Home Equity · 8 min read
Asset Depletion HELOC: How to Qualify for a Home Equity Line on Your Savings
An asset depletion HELOC lets you qualify for a home equity line of credit on the money you have, not the income you report. The lender divides your eligible savings and investments by a set number of months and treats the result as monthly income. You don't spend the assets, and you don't move them.
Key takeaways
- An asset depletion HELOC is also called an asset based HELOC or asset utilization HELOC.
- Lenders count checking, savings, brokerage and retirement accounts, with brokerage and pre-59½ retirement money discounted.
- Expect a credit score around 680 or higher and up to about 80% combined loan-to-value on a primary home.
- It fits retirees, people who sold a business and owners with big balances but small taxable income.
I see this situation every month. A client in Newport Beach or Santa Monica has a paid-down home, seven figures in a brokerage account and a tax return that shows very little income. The bank's HELOC department looks at the return and says no. The money is real; the bank just has no box for it. That is what an asset depletion HELOC is for.
How an asset based HELOC turns savings into income
The lender adds up your eligible assets, applies a discount to anything that could lose value or carries a withdrawal penalty, and divides the total by a set number of months. That monthly figure becomes your qualifying income. The divisor depends on the lender's program: non-QM programs commonly use 60 to 120 months, and some use a longer period. A shorter divisor gives you more qualifying income from the same balance.
The lender then checks that your debts, including a payment on the new line, fit inside its debt-to-income limit, commonly up to about 45% to 50%. If you also have Social Security, a pension, rental income or W-2 pay, many lenders let you add it on top of the asset income.
Which assets count
| Account type | How lenders usually count it |
|---|---|
| Checking, savings, money market, CDs | Usually 100% of the balance |
| Stocks, bonds, mutual funds, ETFs in a taxable account | Commonly 70% to 80% of market value |
| IRA, 401(k) and similar, if you are under 59½ | Commonly 60% to 70% of the vested balance |
| Retirement accounts at 59½ or older | Often up to 100% of the vested balance |
| Money you need for closing costs and required reserves | Subtracted before the calculation |
Lenders want two to three months of statements for every account they count, and they will ask about large recent deposits. Business accounts, crypto, restricted stock and cash value life insurance are lender-by-lender; ask before you count on them.
A worked example
Example: a retired couple in Orange County own a $1,500,000 home with a $400,000 first mortgage they want to keep. They hold $1,200,000 in a taxable brokerage account. At 70%, the lender counts $840,000. Divided by 84 months, that is $10,000 a month in qualifying income, before their Social Security. At 80% CLTV, total debt on the house can reach $1,200,000, so the line could be up to $800,000 if the income supports the payment. In practice most clients ask for far less.
These numbers are an illustration, not a quote. Each lender sets its own divisor, discounts and limits, and I compare them for your file.
Typical terms (November 2026)
- Credit: around 680 or higher; the best terms start higher.
- Combined loan-to-value: up to about 80% on a primary home; lower on second homes.
- Property: mostly owner-occupied homes. On rentals, a HELOC on an investment property or a DSCR loan that qualifies on the rent is usually the better tool.
- Cost: priced above a full-documentation HELOC from a bank or credit union, plus origination and closing costs. Rates have been unusually volatile and change daily; call for today's quote.
- Appraisal: usually a full appraisal on larger lines; some lenders use an automated valuation on smaller ones.
Asset depletion HELOC vs. other ways to tap your money
| Option | Good for | Watch out for |
|---|---|---|
| Asset depletion HELOC | Keeping investments in place while borrowing against the house | Higher cost than a full-doc HELOC; assets must be documented and seasoned |
| Selling investments | No new debt | Capital gains tax and losing future growth |
| Securities-backed line of credit from your brokerage | Fast access, no appraisal | The brokerage can demand more collateral or sell holdings if markets drop |
| Bank statement HELOC | Business owners with strong deposits | Needs 12 or 24 months of steady deposits |
| True no-income HELOC | Very large equity and top credit | Very few lenders; usually about 50% to 60% CLTV |
Who an asset depletion HELOC fits, and who it doesn't
- Retirees living on savings and investments with modest monthly income.
- Owners who sold a business or property and now hold the proceeds.
- Self-employed borrowers whose returns show little income but whose accounts are large.
- People between ventures who have savings but no current pay.
It does not fit someone with little in the bank. If most of your strength is business deposits, a bank statement program will usually count more. If you're paid on 1099s, see the 1099 HELOC. For the full menu, start with my no-doc HELOC guide.
Documents to have ready
- The two or three most recent statements for every account you want counted.
- Your current mortgage statement and homeowners insurance declarations page.
- Photo ID and, if you have other income, proof of it (award letters, pension statements).
- A short note explaining any large recent deposits or transfers.
As an independent mortgage broker, I send one application to the lenders that offer asset-based home equity programs and show you the offers side by side. If an asset-based mortgage on a purchase or refinance fits better, my asset depletion mortgage page covers that.
“For self-employed borrowers, the bank is often the wrong first stop. Business owners write off expenses, which is smart for taxes, but it lowers the income a bank is allowed to count, and many banks simply don't offer self-employed programs. When someone comes to us after a bank said no, I tell them not to give up. We look at what actually comes into their account, through bank statement, P&L and other programs most banks don't have, and very often we find a loan that fits.”
— Mike Basti, Founder & President, Save Financial (NMLS #377740)
Sources (accessed November 12, 2026): CFPB: What is a HELOC?; CFPB: Regulation Z §1026.43 (ability-to-repay rule; HELOCs are excluded); FINRA: Securities-backed lines of credit; IRS: Exceptions to tax on early retirement distributions. Program terms are typical as of November 2026 and vary by lender; we confirm them for your file.
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. This article is general education, not a loan offer or commitment to lend. For a real quote, apply online or call 949-379-5320.