depletion suits primary residences or second homes where rental income isn't the focus.
For foreign nationals, specialized programs exist that may combine asset verification with international income documentation. Asset depletion provides a cleaner path when international income verification proves difficult or unnecessary.
San Diego's higher property values often align well with asset depletion borrowers. Buyers with $2-4 million in assets can comfortably qualify for homes in neighborhoods like La Jolla, Coronado, or Del Mar using these programs.
The region's military retirees and corporate executives frequently hold substantial retirement accounts but lack traditional employment. Asset depletion lets them leverage pension funds, 401(k)s, and investment portfolios for home purchases.
California's documentation requirements and escrow processes are familiar to non-QM lenders serving the San Diego market. However, property types matter—condos in high-rises may face additional scrutiny compared to single-family homes.
Checking and savings accounts, stocks, bonds, mutual funds, and retirement accounts like 401(k)s and IRAs typically qualify. Real estate equity and non-liquid assets generally don't count toward qualification calculations.
Most programs require $500,000 to $1 million minimum in verifiable liquid assets, though requirements vary by lender and property price. Higher-priced San Diego homes may require proportionally larger asset reserves.
Yes, you can use 401(k), IRA, and other retirement accounts regardless of age or employment status. Some lenders apply different calculation methods or discounts based on account type and accessibility.
Rates typically run 0.5% to 2% higher than conventional mortgages due to the non-QM nature of the program. Rates vary by borrower profile and market conditions, with stronger credit and larger down payments securing better terms.
You'll need 2-3 months of statements for all accounts used for qualification, plus documentation showing fund sources if large deposits appear. Credit reports, identification, and standard purchase documents are also required.
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.