Using assets as income: qualifying without a paycheck

What it actually is, and what it is not

Using assets as income is a division problem. A lender takes the money you have already accumulated, subtracts what you need for the purchase, divides the rest by a fixed number of months, and treats the result as monthly income for qualifying purposes.

Two things it is not. It is not a loan against your investments, and nobody takes control of the account. It is also not a promise that you will actually spend the money down. You keep every dollar, you invest it however you like, and the calculation is a qualifying convention rather than a spending plan.

The two agency programs, side by side

Fannie Mae calls it employment-related assets, and the name is the rule. The assets have to have come from employment — retirement accounts, a severance package, a lump-sum retirement distribution. Ordinary checking, savings and taxable brokerage accounts generally do not count unless you can trace the balance back to an eligible employment source.

Freddie Mac calls it accumulated assets, and takes a broader view. Checking, savings, money market and taxable brokerage accounts all count, alongside retirement money, lump-sum distributions and the proceeds from selling a business.

Then they divide by different numbers.

• Divided by. Fannie uses the loan term, so 360 months on a 30-year. Freddie uses 240 months today, dropping to 180 in February 2027.
• Checking, savings and brokerage. Fannie: generally not eligible. Freddie today: eligible, but at least one account owner must be 62 or older. Freddie from February 2027: eligible with no age requirement at all.
• Retirement accounts. Eligible under both, provided you can reach the money without a penalty.
• Maximum loan-to-value. Fannie: 70%, or 80% if the owner of the assets is 62 or older. Freddie today: 80%. Freddie from February 2027: the 80% ceiling is removed and standard limits apply.
• Property type. Both allow a primary residence or a second home. Freddie adds investment properties in February 2027.

Put a number on it. Take $1,000,000 of eligible assets, after setting aside what the purchase requires:

• Fannie, divided by 360 — $2,778 a month
• Freddie today, divided by 240 — $4,167 a month
• Freddie from February 2027, divided by 180 — $5,556 a month

Same million dollars. Twice the qualifying income depending on the door you walk through.

What Freddie Mac changed

Guide Bulletin 2026-10, published August 5, 2026, rewrites Section 5307.1. The changes take effect for loans settling on or after February 3, 2027, but the bulletin expressly permits lenders to implement immediately — so some already have and most have not. It is worth asking any lender you speak with whether they have adopted it yet, because right now the answer varies.

For what it is worth, I can already do this. Several of the wholesale lenders I work with have implemented the change, so as of August 2026 these can be written now rather than in February. That stops being a differentiator the day the effective date arrives and everybody has it — but for the next few months it is a real one, and it is worth asking about wherever you shop.

What changes:

• The divisor drops from 240 months to 180, which raises qualifying income by a third on identical assets.
• The age-62 requirement disappears for checking, savings, money market and brokerage accounts. This is the biggest change and the least discussed. Until now, a 45-year-old with a large brokerage account got nothing from those funds under Freddie. Now they count.
• Investment properties become eligible, alongside primary residences and second homes.
• The 80% loan-to-value ceiling is removed, and standard limits apply instead.
• A minimum of $30,000 in net eligible assets is established.
• The loan must receive an Accept from Freddie’s automated underwriting.
• Purchases and no-cash-out refinances only.

The catches, which matter more than the headline

Three new requirements arrive with the improvement, and they change what you need to produce.

Twelve months of seasoning. Depository and securities accounts must have been open and funded for twelve months before the note date, unless the money arrived from a documented eligible source. Money that appeared last month does not count. A third-party asset verification report satisfies this, which is usually faster than gathering a year of statements from six institutions.

The 20% test, on checking and savings only. If a depository account has dropped more than 20% over those twelve months, it becomes ineligible entirely — unless the drop is documented as a transfer into a securities or retirement account. If it has risen more than 20%, only 120% of the balance from twelve months ago counts, unless the increase came from a documented eligible source such as a retirement transfer, a lump-sum distribution, or the sale of a business or property.

Read that second one twice if you are planning to move money before closing. Selling investments and parking the proceeds in checking is exactly the pattern that trips it. It is entirely fixable by documenting the transfer, and entirely avoidable by asking first.

The test does not apply to brokerage accounts. Both branches of that rule name depository accounts specifically. A securities account that grew 30% because the market did is not capped.

What comes off the top

The calculation runs on net eligible assets, not the balance on your statement. Subtract everything the transaction consumes: your down payment, your closing costs, any gift or borrowed funds sitting in the account, and any portion pledged as collateral — a margin balance or a securities-backed line of credit disqualifies the pledged amount.

Cryptocurrency does not count at all. Proceeds from selling a business must have sat in an account you own for at least 90 days. And a retirement account only counts if you can actually reach the money without a penalty, which is a real constraint for anyone under 59 and a half.

Who this is genuinely for

Someone who sold a business and has not decided what is next. A retiree with substantial savings and modest reportable income. Anyone mid-sabbatical or between roles. A self-employed borrower whose returns are legitimately written down to very little — good tax planning and mortgage qualifying pull in opposite directions, and this is one of the few honest ways to reconcile them.

And now, because investment properties become eligible, an investor with real assets who would otherwise have been pushed toward a DSCR loan. DSCR is a good product and I write plenty of them, but it prices above conventional. If your assets can carry the qualification, conventional will usually be cheaper. That is worth comparing rather than assuming.

When I would not use it

If you have documentable income that qualifies you, use the income. Asset-based qualifying adds documentation, adds underwriting scrutiny, and adds ways for a file to go sideways. It is a solution to a specific problem, not a shortcut.

It also does not manufacture anything. If the arithmetic does not produce enough monthly income to support the payment, no lender can wish it into existence — and a smaller loan or a larger down payment is the honest answer rather than a more creative program.

One more thing worth saying plainly: the money has to be yours. Assets are divided by the borrower who owns them. If the accounts belong to a spouse, a partner or a trust, that changes who has to be on the loan, and it is much easier to sort out before an application than after.

What I would do first

Before anyone pulls your credit, get three answers. Which agency the lender intends to use. Whether they have adopted Bulletin 2026-10 yet. And what your accounts have done over the last twelve months.

Those three answers determine whether this works, and all three are free to ask. If a lender cannot answer them, that tells you something too.

Guideline summaries reflect Fannie Mae Selling Guide B3-3.4-06 and Freddie Mac Single-Family Seller/Servicer Guide Section 5307.1 as revised by Guide Bulletin 2026-10, published August 5, 2026, effective for settlement dates on or after February 3, 2027 with optional earlier implementation. Agency guidelines change and individual lenders apply their own overlays. This is general information, not a commitment to lend or an offer of credit.