Freddie Mac Asset Depletion Guide

Most high-net-worth borrowers in Columbus still try to qualify the same way a W-2 employee does: last two years of tax returns, a paystub, and a debt-to-income ratio built only from what the IRS already saw. That is why self-employed owners with large write-offs, and recently retired households that no longer show much taxable income, keep getting told they “do not qualify” even when the brokerage statements are large.

I am Joseph Sauk with Sauk Mortgage Group. In a recent short I walked through a conventional tool a lot of those files never get offered: Freddie Mac asset depletion, also called using accumulated assets as qualifying income. Watch it here: Freddie Mac asset depletion, 20 years down to 15. The headline is simple. Freddie Mac used to convert net eligible assets into monthly qualifying income by dividing over 20 years. Guide Section 5307.1 now divides over 15 years. Same assets. More qualifying income on the file.

The published change is Freddie Mac Bulletin 2026-10 (August 5, 2026), which updates Guide Section 5307.1. Sellers may implement immediately. The change is required for mortgages with settlement dates on or after February 3, 2027. This article is educational. It is not a commitment to lend, and it does not promise a payment, a lock, or an approval.

If you are buying or doing a no-cash-out refinance in Columbus, Dublin, Westerville, Hilliard, Grove City, Upper Arlington, New Albany, or Powell, start at saukmortgagegroup.com or call (614) 353-5088 with statements in hand. Independent broker second look: compare your best mortgage options before you lock a bank quote that ignored the assets.

What asset depletion actually is

Asset depletion is not a separate “rich person loan” with a different product name on the note. It is a Freddie Mac underwriting method. The lender documents eligible assets, subtracts amounts that cannot be counted, and divides what is left into a monthly figure. That figure can be used as qualifying income in the debt-to-income ratio, alongside any other eligible income the file already has.

Joe’s short called out the two Columbus files this usually helps:

Self-employed borrowers with heavy write-offs. The business is real. The tax return is designed to reduce taxable income. A retail desk that only reads Schedule C net profit will understate repayment ability.
Recently retired borrowers. The W-2 stopped. Social Security, pension, or required minimum distributions may not cover the new payment on paper, even when the investment accounts can.

High balances alone do not finish the file. Credit, occupancy, property type, Loan Product Advisor findings, reserves, and lender overlays still apply. Asset depletion is a qualifying-income method inside a conventional Freddie Mac mortgage, not a shortcut around underwriting.

The change: divide by 15 years instead of 20

Under the prior Guide calculation, net eligible assets were divided by 240 months. That is 20 years. Bulletin 2026-10 reduces the division factor to 180 months. That is 15 years. Joe’s video is describing that exact change.

Illustrative math only, using round numbers so the divisor is the only moving part:

$900,000 net eligible assets / 240 = $3,750 per month of qualifying income.
$900,000 net eligible assets / 180 = $5,000 per month of qualifying income.

That is $1,250 more qualifying income per month from the same leftover assets, with no extra paycheck. Another illustration: $1,500,000 / 240 = $6,250 per month. The same $1,500,000 / 180 = $8,333 per month. The shorter divisor is why Joe said Freddie Mac now lets the lender use more income.

Do not plug your current brokerage total into that math and call it a pre-approval. The divisor applies to net eligible assets after required deductions, and only after the account types pass 5307.1.

Net eligible assets are smaller than the statement total

Freddie Mac’s method is not “take every dollar you own and divide.” Before the 180-month division, the lender has to strip out money that is not available to repay the mortgage. In practice that includes:

Funds needed to complete the transaction: down payment, closing costs, and prepaid items the borrower is paying.
Gift funds and borrowed funds.
Any portion of assets pledged as collateral or otherwise encumbered.

Example: $1,000,000 in otherwise eligible assets, minus $150,000 needed at closing, leaves $850,000. $850,000 / 180 is about $4,722 per month. The same leftover pile / 240 would have been about $3,542 per month. If the file also has pension or Social Security, those sources can still be documented separately. Asset depletion is additive when the other income is eligible. It does not replace a full underwrite.

Bulletin 2026-10 also sets a floor: at least $30,000 in net eligible assets must remain for this method. $30,000 / 180 is only about $167 per month. That floor opens the calculation. It does not, by itself, qualify a Dublin or Upper Arlington purchase.

Who this helps in Central Ohio

Sauk Mortgage Group sees this conversation most often with:

Owners in Dublin, Westerville, and Hilliard whose tax returns show modest net profit after depreciation, retirement contributions, and other legal write-offs.
Households that just sold a business or a rental and parked the proceeds, then went house-hunting in New Albany, Powell, or Grove City before a new W-2 existed.
Retirees leaving a large employer in Columbus who have brokerage and retirement accounts but a thin current-pay file.
Investors who want a conventional path on an investment property instead of jumping straight to a Non-QM product because the tax return is ugly.

Joe’s short also noted something borrowers mix up with Non-QM: this is still a conventional Freddie Mac loan. It is not automatically a bank-statement, DSCR, or asset-utilization Non-QM file with a different product rate sheet. Pricing still depends on credit, occupancy, loan-to-value, property, and the rest of the file. Nobody can honestly tell you it will price “the same as a W-2 employee” until that file is run. What is true is the product family: conventional qualifying income from assets, not a separate high-cost niche loan just because you are retired or self-employed.

Other 5307.1 updates that matter as much as the 15-year math

The divisor is the clip-sized headline. Bulletin 2026-10 changed more than the month count. If we only talk about 20-to-15 and skip the rest, a Columbus file will still die in underwriting.

The loan has to be an Accept Mortgage

Freddie Mac now requires the mortgage to be an Accept Mortgage when accumulated assets are used as qualifying income. In practice that means the file needs an acceptable Loan Product Advisor result. A large statement balance does not override credit events, occupancy, or property issues that produce a Caution or ineligible finding.

Primary, second home, and investment property

Older 5307.1 language limited this method to one- or two-unit primary residences and second homes. The update permits all occupancy types: primary residences, second homes, and investment properties. That is a real change for Central Ohio investors who have cash and brokerage accounts but tax returns that do not support the new payment. It is still not a DSCR loan. DSCR qualifies from the property’s rent. This method qualifies from the borrower’s eligible personal assets.

Purchase or no-cash-out refinance only

Loan purpose is limited to a purchase or a no-cash-out refinance. Cash-out is not the use case Joe was describing. If you need cash-out in Hilliard or Westerville, we look at other conventional or Non-QM paths. Do not assume asset depletion will fund a cash-out.

The special 80% LTV cap is gone

Prior Guide language capped these files at 80% LTV / TLTV / HTLTV. Bulletin 2026-10 removes that special cap and points maximum ratios back to Section 4203.1. You are not automatically forced into 20% down just because assets are helping the income calculation. The actual maximum still depends on occupancy, units, credit, and the rest of 4203.1. Mortgage insurance, reserves, and lender overlays can still require more cash in.

Age restriction removed for depository accounts and securities

Freddie Mac removed the borrower age restriction that applied to depository accounts and securities used under this section. You do not have to be retirement age for checking, savings, money market, stocks, bonds, or similar eligible accounts to be considered, provided the rest of 5307.1 is met. That matters for younger business-sale files and for borrowers well under 59.5 who were previously told this method was “for retirees only.” Retirement-account rules remain their own tests in 5307.1. Do not treat every IRA dollar as automatically eligible just because the age cap on bank and brokerage accounts moved.

Documentation that still stops a file

Freddie Mac also tightened how the money has to look on paper. This is where a viral short becomes a 30-day underwrite.

12-month seasoning. Depository accounts and securities generally must be seasoned for 12 months before the Note Date, unless the account was funded from an eligible documented source.
Depository balance dropped more than 20%. If the current statement is more than 20% below the statement from 12 months earlier, those depository accounts are not eligible to qualify the borrower, unless the drop is documented as a transfer into eligible securities or retirement accounts.
Depository balance jumped more than 20%. The eligible amount is generally capped at 120% of the value from 12 months earlier, unless the increase is documented as an eligible transfer, a lump-sum distribution, proceeds from the sale of the borrower’s business, or proceeds from the sale of the borrower’s real property, each meeting the matching 5307.1 subsection.
Business-sale proceeds. Must have been deposited into a depository or securities account the borrower owns and held continuously for at least 90 days as of the current account statement.
Real-property sale proceeds. Now an eligible source to fund a depository or securities account, with documentation.
Third-party verification. Reports that meet Section 5302.3(a) can be used to document depository accounts and securities.

If you moved money last month to “look qualified,” that is the opposite of what 5307.1 wants. Bring 12 months of statements, a paper trail for large transfers, and the closing disclosure from any recent business or property sale.

How a Columbus second look actually runs

Sauk Mortgage Group is an independent mortgage broker, not a single-bank retail desk. Joe Sauk shops lenders that can actually deliver a Freddie Mac asset-income file, then compares that path against a bank-statement, DSCR, or standard W-2 file when those fit better. The working phrase is still the same: compare your best mortgage options.

On the call we want:

The last 12 months of statements for every account you want counted.
A list of funds already earmarked for down payment and closing.
Tax returns if you are self-employed, even if we are not using the net profit as the main income.
The property target: city, occupancy, purchase vs refinance, and whether cash-out is in play.
Any existing pre-approval letter so we can see whether the first lender ignored the assets.

Sometimes the first lender was already right, and you should stay put. Sometimes the file only works because 5307.1 now divides by 180. Either answer is useful. A broker who cannot say “keep the bank” is not comparing options.

Frequently asked questions

Is this live now, or do I have to wait until 2027?

Bulletin 2026-10 is required for mortgages with settlement dates on or after February 3, 2027. Freddie Mac also allows sellers to implement immediately. Whether your file can use 180 months today depends on the lender overlay, not on the YouTube comment section. Ask before you write an offer in Upper Arlington on the assumption that every desk has flipped the switch.

Can I use this on a cash-out refinance in Columbus?

Not under this 5307.1 path. The update specifies purchase or no-cash-out refinance. If cash-out is the goal, we review other conventional and Non-QM options. Do not count asset depletion as the cash-out plan.

I have $30,000 left after closing. Am I done?

No. $30,000 is the minimum net eligible asset amount to use the method. Divided by 180, it is a small qualifying-income figure. Most Dublin and New Albany purchases that need this tool have far larger leftover assets after down payment and costs. The floor is a gate, not a target.

Does a big brokerage account replace an Accept finding?

No. The mortgage must be an Accept Mortgage. Assets help the income calculation. They do not erase credit, occupancy, or property findings that keep Loan Product Advisor from issuing Accept.

If the short described your file – self-employed with write-offs, recently retired, or asset-rich with thin taxable income – send the statements to Joe Sauk at Sauk Mortgage Group. saukmortgagegroup.com | (614) 353-5088 | Columbus, OH.

Equal Housing Opportunity. Educational information only; not a commitment to lend. All loans subject to credit approval, program availability, lender overlays, and current Freddie Mac Selling Guide requirements. Company NMLS #1879972 | Joseph Sauk NMLS #589820. Sauk Mortgage Group Ltd.