Asset Depletion Loans in Flagstaff, AZ
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⭐ 5.0 rating · 3 client reviews · 10 years originating loans · Access to 40+ wholesale lenders · NMLS #1618313 (Company NMLS #130562) · Licensed: AZ, CO
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What is an asset depletion mortgage?
An asset depletion mortgage qualifies you for a home loan based on your liquid assets — savings, investments, retirement accounts — instead of employment income. The lender divides your eligible assets by 60 to 360 months to derive a monthly qualifying figure.
The mechanic is simple: you don't need a paycheck if you have enough wealth to demonstrate ability to repay over the loan term. The lender doesn't liquidate your assets — they only use the balance as evidence of repayment capacity. Your investments stay invested. Your retirement accounts stay intact. The mortgage payment comes from any source you choose.
For Northern Arizona — where Flagstaff and Sedona attract retirees from California's Bay Area, equity-rich downsizers from Phoenix, and second-home buyers from out of state — asset depletion is one of the most-needed and least-known mortgage products. Through 40+ wholesale lender relationships, Alison matches your specific asset profile to the program with the best calculation method (84-month vs 240-month vs 360-month divisors produce dramatically different qualifying figures).
Confidential.
How is asset depletion income calculated?
The lender totals your eligible liquid assets, applies an age-based discount (50% on retirement assets if you're under 59.5), and divides by the program's depletion period — typically 60, 84, 240, or 360 months.
The divisor matters more than most buyers realize. Here's why:
Simplified example: A borrower with $1.5M in eligible liquid assets divided by 360 months = $4,166/month qualifying income. Same $1.5M divided by 84 months = $17,857/month qualifying income. Same assets, dramatically different qualifying capacity. This is exactly why broker network access matters — Alison's 40+ wholesale lender relationships include programs across all four divisor structures, so the calculation is matched to the buyer's goals, not the first lender's default.
Eligible asset categories (typical):
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100% of checking, savings, money market, CDs
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100% of stocks, bonds (must be fully vested)
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100% of retirement assets if you're 59.5+
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50–70% of retirement assets if you're under 59.5 (early-withdrawal-penalty discount)
Not eligible (typical):
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Annuities
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Cash value of life insurance
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Vehicles, art, collectibles
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Business assets (must be personal accounts)
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Real estate equity
Element | Typical range |
|---|---|
Real estate investor scaling a rental portfolio | DSCR loan |
Retiree or high-net-worth with strong assets but no W-2 income | Asset depletion mortgage |
Recent business seller / liquidity event | Combined (asset depletion + bank statement) |
Self-employed with strong deposits but tax-return-suppressed income | Bank statement loan |
1099 contractor with seasonal income | Combined (bank statement + asset depletion overlay) |
Buying a log home, manufactured home, mixed-use, or rural acreage | Unique property mortgage |
Foreign national buying US real estate | Combined non-QM (foreign national track) |
Recent credit event (bankruptcy, foreclosure) with strong recovery | Combined (specific recovery-period programs) |
We model multiple structures before you choose.
Who benefits from an asset depletion loan?
Four borrower profiles see the biggest qualifying lift from asset depletion: retirees, business owners with strong assets and aggressive deductions, recent business sellers, and high-net-worth investors with portfolio income that doesn't qualify as employment income.
Retirees — the most-common asset depletion borrower. If you've built a $500K-$5M+ retirement portfolio but stopped earning W-2 income, asset depletion lets you qualify on what you've saved without forcing early RMDs or asset liquidation. The Equal Credit Opportunity Act prohibits age-based mortgage denial — and asset depletion is the program that operationalizes that for buyers without employment income.
Self-employed buyers with substantial savings. When tax returns understate your income because of legitimate business deductions but your savings show your real financial strength, asset depletion can qualify you for the loan amount your business actually supports. Often combined with bank statement loans for hybrid qualification.
Recent business sellers / liquidity-event borrowers. Just sold a business, exercised stock options, or received an inheritance distribution? Conventional underwriting wants 2 years of tax returns showing the new income state. Asset depletion can qualify you on the proceeds today.
High-net-worth investors. Portfolio income (dividends, capital gains, real estate) doesn't always count as conventional qualifying income. Asset depletion uses the underlying portfolio value instead.
For Flagstaff and Sedona specifically: This audience is large and underserved. The ZIP codes around Forest Highlands (Flagstaff) and the Village of Oak Creek (Sedona) carry some of the highest concentrations of retiree and high-net-worth buyers in Northern Arizona, with median home prices well above the conforming loan limit.
No commitment.
Asset depletion program parameters
Most programs require $500K–$1M+ in eligible liquid assets, 660–700+ FICO, 15–25% down, and accept primary residence, second home, and investment property. Loan amounts to $3M+ on jumbo programs.
Element | Typical range |
|---|---|
Real estate investor scaling a rental portfolio | DSCR loan |
Retiree or high-net-worth with strong assets but no W-2 income | Asset depletion mortgage |
Recent business seller / liquidity event | Combined (asset depletion + bank statement) |
Self-employed with strong deposits but tax-return-suppressed income | Bank statement loan |
1099 contractor with seasonal income | Combined (bank statement + asset depletion overlay) |
Buying a log home, manufactured home, mixed-use, or rural acreage | Unique property mortgage |
Foreign national buying US real estate | Combined non-QM (foreign national track) |
Recent credit event (bankruptcy, foreclosure) with strong recovery | Combined (specific recovery-period programs) |
No asset disclosure required upfront.
Asset depletion loans across Arizona
DSCR loans get a lot of bad press from buyers who confuse them with no-doc loans of the pre-2008 era. They're not the same product. Here's what's actually true.
Myth 1: "DSCR loans don't verify ability to repay." The property's cash flow IS the verified ability to repay. CFPB ability-to-repay rules apply differently to non-owner-occupied loans, but the lender still verifies the deal makes financial sense — through DSCR, reserves, and credit.
Myth 2: "I can't use DSCR for my first investment property." Yes you can, on most programs. Some lenders prefer borrowers with prior investment experience, but plenty of DSCR programs welcome first-time investors. The property still has to cash-flow.
Myth 3: "Rates are too high to make the deal work." Rates run 1–2.5% above conforming. On a typical Sedona STR cash-flow analysis with strong nightly rates, that spread is absorbed by rental income — and you avoid the personal-DTI hit that would prevent your next acquisition.
Myth 4: "STR income won't qualify." It does on most programs Alison brokers. Programs that don't accept STR income are filtered out before you waste an appraisal. This is exactly the kind of wholesaler-matching that broker access solves.
Myth 5: "I have to put it in an LLC." No. Most DSCR programs allow personal-name vesting OR LLC. LLC is common for asset-protection reasons, but it's not required for the loan.
— Real answers, no scripted reads.
Asset Depletion Loan FAQs
Related Programs for Self-Employed and High-Net-Worth Buyers
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Bank statement loans — for self-employed buyers using deposits to qualify (often combined with asset depletion)
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DSCR loans — for investors using property cash flow
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Non-QM loans — the umbrella category [NEEDS-INPUT: link when built]
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Mortgage Lender in Flagstaff, AZ — full service overview
Ready to qualify on what you've built?
Whether you're retiring to Sedona, downsizing in Flagstaff, or buying a second home in Northern Arizona — your liquid assets are the qualifying income most lenders won't show you how to use. Alison will.
Confidential. No obligation. No early-RMD pressure.