"Can a Monthly Distribution From My Savings Count as Income for a Mortgage? Asset Depletion, Set Up Before Closing"

The paychecks stopped two years ago, and that was the plan. Your savings and brokerage accounts pay the bills now, with a transfer into checking whenever the balance gets low. It works well for your life. On a mortgage application, though, a few irregular transfers a year look like very little income at all.

Yes, with some lenders. Under Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2, you can set up a regular monthly distribution from savings or investment accounts you have owned for at least 12 months. Once the first payment arrives before closing, it counts as income. The accounts paying it cannot also be your down payment or reserves.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states. Luxury Mortgage Corp. is a wholesale lender I work with. The figures on this page for its program come mostly from Section 5.1.4, Asset Depletion, of its Simple Access Non-QM underwriting guidelines, version 9.2, dated July 8, 2026 and revised July 31, 2026. Another lender's program will have its own percentages, time periods and paperwork, so please read these numbers as one lender's rules.

How does asset depletion work for a mortgage?

The guidelines open the section with one sentence: "Non-retirement assets may be set up for regular distribution payments and used as qualifying income." Non-retirement assets here means money outside a 401(k) or an IRA, such as checking, savings and a regular brokerage account.

In practice, you ask the bank or brokerage firm that manages the account to pay you a set amount every month. Once that payment is running, it goes on the application as monthly income, alongside anything else you earn.

The timing is written into the same paragraph. The guidelines say the distribution "must be set up and one month's distribution received prior to closing." A plan to start the payments after you move in does not count. The first payment has to be in your account before you sign.

Asset depletion is one of the qualifying routes on non-QM loans, the mortgages written outside the Fannie Mae and Freddie Mac guides. Simple Access is Luxury Mortgage's non-QM program, and its guidelines say a loan eligible for sale to Fannie Mae or Freddie Mac is not eligible for any Simple Access program. So if your loan would be eligible for sale to Fannie Mae or Freddie Mac, for example through one of the routes further down this page, it cannot be a Simple Access loan. The glossary entry for asset depletion has the short definition if you want it in one line.

The 84-month rule and the $8,333 example

The guidelines set the size of the payment with a single rule: "Any distribution set up must have 84 months of continuance." Eighty-four months is seven years. The balance behind the distribution has to be large enough to keep the payment going for that long.

The lender's own example uses $700,000:

Luxury Mortgage Simple Access, Section 5.1.4 example

Qualified assets                          $700,000
Divided by 84 months                          / 84
                                        -----------
Most the lender will count                  $8,333 a month
                                       ($100,000 a year)

The guidelines call $8,333 "the maximum distribution that can be utilized." You can arrange a larger payment with your bank if you want one, and the lender will still count no more than the balance divided by 84.

There is a second test as well. Distribution income cannot be used "if there is any knowledge or documentation indicating that the distribution will terminate within the next three years." Section 5.1.1 of the same guidelines asks that three-year question of every kind of income on the file. A distribution set to end in two years would fail it, however large the payments.

The accounts that count, and at what percentage

The guidelines list two kinds of accounts and the share of each that counts toward the balance.

Kind of account	Share of the balance that counts
Checking and savings	100%
Marketable securities, such as publicly traded stocks, bonds and funds	100%
Other assets	Case by case, based on your ability to reach the money without restriction or penalty

Balances have to be verified within 60 days of the date you sign your loan papers, which the guidelines call the note date. An underwriter may ask for a more recent statement than that.

You need documentation showing you have owned the financial assets for at least 12 months and that you have "unrestricted access" to them. The guidelines do not list which documents prove the 12 months. If the money moved recently from an older account, please tell me early so we can confirm with the lender what will show it.

Deposits are read closely too. Any deposit greater than 10% of the account's value on the most recent statement has to be sourced and documented. Gift funds, or any deposit the lender cannot accept, come off the total before anything is divided. The post on which bank deposits an underwriter will ask you to explain covers how that paper trail usually gets built.

The money you can no longer use for the down payment

The guidelines say accounts "utilized to derive income (distributions) cannot be used as a qualifying asset for reserves or down payment."

Once an account is paying your monthly income, the lender stops counting it as savings. Your down payment, your closing costs and any reserves the loan asks for all have to come from other money. Reserves are the savings a lender wants to see left over after closing, measured in months of your housing payment.

That same sentence has a second part. Income the account produces, "i.e., interest, dividends, capital gains," cannot be counted "in addition to distributions." If your brokerage account pays $2,000 a month in dividends, that $2,000 does not stack on top of the distribution. The post on how dividend, interest and trust income reaches a mortgage application covers the separate route where that investment income is the thing being counted.

That means you will want to decide which of your accounts will pay you every month, and which will pay for the home and stay behind as reserves. I would rather work that out with you before you call your bank than after.

Comparing this with the other ways to qualify on savings

The biggest difference between the ways to qualify on savings is whether the same money can also cover your down payment and closing costs.

	This distribution (Simple Access, Section 5.1.4)	Asset Qualifier (Simple Access, Section 5.4)	Fannie Mae, B3-3.4-06	Freddie Mac, Section 5307.1
Money actually paid out to you each month	Yes, before closing	No	No	No
How the monthly figure is set	Balance divided by 84, at most	Assets left after closing divided by 84	Retirement assets divided by the months in the loan term	Assets left after closing divided by 240
Down payment from the same money	No	Yes, it comes off first	Yes, it comes off first	Yes, it comes off first

Luxury Mortgage's Asset Qualifier, which divides your savings by 84, is a separate product in the same guidelines. No distribution is set up at all. The lender subtracts what you spend at closing and divides the rest. Both divide by 84. The Asset Qualifier lets you pay your down payment and closing costs out of the same savings before it does the math. With the distribution route, the lender counts a payment you actually receive, but the accounts paying it cannot be used for your down payment or reserves.

On loans written to the Fannie Mae and Freddie Mac guides, Fannie Mae's route for using retirement savings as qualifying income needs nothing withdrawn. Freddie Mac's divide-by-240 rule for qualifying on savings needs nothing withdrawn either, and it divides by 240.

Retirement accounts have their own paragraph in Section 5.1.4. It asks for at least three years of continuance at closing, and the client using it "must be of retirement age" under that paragraph. If you already draw from an IRA or a pension, how retirement and Social Security income gets documented is the better starting point.

The same non-retirement paragraph appears word for word in Section 5.1.4 of Luxury Mortgage's Simple Seconds guidelines, version 3.0, dated May 12, 2026, which cover a second mortgage behind your existing first one.

The steps, in order

1. The 12-month history. You will need documentation showing at least 12 months of ownership and that you can reach the money without restriction.
2. Recent deposits. Any deposit above 10% of the account's value on the latest statement will need a source, so it helps to gather those records early.
3. Which accounts do which job. The accounts that will pay the distribution stay separate from the money for your down payment, closing costs and reserves.
4. The monthly payment, set up in writing. You ask the bank or brokerage firm to start it, and the guidelines ask for written confirmation from that institution showing the amount, how often it is paid, and how long it is set to run.
5. The first payment, before closing. One month's distribution has to be in hand before you sign.

When you're ready, please provide the most recent year-end statement for each account behind the distribution, and the most recent two months' statements for those accounts. For every statement, please provide all pages, even if the last page is intentionally left blank. We will also need the letter from the institution managing the account, showing the amount, frequency and duration of the payments. The guidelines ask for the year-end statement to show ownership and value. The 12 months of ownership in step 1 is a separate requirement, so the lender may ask for more if these statements do not cover it.

Please talk with your tax advisor before you set anything up, because selling investments to fund the payments can carry a tax bill.

Common mistakes with a savings distribution

Planning the down payment from the same account. The guidelines exclude the accounts behind the distribution from down payment and reserves. A plan that uses one brokerage account for both has to be rebuilt.

Counting the dividends as well. Interest, dividends and capital gains from those accounts cannot be added on top of the distribution.

Setting the payment too high for the balance. The lender counts no more than the qualified balance divided by 84, whatever amount the bank agrees to pay.

Moving money in just before applying. A large deposit into the account has to be sourced, and gift money comes off the total. Please tell me before you move money between accounts.

An illustration with made-up numbers

Numbers below are made up to show the mechanism. They are not a quote.

A client is buying a $750,000 home with 20 percent down. She has $840,000 in a brokerage account she has owned for years and $260,000 in savings. She receives a small pension, and the brokerage account will pay her a monthly distribution.

Brokerage account, paying the distribution

Marketable securities at 100%             $840,000
Divided by 84 months                          / 84
                                        -----------
Most the lender will count                 $10,000 a month

Savings, for everything else

Savings at 100%                           $260,000
Down payment, 20% of $750,000           (-) 150,000
Closing costs                            (-) 22,000
                                        -----------
Left in savings after closing              $88,000

She asks her brokerage firm for a $10,000 monthly distribution and gets the letter confirming it. The first payment lands in her checking account three weeks before closing. On the application, that $10,000 is income alongside her pension, and the $88,000 left in savings is the money a lender can look at for reserves. The $840,000 does not count toward either.

Had she planned to take the $150,000 down payment out of the brokerage account, that plan would have to change before she applied, because the account paying the distribution cannot count toward the down payment.

Availability depends on the lender and the state

Section 3.6 of the Simple Access guidelines, titled Geographic Eligibility, says "See Rate Sheet for State Eligibility." Luxury Mortgage sets the states where the program is offered, and that list can change. Being licensed in fifteen states does not mean this program is offered in all of them. Another lender may offer a similar distribution route with different rules, or none at all.

Your next step

This program is not priced in the rate tool on the homepage, so the place to start is a conversation. Please call me at (843) 765-0000 or email me at jeff@solverya.com. We can go through which accounts would pay the distribution, which would cover the down payment and reserves, and whether the program is offered in your state. I'll also tell you if a Fannie Mae or Freddie Mac route would serve you better. Calls are welcome even if you are only starting to think about it.

Common questions

Can I use asset depletion and still use my savings for the down payment?

Yes, as long as the down payment comes from different accounts. Under Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2, accounts used to pay a monthly distribution "cannot be used as a qualifying asset for reserves or down payment." Your down payment, closing costs and reserves have to come from money that is not paying the distribution.

How much monthly income can my savings support for a mortgage?

Under Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2, the most the lender will count is your qualified assets divided by 84, because the distribution must have 84 months of continuance. The worked example earlier on this page shows the arithmetic. Other lenders and programs use different divisors. Freddie Mac's Section 5307.1 divides by 240, and Fannie Mae's B3-3.4-06 divides retirement assets by the months in the loan term.

Is asset depletion the same as an asset qualifier loan?

No. In Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2, asset depletion in Section 5.1.4 needs a real monthly distribution set up and one payment received before closing. The Asset Qualifier in Section 5.4 sets up no distribution. It divides the assets you have left after closing by 84.

Do I have to withdraw money from my account to use asset depletion?

Under Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2, yes. The distribution has to be set up with the institution managing the account, and one month's payment has to be received before closing. Fannie Mae's and Freddie Mac's asset routes need nothing withdrawn, and neither does Luxury Mortgage's own Asset Qualifier.

Can dividends and interest from the same account count too?

Not under Luxury Mortgage Corp.'s Simple Access Non-QM guidelines, version 9.2. Interest, dividends and capital gains from the accounts paying the distribution cannot be counted in addition to it. Dividend or interest income from other accounts follows its own documentation rules.

Nothing here is a credit decision, an approval or a denial. Lender guidelines change, so please confirm what applies to your own file.