Michigan Conventional Asset Depletion Mortgage Center
If you have retired with a healthy 401(k) or IRA but no longer draw a paycheck, you do not have to leave conventional financing behind. Fannie Mae's employment-related assets as qualifying income policy lets a conventional lender convert eligible retirement assets into a monthly income stream, so you qualify with agency pricing, standard conventional terms, and no non-QM rate premium.
Riverbank Finance LLC arranges conventional asset depletion loans across Michigan for purchases and limited cash-out (rate and term) refinances on principal residences and second homes. Your accounts are never spent, liquidated, or pledged; the lender simply documents them and runs the math.
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How does conventional asset depletion work?
The lender starts with your eligible employment-related assets and calculates your net documented assets: 100% of the eligible balance, minus the funds needed for your down payment, closing costs, and required reserves, and minus any penalty that would apply to an early distribution, such as the 10% early withdrawal penalty on a retirement account. There are no flat percentage haircuts by asset type or borrower age.
That net figure is then divided by the exact amortization term of the loan in months. On a 30-year fixed loan, that is 360 months. For example, $1,200,000 in net documented assets on a 30-year loan produces $3,333 per month in qualifying income. A shorter term raises the monthly figure: the same assets on a 15-year loan (180 months) produce about $6,667 per month.
Current employment is not required if the asset income is sufficient, but this is not a no-doc program: the calculated monthly income stream is used in a standard debt-to-income ratio, and the loan underwrites like any other conventional mortgage. That is the trade-off for agency pricing.
For more information on conventional asset depletion loans call us at 800-555-2098 or apply online today!
What assets are eligible?
Eligibility is stricter than non-QM asset programs because the assets must be employment-related. Typical eligible sources include:
- 401(k), IRA, SEP, Keogh, and similar retirement accounts, fully vested and available to the borrower
- Lump-sum retirement or pension distributions
- Proceeds of a severance package, when documented
A few important restrictions apply:
- Checking and savings accounts are generally ineligible, unless you can document that the balance came directly from an eligible employment-related source, such as a severance package or a lump-sum retirement distribution
- Virtual currency, including cryptocurrency, is explicitly not eligible for this calculation
- You do not need to be 59½. Younger borrowers can use retirement assets provided they have the unqualified and unlimited right to request a complete distribution of all funds in the account, with any applicable early withdrawal penalty subtracted from the balance before the income is calculated
There is no flat minimum asset threshold. The assets simply need to be large enough that, after netting out funds to close and penalties and dividing by the loan term in months, the resulting monthly income supports your debt-to-income ratio.
Conventional asset depletion requirements
Guidelines follow Fannie Mae's employment-related assets policy and are subject to change, but the core requirements are:
- Purchase and limited cash-out (rate and term) refinance transactions only; cash-out refinances are not permitted
- Principal residences and second homes only; investment properties are not eligible
- Maximum 70% LTV/CLTV/HCLTV, increased to 80% when the owner of the qualifying asset is at least 62 years old at closing
- Net documented assets divided by the loan's amortization term in months to derive qualifying income
- Standard conventional DTI, credit, and reserve requirements apply
Because this is a conventional loan, everything else about the file looks familiar: conforming loan limits, standard mortgage insurance rules where applicable, and pricing set by the agencies rather than a non-QM investor. For asset-rich retirees who fit inside the LTV and occupancy limits, it is usually the cheapest way to turn a portfolio into a mortgage approval.
The asset owner must be a borrower on the loan, and the assets must be documented with recent account statements. Your loan officer will run the calculation up front so you know your qualifying income before you shop.
Conventional vs. non-QM asset depletion: which fits you?
The conventional program wins on price; the non-QM programs win on flexibility. Conventional divides your net assets by the full loan term (360 months on a 30-year loan), limits you to retirement-sourced assets, caps LTV at 70% to 80%, and runs a standard DTI. Non-QM asset programs divide by just 60 months, accept brokerage accounts, bank balances, and even certain cryptocurrency, and offer an Asset Qualifier option with no income disclosure or DTI at all. If your assets are concentrated in retirement accounts and the conventional income math works, take the agency pricing. If you need more qualifying income from the same balance, or your assets fall outside the conventional rules, our Michigan asset depletion loan page covers the non-QM route. One call to 800-555-2098 and a loan officer can price both side by side.
Apply for a conventional asset depletion loan in Michigan
Start with a call to 800-555-2098. A licensed loan officer will confirm which of your accounts qualify as employment-related assets, run the net documented asset calculation, and tell you whether the conventional program or a non-QM alternative produces the stronger approval.
Prefer to start online? Fill out the quote form above and we will review your information and respond promptly with your options.
What is a conventional asset depletion loan?
It is a conventional mortgage that uses Fannie Mae's employment-related assets as qualifying income policy. Eligible retirement assets are converted into a monthly income stream by dividing the net documented balance by the loan's amortization term in months, and that income qualifies you at standard agency pricing.
How is qualifying income calculated on a conventional asset depletion loan?
The lender takes 100% of your eligible assets, subtracts funds needed for the down payment, closing costs, and required reserves, plus any early distribution penalty, then divides the result by the loan term in months. On a 30-year loan that is 360 months, so $1,200,000 in net documented assets produces $3,333 per month in qualifying income.
Do I still need a debt-to-income ratio?
Yes. Current employment is not required if the asset income is sufficient, but the calculated income stream is used in a standard DTI calculation, and the loan underwrites like any other conventional mortgage.
Can I do a cash-out refinance or buy an investment property with this program?
No. Employment-related assets as qualifying income is limited to purchase and limited cash-out (rate and term) refinance transactions on principal residences and second homes. Cash-out refinances and investment properties are not permitted; a non-QM asset program may fit those goals instead.
Do I have to be 59½ to use retirement accounts?
No. Younger borrowers may use retirement assets as long as they have the unqualified and unlimited right to request a complete distribution of all funds in the account. Any applicable early withdrawal penalty is subtracted from the balance before the qualifying income is calculated.
What is the maximum LTV on a conventional asset depletion loan?
The maximum LTV/CLTV/HCLTV is 70%. It increases to 80% when the owner of the asset used to qualify is at least 62 years old at the time of closing.
Is cryptocurrency an eligible asset?
No. Virtual currency, including cryptocurrency, is explicitly ineligible under the conventional employment-related assets policy. Some non-QM asset programs do accept Bitcoin, Ethereum, U.S.-listed crypto ETFs, and fiat-backed stablecoins; see our non-QM asset depletion page for details.
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