HomeFlowMortgage Advisors

Asset-Based Loans

Your Balance Sheet Can Qualify You, Too.

Some borrowers have substantial financial strength without substantial traditional monthly income. Asset-based lending offers two ways to put that balance sheet to work.

  • Asset Allowance Qualification
  • Asset Only Qualification
  • No Traditional Employment Income Required*
  • Purchase & Refinance Options*
Analyze My Assets 210-993-5023

Quick Answer

Asset-based mortgages allow eligible borrowers to use financial assets as part of mortgage qualification. With Asset Allowance, eligible assets are converted into estimated monthly qualifying income. With Asset Only, qualified assets are measured directly against the amount required by the program, potentially allowing qualification without traditional employment income.

Two Ways Your Assets Can Qualify

Do We Need Income — or Just the Assets?

Asset-based lending can work in two very different ways. One converts eligible assets into monthly qualifying income. The other evaluates whether the assets themselves are sufficient to support the transaction.

Asset Allowance

Turn Assets Into Qualifying Income.

“I have assets, but I need more monthly income to qualify.”

How it works

Eligible assets are divided by a continuance period to produce Monthly Qualifying Income.

Example

Net Eligible Assets
$900,000
Illustrative Continuance
60 Months
Estimated Qualifying Income
$15,000 / mo

Can it combine with other income?

Potentially, yes. Depending on program guidelines, Asset Allowance income may supplement employment, Social Security, pension, or other qualifying income.

“The assets create an income allowance for underwriting.”

Calculate My Asset Allowance

Asset Only

Let the Balance Sheet Qualify You.

“I have substantial assets and don’t want qualification to depend on traditional employment income.”

How it works — under one available Asset Only program

Required Qualified Assets =

  • 100% of subject property loan amount
  • + Closing costs & prepaids
  • + 60 months of applicable net loss on personally vested non-subject real estate

Example

Proposed Loan
$1,000,000
Closing Costs + Prepaids
$30,000
Other Real Estate Net Loss
$2,000 / mo
60-Month Real Estate Requirement
$120,000
Required Qualified Assets
$1,150,000

If qualified assets after applicable program adjustments meet or exceed $1,150,000, the borrower may satisfy this Asset Only coverage test.

No separate reserves*

Under this specific program, reserves are not separately required.

“The assets don’t create income. They demonstrate financial capacity.”

Analyze My Assets

*Program requirements vary. Examples are illustrative and not a commitment to lend.

Creates monthly income?

Allowance

Yes

Asset Only

No

Traditional employment income required?

Allowance

Not necessarily*

Asset Only

No under applicable program*

Uses DTI?

Allowance

Generally yes

Asset Only

Asset-coverage methodology

Can supplement other income?

Allowance

Potentially

Asset Only

Not the objective

Core test

Allowance

Monthly qualifying income

Asset Only

Sufficient qualified assets

Best fit

Allowance

Need more qualifying income

Asset Only

Strong balance sheet / limited income

What Counts as a Qualified Asset?

The percentages below apply to the specific available Asset Only program illustrated on this page. Asset Allowance programs may use different eligible-asset percentages and calculations.

  • Checking / Savings / Money Market100%
  • Publicly Traded Stocks & Bonds100%
  • 401(k) / Retirement — Under Age 59½70%
  • 401(k) / Retirement — Age 59½+80%
  • Cash Value of Life Insurance100%

Unvested RSUs and stock options are excluded under this program.

If a loan is secured against a financial asset being used for qualification, the secured balance is deducted before the applicable asset percentage is applied.

Who This May Fit

Retirees

Substantial portfolios with modest taxable monthly income.

High-Net-Worth Borrowers

Balance sheets far stronger than documented income.

Business Owners

Between liquidity events, or reinvesting instead of drawing income.

Investors

Irregular income streams with deep liquid reserves.

Asset-Based Loans

Let’s Look at the Balance Sheet.

A short review of your assets is usually enough to determine whether Asset Allowance, Asset Only, or a different structure fits best.

Analyze My Assets Call Jonathan

Frequently Asked Questions

Asset Allowance converts eligible assets into an estimated monthly qualifying income that underwriting can use, often alongside other income. Asset Only measures qualified assets directly against a required coverage amount — potentially qualifying you without creating monthly income at all.

No. Both methods are qualification calculations. The lender verifies balances and applies program adjustments — you are not required to sell or withdraw anything.

Under the Asset Only program illustrated on this page, checking, savings, money market, publicly traded stocks and bonds, and cash value of life insurance generally count at 100%, while retirement accounts count at 70% to 80% depending on age. Asset Allowance programs may use different percentages and calculations.

Potentially, yes. Depending on program guidelines, Asset Allowance income may supplement employment, Social Security, pension, or other qualifying income to strengthen the debt-to-income ratio.

Under the applicable Asset Only program, no. Qualification is based on whether qualified assets meet or exceed the required coverage amount — not on pay stubs, tax returns, or employment.

Under this specific program, reserves are not separately required — the qualified-asset coverage test is the measure. Other asset-based programs may require reserves separately.

Retirees, high-net-worth borrowers, business owners between liquidity events, and investors whose balance sheets are stronger than their documented monthly income.

Related

Non-QM OverviewAsset Allowance CalculatorAsset Only CalculatorJumbo LoansReverse Mortgages