Lending from the Assets You Own: An Alternative Path to Financing

When most people think about getting a loan—whether it's for a home, investment property, or major purchase—they assume their income and job history will be the deciding factors. Traditional lenders typically focus on monthly income, W-2s, and tax returns. But what if you have significant assets and less consistent income? That’s where asset-based lending steps in.

What Is Asset-Based Lending?
Asset-based lending (also called asset depletion loans in the mortgage world) allows borrowers to qualify for financing based on the assets they already own—such as investment accounts, retirement funds, real estate, or even cash savings—rather than just their current income.

Lenders look at your liquid assets and determine how much monthly “income” could theoretically be drawn from them over time, usually using a set formula. This option can be a game-changer for retirees, entrepreneurs, or anyone with non-traditional income streams.

Who Is This For?

• Retirees living off investments or pensions who don't show active earned income

• Self-employed individuals or business owners with fluctuating income

• Real estate investors with equity-rich portfolios

• High-net-worth individuals with significant stocks, bonds, or savings

Types of Acceptable Assets May Include:

• Checking and savings accounts

• 401(k), IRA, and other retirement accounts

• Stocks, bonds, and mutual funds

• Trust accounts or annuities

• Real estate equity (in some lending programs)

Why Consider Asset-Based Lending?

• Flexibility: You don’t need to prove traditional income or employment.

• Access to capital: You can use your existing wealth to qualify without liquidating your assets.

• Smarter strategy: It allows you to leverage your financial position instead of disrupting it.

Key Considerations

• Asset-based loans often come with different interest rates or terms than conventional loans.

• Not all lenders offer this option, and qualification guidelines can vary.

• You must have verifiable and seasoned assets—meaning funds that have been in your account for a certain period (usually 60–90 days).

Bottom Line:
If your wealth is tied up in assets rather than a steady paycheck, asset-based lending can open doors that traditional financing can’t. It's a smart alternative for those who’ve built financial strength outside the typical 9-to-5.

If you're curious whether this could work for your situation, I’m happy to walk you through what lenders look for and whether it's a fit for your next purchase or refinance.

Content by Hailey Potok of The Potok Group

Contact: DRE 02024094
The Potok Group Douglas Elliman
Potokgrouprealestate@gmail.com

Sources:

• Fannie Mae Selling Guide: B3-3.1-08, “Asset Depletion as a Basis for Qualification”

• NerdWallet: What Is an Asset Depletion Mortgage?

• The Mortgage Reports: Asset Depletion Mortgages: How to Qualify Using Assets Instead of Income

• Investopedia: Asset-Based Lending

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