August Realtor Newsletter

neevpettel5
Aug 23
2 min read

One Financing Strategy Every Realtor Should Know: Asset Depletion

Market Snapshot

Mortgage Rates: 30-year fixed mortgage rates continue to hover in the mid-to-upper 6% range, creating affordability challenges but also encouraging buyers to explore creative financing options.
Affordability Remains the Biggest Hurdle: Higher financing costs continue to impact purchasing power, making specialized loan programs more valuable than ever.
Creative Financing is Winning Deals: Programs like Asset Depletion, Bank Statement, DSCR, and Down Payment Assistance are helping buyers qualify who may not fit conventional lending guidelines.

Product Spotlight:

Asset Depletion Loans

Not every qualified buyer receives a traditional paycheck. Retirees, investors, and clients living off their assets often have substantial wealth but limited reportable income.

An Asset Depletion Loan allows eligible assets to be used to create qualifying monthly income, helping asset-rich borrowers purchase or refinance a home.

How It Works

Eligible assets are reviewed using the most recent six months of documentation:

Cash (100%)
Stocks, Mutual Funds & Bonds (90%)
IRAs & 401(k)s (80%)
Other eligible retirement accounts (80%)

After applying the appropriate percentage and subtracting required reserves, the remaining assets are divided by 60 months to determine qualifying monthly income.

Formula:

Eligible Assets − Required Reserves ÷ 60 = Qualifying Monthly Income

Real-World Example

Borrower Assets

Brokerage Account: $1,000,000
Eligible Value (90%): $900,000
Less Required Reserves: $40,000
Assets Used for Qualification: $860,000

Qualifying Income

$860,000 ÷ 60 =$14,333 per month

With a 20% down payment, that income could support approximately a $975,000–$1,000,000 purchase, depending on interest rates, taxes, insurance, and other monthly obligations.

Learn More

Great Fit For

Retirees
Clients living off investment portfolios
High-net-worth individuals
Clients between careers
Buyers with significant savings but limited taxable income

Realtor Conversation Starter

"Do you have significant assets or retirement accounts, even if your current income isn't very high?"

If you have a client who is asset-rich but income-light, let's review the scenario before assuming they don't qualify. Asset Depletion financing may open the door to homeownership.

Neev Pettel

Loan Officer | NMLS# 2644881

npettel@cfmtg.com

831-247-3062

cfmtg.com/npettel

4500 Biscayne Blvd Suite 320

Miami, FL 33137