Colorado Asset Utilization Loans: Qualifying High-Net-Worth Borrowers Without Employment Income

A comprehensive field guide for mortgage brokers packaging asset-based mortgages in Colorado

Search intent and audience

This article is for mortgage loan officers and brokers who work with affluent clients in Colorado whose wealth is concentrated in liquid accounts rather than in recurring employment income. These clients often include recent business sellers, investors between distributions, semi-retired executives, physicians who have shifted into consulting, and family office principals who prefer to keep taxable income low. The goal is to give you a clear, repeatable framework to qualify them through asset utilization so your quotes are credible, your conditions lists are tight, and your closings are smooth.

What asset utilization is and where it fits

Asset utilization converts verified balances into qualifying income that can be used in place of or in addition to traditional W-2 or K-1 income. Underwriting imputes a monthly figure from eligible assets that the borrower already holds. This method fits buyers who want to keep investment strategies intact rather than engineer taxable events just to qualify for a mortgage. In Colorado this is common for clients purchasing in the Front Range, the central mountains, or the Western Slope where price points and insurance can be high and where premium homes often attract buyers with complex balance sheets.

Asset utilization is distinct from bank statement underwriting. Bank statements translate deposits from an operating business into income. Asset utilization starts with wealth already on the balance sheet and does not require business deposits. It is also distinct from property cash flow programs. If the subject is an investment property and the sponsor wants qualification to ride on rent coverage instead of personal liquidity, direct them to an Investor DSCR loan comparison before ordering valuation.

Eligible asset types and common haircuts

Underwriting prefers verifiable and reasonably liquid assets. Checking, savings, and money market funds are typically counted at face value. CDs that mature inside the lock period usually qualify as liquid. Brokerage accounts that hold mutual funds, ETFs, blue chip stocks, and investment grade bonds are generally eligible at or near face value, subject to standard documentation. Retirement accounts can count with access-based adjustments. Pre 59 and a half accounts often carry a deeper haircut to reflect taxes and penalties. After 59 and a half, plan rules determine how much credit the program gives. Vested RSUs and ESPP shares are eligible once deposited into a brokerage account. Unvested equity is excluded. Privately held shares without an active market, thinly traded penny stocks, and undocumented crypto are usually ineligible or heavily discounted. Margin or pledged accounts may be limited or excluded because the collateral is already encumbered.

When you assemble the file, separate accounts by type then apply the appropriate haircut so the borrower sees a conservative and realistic Eligible Asset Base. This transparency prevents late stage re-trades when credit re-runs your math.

How imputed income is calculated in practice

Non QM investors use two primary methods. The first method divides the Eligible Asset Base by a program factor such as 60, 84, or 120 months to create a monthly income number. The second applies a conservative annual draw rate, for example 2 to 3 percent, then divides by 12. Haircuts are applied before the math. The program will not allow you to count one hundred percent of every asset type and then take a draw. Instead, reduce retirement and concentrated equity positions first, exclude pledged balances, then calculate.

Here is a simple workflow you can mirror with clients in a screen share. List each account and current balance. Note the haircut for that asset class and compute the adjusted balance. Sum the adjusted balances into the Eligible Asset Base. Divide by the program factor, for example eighty four. Compare the result to the target PITIA plus consumer debt. If you do not have the real insurance quote yet, use a conservative estimate for wind, hail, and wildfire risk so your math will not collapse later in underwriting.

Program terms Colorado brokers care about

Asset utilization is available for primary residences, true second homes, and many investment properties. Purchases and rate or term refinances are common, while cash out is available subject to LTV and asset composition overlays. Maximum LTVs for primary and second homes are usually higher than for investment homes. Pricing shifts with LTV, credit depth, reserve coverage, and the quality and diversity of the asset base. Many programs allow a co-borrower who contributes assets while another contributes traditional employment income. This can be helpful for couples where one spouse is retired and the other has a W-2. Reserve requirements are additive. Programs often require several months of PITIA in reserves after closing, separate from the assets used to impute income. That means you must plan both the funds to close and the post close reserves simultaneously.

Documentation and packaging that keeps conditions light

Submit complete PDF statements for all accounts used in the Eligible Asset Base. For brokerage accounts include the most recent monthly statement and the most recent quarterly report that shows positions, cost basis, and account ownership. For retirement accounts provide the plan summary that explains distribution rights and penalties. If equity compensation is part of the picture, include grant letters, vesting schedules, and proof that vested shares have been delivered into the brokerage account. If a recent liquidity event explains a large balance or a large deposit, attach the trade confirmations. Provide a clear source of funds narrative so the reviewer understands where money came from and how it will move for closing.

Because many Colorado buyers wire from custodians rather than banks, add a one paragraph memo that outlines wire logistics. Name the custodian, the expected processing time, and the contact method you will use to verify wire instructions by phone with the title company. This reduces last mile friction and protects against fraud.

Pre underwriting workflow for brokers

Start with a five minute balance audit and haircut map. Create a table that lists each account, the haircut, and the adjusted balance. Run PITIA estimates that reflect Colorado realities. Property taxes vary by county and can be materially different between Denver County, Douglas County, Boulder County, and El Paso County. Insurance varies by risk. Use realistic figures for wildfire exposure in the foothills, snow load in the high country, and hail along the Front Range. If the property is in a condo or townhome project, collect HOA dues and clarify what the master policy covers. Align your rate lock with the expected appraisal and insurance timelines. Mountain markets can require additional scheduling time in winter or during peak tourist seasons.

Before you issue a pre approval letter confirm that the borrower can satisfy reserve requirements after closing. Label which accounts will hold the reserves. Borrowers often assume that the same dollars can be used to both calculate income and serve as post close reserves. Underwriting treats those as different tests. Clarifying this up front prevents surprises when the final conditions list arrives.

When to choose asset utilization versus other Non QM paths

Use asset utilization when liquid wealth is the dominant story. When a self employed client has robust recurring deposits that do not fully show on tax returns, send them to the Bank statement mortgage resource. When the subject property is an investment and the sponsor prefers the decision to hinge on property cash flow rather than personal wealth, keep the file under the Investor DSCR loan category. When an international buyer is in the mix, share Foreign National mortgage options early so identity and asset documentation do not slow the process. Each of these paths can exist inside the same client relationship, but a single subject property should be routed to the one method that best matches its purpose and the borrower’s capacity story.

Property eligibility and collateral notes across Colorado

Most one unit primary residences, second homes, and investment properties are eligible, including SFR, condo, and townhome. Some non warrantable condos are acceptable depending on the program. If a second home will also be offered as a short term rental for part of the year, the file may shift toward investment treatment. Clarify intended use at the first call and review HOA rules so you know whether nightly rental is allowed. For projects with pending litigation or heavy special assessments, collect documents up front so you are not surprised late in the process.

On acreage and mountain properties verify well and septic documentation early. Private road maintenance agreements and snow removal plans can be material. If the property has a guest house or an apartment over a garage, document the unit count and how it will be used. Appraisers and insurers both care about how many kitchens and sleeping areas exist and whether any units will be rented.

Appraisal and valuation in Colorado

Front Range valuations are neighborhood driven and respond to school districts, trail and open space access, and commute patterns. Denver neighborhoods that sit within high scoring school boundaries often command premiums that must be defended with tight comp selection. Boulder County and parts of Jefferson County can be particularly sensitive to view corridors and trail proximity. Colorado Springs and Monument show strong demand from defense and aerospace workers. Provide your appraiser with a packet that outlines recent permits, energy efficiency upgrades, and unique features that may not be obvious in a quick walk through.

Resort markets are their own universe. Summit County, Eagle County, Pitkin County, and Routt County are thin in comp density and seasonal in listing velocity. View, ski access, shuttle proximity, and HOA amenity packages create large adjustment swings. Provide any rental restriction language from the HOA plus recent permits for roof reinforcement or snow load work. In these markets it is prudent to order appraisal early, allow more time for scheduling, and build a longer rate lock to reduce stress.

Western Slope valuations in Mesa and Montrose counties often show broader comp radii and longer look back windows. If the subject has irrigation water shares or outbuildings, include that documentation so the appraiser can evaluate contributory value accurately.

Insurance and risk items that influence PITIA

Colorado insurance is sensitive to wildfire, hail, wind, and water. In foothill zones carriers may require defensible space or proof of recent mitigation work. Along the Front Range hail frequency can drive premiums and deductibles higher than a coastal buyer would expect. In mountain towns, snow load and ice dam risk can push carriers to request specific roof or insulation details. Buyers who expect a coastal style premium may be surprised. Quote early so your imputed income calculation uses real premiums. For condos and townhomes collect the HOA master policy and show what it covers, then obtain an HO6 quote where needed so the client knows the full picture.

Colorado location intelligence for local SEO and scenario realism

Colorado is not a single market. Use local detail in your intake and in your copy to signal fluency and to improve search relevance.

Front Range. Denver County, Arapahoe County, Douglas County, Jefferson County, and Boulder County attract private banking clients who want primary residences or second homes near tech, aerospace, healthcare, and universities. Cherry Creek, Washington Park, Highlands, Boulder West, Louisville, and Superior are common targets for buyers who want neighborhood amenities and trail access. Property taxes are moderate compared to some coastal states but vary by county and by mill levy. Insurance should be estimated with hail and wind in mind.

Colorado Springs and the I-25 corridor south. El Paso County and northern Pueblo County see steady demand from defense, cybersecurity, and medical employers. Monument and Black Forest bring pine trees and snow load considerations. Check for well and septic documentation on acreage.

High country and resort. Summit County, Eagle County, Pitkin County, and Routt County attract second home buyers who want lift access and village amenities. HOA dues vary by project and can materially affect ratios. Some towns restrict short term rental licenses by zone or by cap. Clarify intended use before you promise rental offset to a client. Insurance premiums can be higher than expected for wind and snow. Appraisal scheduling can take longer during peak seasons.

Western Slope. Mesa County and Montrose County offer value driven second homes, mild winters in town, and easier driving to desert recreation. Insurance can be calmer than in the foothills but still investigate hail and wind.

Southern corridor. Cañon City and Pueblo West have emerging luxury acreage that demands clear access and snow removal plans. Verify private road maintenance and easement agreements.

Tie your intake to a next step. When clients have enough information to move forward, route them to Get a Non-QM quick quote with a request for a balance snapshot and HOA or insurance details if relevant.

Risk and compliance guardrails that protect the file

Non QM does not remove the duty to evaluate ability to repay. The imputed income stream must be defensible based on the Eligible Asset Base and the program factor. Reserves must be real and separate from funds to close. Large transfers from brokerage or trust accounts must be sourced. If a trust or LLC will be on title or will provide assets, include the organizational documents. Occupancy must match reality. If a second home will see regular rental use, move the file into the correct channel rather than forcing a second home label that pricing later contradicts. Market drawdowns between application and closing can change balances. Protect your borrower by building a buffer into the qualifying math and by preparing to refresh statements if the investor requests it.

Broker talk track and objection handling

Open the conversation with clarity. Say that you will qualify the client based on liquidity, that you will map accounts and apply published haircuts, and that you will impute a monthly figure that must cover the new home’s PITIA and current obligations. Explain that liquidation is only necessary if cash is required for funds to close or for reserves that the current cash position does not satisfy. If a client worries about a concentrated stock position, explain that diversified funds usually count more favorably because they carry lower volatility. If a client asks why tax returns are not the focus, explain that asset utilization respects their tax planning while still aligning with responsible underwriting.

Frequently asked questions for scenario triage

Do assets have to be sold to count? Not for imputed income. Only funds to close and reserves require cash, so liquidation is optional unless there is a cash shortfall.

How are retirement accounts treated? Access rules and age govern the haircut. Pre 59 and a half balances receive deeper discounts. After 59 and a half plan documents can support more generous credit.

Can vested RSUs count? Yes, once deposited into a brokerage account and subject to standard marketable securities treatment. Unvested grants do not count.

What happens if the market drops during the process? The lender may ask for updated statements. Build a buffer in the qualifying math or move part of a concentrated position into cash equivalents if timing risk is high.

Can occasional short term rental coexist with second home treatment? Possibly, but rules vary by program and by town. If rental use is planned, underwrite as investment or present a side by side DSCR comparison to avoid misalignment.

How many months of reserves should clients expect? Program dependent, but plan for meaningful months of PITIA after closing that are separate from the Eligible Asset Base used to compute imputed income.

Process timeline tuned to Colorado realities

Begin with scenario intake through Get a Non-QM quick quote and a secure upload of recent statements. Within the first day provide a haircut map and a preliminary imputed income figure that is subject to credit and property. Order insurance quotes early for wildfire, hail, and snow load exposures. Order appraisal with a local packet that includes permits, HOA rules, and any rental restrictions. While valuation is in flight verify funds to close and reserves and confirm wire logistics with the custodian. As final conditions approach be ready with updated statements that bridge any market movement between application and clear to close.

Calls to action that convert without friction

Keep your next steps simple. When the client is ready to open a file, use Get a Non-QM quick quote for intake. If deposits are a better story for a self employed buyer, link to Bank statement mortgage. For pure investment use where rents carry the analysis, link to Investor DSCR loan. For international buyers, add Foreign National mortgage options. Reinforce brand authority by referencing NQM Funding as a seasoned Non QM Lender that understands Colorado’s mix of urban, mountain, and resort properties.