Asset Depletion · 9 min read

Fannie Mae and Freddie Mac Asset Depletion Guidelines, Explained

Both Fannie Mae and Freddie Mac let borrowers turn savings into qualifying income, but the rules are narrower and the math is far more conservative than a non-QM asset depletion loan. Fannie Mae divides eligible retirement-type assets by the loan term, usually 360 months. Freddie Mac divides net eligible assets by 240 months today, moving to 180 months under its August 2026 bulletin. Non-QM programs commonly divide by 60 to 84 months. Here’s how each works, with the numbers side by side.

Fannie Mae: “employment-related assets as qualifying income”

Fannie Mae’s rule lives in Selling Guide section B3-3.4-06. It is built around money tied to your working life, not general savings.

Eligible: retirement accounts such as a 401(k), IRA, SEP or Keogh where you have unrestricted access to the full balance, and lump-sum severance or retirement distributions.

Not eligible: stock options, non-vested restricted stock, lawsuit settlements, lottery winnings, proceeds from selling real estate, inheritances, divorce proceeds and virtual currency. Ordinary checking and savings balances generally don’t count unless the money came from an eligible source, like a severance package.

The math. Start with the eligible balance, subtract any penalty for a full withdrawal, then subtract the money you need for the down payment, closing costs and required reserves. Divide what’s left by the loan’s amortization term in months.

Fannie’s own example: a $500,000 IRA with a 10% early-withdrawal penalty leaves $450,000. Subtract $100,000 for closing costs and reserves and you have $350,000. Divided by 360 months, that’s $972.22 a month of qualifying income.

Limits. Maximum LTV is 70%, or 80% if the person who owns the assets is at least 62 at closing. It’s available for purchases and limited cash-out refinances on a primary residence or second home. There’s no requirement that you be retired.

Freddie Mac: “assets as a basis for repayment”

Freddie Mac’s version is Guide section 5307.1, and it is broader about which assets count. Depository accounts and securities can qualify, along with retirement assets.

The math. Net eligible assets are your total eligible assets minus the funds needed to close, any gift or borrowed funds, and any assets pledged as collateral. Under the current rule, that figure is divided by 240 months.

The 2026 change. Freddie Mac Bulletin 2026-10, issued in August 2026, reworks this section. According to the bulletin summary:

• The divisor drops from 240 to 180 months, which raises the income the same assets produce by a third.
• The age-62 requirement for depository accounts and securities is removed.
• At least $30,000 in net eligible assets must remain.
• The special 80% LTV cap is removed, so standard maximums apply.
• Primary residences, second homes and investment properties are all eligible.
• The loan must be a purchase or no-cash-out refinance with an Accept from Freddie’s automated underwriting, and assets generally need 12 months of seasoning.

The new rules are required for loans settling on or after February 3, 2027, but lenders may adopt them sooner. Whether a lender uses 180 or 240 months today depends on that lender, so ask.

Non-QM asset depletion: the faster divisor

Non-QM asset depletion loans aren’t bound by agency rules. They typically count a wider range of liquid assets, apply a haircut to riskier ones like stocks or retirement accounts, and divide by a much shorter period, commonly 60 to 84 months. Loan sizes run well beyond conforming limits.

The tradeoff is usually the down payment: our asset-based program generally calls for around 25% down. Pricing moves with the market, so we compare agency and non-QM options side by side.

Same assets, three very different incomes

Here’s what $1,500,000 of net eligible assets produces under each approach, before any lender-specific haircuts:

For a modest loan, the agency route can be enough, and it’s cheaper. For a larger California purchase, the agency math often falls short and non-QM fills the gap. Fannie Mae also only counts employment-related assets, so a borrower whose wealth sits in a brokerage account may only qualify through Freddie Mac or non-QM.

Which route should you use?

• Retirement accounts, modest loan, conforming size: start with Fannie Mae or Freddie Mac.
• Brokerage or savings accounts: Freddie Mac, especially once a lender adopts the 180-month rule, or non-QM.
• Jumbo loan or you need the income to stretch further: non-QM asset depletion.
• You also have some income: asset income can usually be added to pension, Social Security or other documented income.

As an independent broker, Save Financial can run the same balance sheet through agency and non-QM lenders and show you the loan amount each one supports. If you’re retired, our guide to mortgages for retirees covers the other options too.

Sources: Fannie Mae Selling Guide B3-3.4-06; Freddie Mac Guide Bulletin 2026-10. Guidelines change; confirm current rules with your lender.

About this article: Save Financial is a California-licensed independent mortgage brokerage (NMLS #377740, DRE #01875766) in business since 2009, with offices in Newport Beach and Marina del Rey, serving all 58 counties. We have closed hundreds of non-QM loans and shop 20+ wholesale lenders to match you with the right program. This article is general education, not a loan offer or commitment to lend. For a real quote, apply online or call 949-379-5320.