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Modesto attracts retirees and entrepreneurs who hold wealth in stocks, bonds, and savings rather than paychecks. Asset depletion loans let you qualify based on those liquid holdings.
This loan structure divides your assets by 360 months to create a monthly income figure lenders use for qualification. You skip tax returns and employment letters entirely.
Asset Depletion Loans in Modesto
You need significant liquid assets — typically $500,000 minimum across retirement accounts, brokerage statements, or savings. Credit scores usually start at 680.
Lenders document assets through recent statements, not income tax returns. Down payments range from 20-30% depending on property type and credit profile.
Local decision guide
Use this guide to connect asset depletion loans eligibility, lender expectations, and local market factors before comparing payment options in Modesto.
Modesto attracts retirees and entrepreneurs who hold wealth in stocks, bonds, and savings rather than paychecks. Asset depletion loans let you qualify based on those liquid holdings.
This loan structure divides your assets by 360 months to create a monthly income figure lenders use for qualification. You skip tax returns and employment letters entirely.
You need significant liquid assets — typically $500,000 minimum across retirement accounts, brokerage statements, or savings. Credit scores usually start at 680.
Asset depletion sits in the non-QM space where wholesale lenders set their own asset calculation rules. Some count 70% of retirement accounts, others use 100% of liquid holdings.
Rate premiums run 1-2% above conventional loans due to non-QM status. Rates vary by borrower profile and market conditions. Shopping across lenders matters more here than with agency loans.
Most Modesto buyers using asset depletion fall into two buckets: retirees with IRAs and real estate investors parking cash between deals. Both groups have money but lack traditional income documentation.
The 360-month formula works best when you hold assets well above the loan amount. If you're borderline on assets, bank statement loans or DSCR might pencil better.
Bank statement loans use business deposits to prove income. Asset depletion ignores cash flow entirely and looks only at holdings. If you're business income fluctuates, asset depletion removes that volatility.
DSCR loans work for rental properties using property income. Asset depletion handles primary residences and second homes where rental income doesn't exist.
Modesto's housing stock includes everything from downtown condos to county acreage. Asset depletion works across property types, though rural parcels may need specialized lenders.
Stanislaus County sees steady investor activity in single-family rentals. If you're buying a rental, compare asset depletion against DSCR — rental income often qualifies you better than asset division.
Stocks, bonds, mutual funds, and cash savings qualify. Most lenders include 60-100% of retirement accounts like IRAs and 401(k)s depending on their guidelines.
Yes, though DSCR loans often work better for rentals since they use property income. Asset depletion makes more sense for primary or second homes.
Most programs require $500,000 minimum. The higher your assets relative to the loan amount, the stronger your qualifying income becomes under the 360-month formula.
No. Lenders verify ownership through statements but don't require you to sell holdings. You keep your portfolio intact after closing.
Expect 680 minimum for most lenders. Higher scores in the 720+ range unlock better rates and lower down payment requirements.