Jumbo Asset Depletion Mortgage Lenders
Eligibility – Borrowers must have a minimum of $1MM in Qualifying Assets and a minimum FICO of 700. Assets used for qualifying must be seasoned for one hundred twenty (120) days unless pre-approved by the Purchaser. Bitcoin or other forms of cryptocurrency can be utilized as “Qualifying Assets” to the extent the cryptocurrency was converted or liquidated to cash and the cash holding meets seasoning requirements of one hundred twenty (120) days. Cryptocurrency that has not been converted or liquidated to cash (still in cryptocurrency form) cannot be utilized as a Qualifying Asset.
Net Assets:
o If the assets or a portion of the assets are being used for a down payment or costs to close, those assets should be excluded from the balance before analyzing a portfolio for income qualification
Qualifying Assets:
o Net assets multiplied by the following percentages:
• 100% checking/savings/money accounts
• 80% of the remaining value of stocks/bonds / mutual funds
• 70% for all vested retirement assets
• For accounts with margin loans, only the margin amount that is available for withdrawal is allowed
Qualifying Income
Asset Depletion: Qualified assets with utilization draw schedule of seven (7) years (Qualified Assets divided by 84).
Asset Utilization: To determine residual income, Qualifying Assets are divided by eighty-four (84) months. From this number, subtract the Borrower’s total monthly debt obligation (total liabilities) to produce the Borrower’s residual income. Do not impute tax deductions when determining residual income. Residual income must meet or exceed Section 12.3 Residual Income.
Asset Depletion / Asset Utilization
Asset-based programs are designed to meet the Ability to Repay (ATR) requirements. This is accomplished by requiring debt to income (DTI) in the Asset Depletion program and the requirement of a residual income calculation in the Asset Utilization program. The unrestricted liquid assets can be comprised of stocks/bonds / mutual funds, vested amounts of retirement accounts and bank accounts. For Asset Depletion, the utilization of financial assets will be considered as Borrower income to qualify for their monthly payments. For Asset Utilization, the utilization of financial assets will be used to calculate a Borrower’s residual income.
A Borrower using Asset Depletion/Asset Utilization cannot use other sources of employment income.
o Nonemployment sources of income will be considered on a case-by-case basis
Program Requirements
Asset Depletion/Asset Utilization will be qualified under the Full Documentation Program Matrix with restrictions outlined in the Product Matrix.
Reserves are not required for Borrower(s) qualifying with Asset Depletion/Asset Utilization programs.
Asset Depletion Requirements:
Borrowers must have a minimum of the lesser of:
o $1mm in Qualified Assets OR must have Qualifying Assets >= to 125% of the original loan amount
The minimum amount of qualified assets that a borrower must have is $450k
Asset Utilization Requirements:
o Borrowers must have a residual income greater than or equal to Residual Income
o Total post-closing assets must be >/= 125% of the original subject loan amount
o The minimum amount of qualified assets that a borrower must have is $450k
Not permitted:
o Non-Owner Occupied or Second Homes (see program Matrix for max LTV and program
eligibility)
o Cash-Out
o Gift funds
o Business Assets
o Trust Assets
o Foreign Assets
o Non-Occupant Co-Borrower
o For accounts with margin loans, only the margin amount that is available for withdrawal
is allowed
