Louisiana Asset Depletion Mortgages: A Strategy for Retirees and Wealthy Clients

For affluent clients and retirees in Louisiana, proving income can often become the biggest hurdle to securing a mortgage. Traditional underwriting relies heavily on W-2s, tax returns, and regular pay stubs. But what happens when your client’s wealth is tied up in investments, retirement accounts, or real estate holdings — and they’re no longer “working” in the conventional sense? That’s where asset depletion mortgages come in.

An asset depletion mortgage allows borrowers to qualify based on the assets they have, rather than income they earn. It’s a powerful option for high-net-worth individuals, early retirees, and trust beneficiaries who may not meet traditional income documentation standards but have the financial wherewithal to comfortably repay a mortgage.

How Asset Depletion Mortgages Function

Asset depletion mortgages calculate a borrower’s monthly income by dividing their total qualifying liquid assets over a predetermined amortization period. At NQM Funding, that period is typically 84 months. This method creates a fictional income stream derived from existing assets, used purely for underwriting qualification.

For example, a borrower with $2,100,000 in qualified liquid assets (after down payment and reserves) would show $25,000/month in calculated income. That figure can be used to qualify under standard debt-to-income ratio guidelines, often enabling far more purchasing power than their tax returns would imply.

Not all assets are eligible. NQM Funding allows 100% of cash and cash equivalents, 80% of stocks and bonds, and 70% of vested retirement funds. However, business accounts, unseasoned foreign accounts, and funds not seasoned for at least 3 months are ineligible.

Challenges with Traditional Documentation for Affluent Clients

Retirees and wealthy individuals in Louisiana often manage their wealth with tax efficiency in mind. This results in relatively low adjusted gross income (AGI) on tax returns — especially if they rely on dividends, capital gains, or tax-free municipal bond income.

Mortgage brokers working with these clients quickly discover that tax returns and W-2s paint an incomplete picture. Asset depletion lending flips the script, allowing you to structure a loan that reflects their true financial position — not just the income they show to the IRS.

Why Louisiana Is Ideal for Asset Depletion Lending

In cities like New Orleans, Baton Rouge, and Lafayette, Louisiana has a sizable population of affluent homeowners and retirees. Many are downsizing, relocating from colder climates, or cashing out of businesses. They often bring significant wealth to their transactions — just not W-2 income.

Additionally, Louisiana’s estate laws, homestead protections, and relatively low property taxes make it a popular destination for high-net-worth individuals and retirees. The demand for luxury homes along Lake Pontchartrain or in the Garden District of New Orleans continues to grow, but traditional lending often stalls due to unconventional income.

Asset depletion mortgages offer a way forward.

Program Guidelines and Features from NQM Funding

NQM Funding offers asset depletion mortgages through its Flex Supreme and Flex Select programs. Here’s how the structure works:

• Minimum Seasoning of Assets: 3 months of statements required.

• Income Calculation: Net eligible assets ÷ 84 months = qualifying monthly income.

• Maximum LTV: Reduced by 10% from standard LTVs (e.g., 70% instead of 80%).

• Restrictions: Not available on cash-out refinances or in combination with other income types.

This program is designed for borrowers who will only qualify on assets — meaning it cannot supplement other income streams like rental income or 1099 earnings.

Eligible Asset Types

• Personal checking and savings accounts

• Money market accounts

• Mutual funds and publicly traded stocks (80%)

• Retirement accounts (if vested and accessible, 70%)

• CDs or treasury bonds

Ineligible assets include:

• Business funds

• Restricted stock

• Unseasoned foreign assets

• Real estate equity unless liquidated and seasoned

Comparing Asset Depletion to Other Alternative Income Programs

NQM Funding offers a full suite of Non QM Loan options tailored to self-employed or unconventional borrowers. These include:

• 2-Month Bank Statement Loans: Best for business owners or 1099 contractors with fluctuating income but strong bank deposits.

• Profit and Loss-Only Loans: Useful for borrowers with CPA-prepared financials.

• Foreign National Loans: Ideal for international buyers with global assets.

While bank statement and P&L options are ideal for business owners, asset depletion is more suited to retirees, trust fund beneficiaries, or anyone liquid enough to qualify without income documentation.

Ideal Borrower Profiles for Asset Depletion Loans

Mortgage brokers in Louisiana are likely to encounter several ideal use cases for this loan type:

• Retired executives with significant savings and investments

• Trust fund recipients with no verifiable employment

• Recently divorced individuals with liquid assets

• High-net-worth clients relocating without jobs

• Individuals taking a “gap year” before returning to the workforce

While each case is unique, they share one commonality: assets are abundant, but verifiable income is limited or non-existent.

Regional Lending Considerations in Louisiana

Lenders and brokers operating in Louisiana must remain aware of local title procedures, estate structures, and property types. For example:

• Waterfront Properties: Many buyers use trusts or LLCs for liability protection. Asset depletion loans may need careful vesting and trust approval steps.

• Hurricane Zones: Higher insurance premiums must be factored into DTI. A robust asset base can mitigate concerns.

• Gated Communities: Large HOA dues may affect qualification but are typically acceptable with high liquidity.

These regional nuances mean brokers must work with a Non QM Lender that understands the Louisiana market. NQM Funding is experienced in structuring deals in both urban centers and resort-style communities.

How Mortgage Brokers Can Leverage This Product

For brokers, asset depletion loans open doors to serving affluent clientele that traditional lenders often turn away. Position this product as a solution for the silent majority of wealthy individuals whose tax returns do not tell the whole story.

In luxury markets like River Ranch (Lafayette), Old Metairie (New Orleans), and Southern Trace (Shreveport), brokers should build referral partnerships with CPAs, wealth managers, and estate planners. Many of their clients are ideal candidates for this product.

Also, emphasize the speed and flexibility of working with NQM Funding. As a top-tier Non QM Lender, they specialize in niche borrower scenarios and offer competitive pricing for asset depletion loans that meet all underwriting requirements.

Tips for Smoother Processing and Faster Closings

Asset depletion loans move faster when files are well-documented from the start. Brokers should:

• Submit full asset statements covering a 3-month period

• Source all large deposits clearly

• Avoid co-mingled business and personal accounts

• Include letters of explanation for recent career changes or retirements

• Use seasoned U.S. accounts only

Preparing your client early with a documentation checklist can eliminate back-and-forth during underwriting.

Start Structuring Your Next Asset-Based Loan

If you have a client in Louisiana with strong assets but limited income, it’s time to consider an asset depletion mortgage. NQM Funding offers competitive rates, quick underwriting, and a team that understands the complexities of non-traditional borrowers.

Get started with a Quick Quote or explore more about Non QM Loan programs on NQM Funding’s homepage.

Asset-based lending isn’t a niche product anymore. It’s the future of smart, flexible mortgage financing — and a powerful tool for brokers working with high-net-worth borrowers in Louisiana.

Common Misconceptions About Asset Depletion Mortgages

Many mortgage professionals mistakenly believe that asset depletion is only for the ultra-wealthy. In truth, this loan strategy applies to a broader demographic than most realize. Retirees with a modest $1 million portfolio can often qualify for homes in the $400,000–$600,000 range — without needing traditional employment.

Another misconception is that borrowers must deplete or spend their assets to qualify. This is not the case. The lender is not requiring the borrower to draw down their assets — they’re simply using those assets to simulate a monthly income stream for underwriting purposes. The assets remain untouched in most scenarios.

Who Should Avoid Asset Depletion Loans?

This program isn’t right for everyone. Some examples of borrowers who may not be a fit:

• Business owners who want to leverage retained earnings (business accounts are excluded)

• Borrowers who recently received a windfall but can’t document three months of seasoning

• Buyers who want to do a cash-out refinance (not permitted under current guidelines)

• Investors looking to pair asset depletion with other non-QM documentation methods

For these scenarios, brokers should look into NQM Funding’s suite of other options, such as DSCR loans, Foreign National loans, or Bank Statement loans, which offer more flexibility depending on borrower profile.

Louisiana’s Wealth Migration and What It Means for Brokers

The rise in remote work, retiring Baby Boomers, and tax-friendly estate planning has created a quiet wealth migration into Louisiana. Many buyers are choosing to settle in tax-advantaged parishes or near lifestyle-driven communities such as Covington, Baton Rouge, and Lake Charles. These clients often arrive with significant assets, but no employment history in-state.

Asset depletion loans allow brokers to quickly and effectively serve this new wave of buyers. It’s also an excellent way to form long-term relationships with financial advisors and attorneys helping these clients transition into retirement or relocation.

Integrating Asset Depletion Into Your Loan Toolkit

Mortgage professionals looking to stay competitive in Louisiana’s luxury and retiree markets must have asset depletion as a core offering. It’s no longer a specialty product — it’s a necessity for clients whose wealth outpaces their W-2s.

Set yourself apart by marketing this strategy in your next email campaign, CE class, or referral partner lunch. Use terminology that resonates: “retirement-qualified mortgages,” “asset-based lending,” or “income simulation approvals.”

The clients are out there. They just need the right Non QM Lender — and the right broker — to bring the deal together.