Freddie Mac announced a set of changes in August 2026 that would meaningfully widen who can use an asset-based mortgage, and the most consequential piece is the removal of an age requirement that has kept this option closed to anyone under 62. If you retired early, sold a business, or take most of your compensation in equity rather than salary, you have probably run into the core problem already: mortgage underwriting is built to measure monthly income, not wealth. Asset-based qualification exists to close that gap, and starting in 2027 it is set to reach a much larger group of people.
What an Asset-Based Mortgage Actually Is
An asset-based mortgage lets a lender qualify you using your accumulated savings and investments instead of, or alongside, traditional employment income. You will also see it called asset depletion, asset amortization, or asset dissipation. All four terms describe the same approach.
The most common misunderstanding is worth clearing up first. You are not pledging your assets, and you are not liquidating them. Nothing transfers to the lender. No one places a lien on your brokerage account. The lender verifies your balances, converts them into a monthly income figure on paper, and then evaluates your debt-to-income ratio, which is the share of your gross monthly income that goes toward debt payments, exactly as it would with a salary.
The second misunderstanding matters just as much. This is not a no-documentation loan, and it is not a stated income product. Asset-based qualification is fully documented, and your accounts are verified through a third party. What changes is which documents establish your ability to repay, not whether documentation is required at all.
How an Asset-Based Mortgage Is Calculated
The math is simpler than most people expect. A lender starts with your total eligible assets and subtracts anything that will not still be there after closing: funds applied at closing, gift funds, borrowed funds, and any portion that is pledged or otherwise encumbered. What remains is your net eligible asset figure. That number is divided by a set number of months, and the result is your qualifying monthly income.
Today that divisor is 240 months. Freddie Mac has announced it will drop to 180 months, which produces roughly 33 percent more qualifying income from the same portfolio.
Consider someone with a $900,000 portfolio who sets aside $150,000 for closing, leaving $750,000 in net eligible assets. Under today's guidelines, dividing that $750,000 by 240 months produces $3,125 in qualifying monthly income. Under the announced guidelines, dividing the same $750,000 by 180 months produces $4,167. The portfolio did not change. Only the divisor did.
Illustrative example only. Figures are hypothetical and do not reflect any actual loan. The divisor is a calculation factor used to convert assets into qualifying income. It is not a loan term and does not represent your repayment period. Your results will differ.
Roughly $1,000 a month in additional qualifying income is not a rounding error. Depending on your other obligations and the rest of your file, it can be the difference between two very different price ranges, or between an approval and a decline.
What Freddie Mac Announced for 2027
The revisions came in Guide Bulletin 2026-10, published August 5, 2026. As announced, they apply to mortgages with settlement dates on or after February 3, 2027, and lenders are permitted to adopt them earlier.
Four changes stand out. The age requirement is the largest. Current rules generally restrict the use of checking, savings, and brokerage accounts for asset-based qualification based on the account owner's age. Removing that restriction means a 48 year old who recently sold a company could be evaluated under the same guidelines as a 70 year old retiree, though eligibility still depends on credit, debt-to-income, reserves, property type, and automated underwriting results.
The divisor change from 240 to 180 months is the second, and it is the one that most directly affects buying power. Third, occupancy opens up. Asset-based qualification is currently limited to primary residences and second homes, and the announced guidelines extend it to investment properties. Fourth, the current ceiling of 80 percent loan-to-value, meaning the loan amount as a percentage of the home's value, would be replaced by standard loan-to-value limits.
These changes are described here as announced. Freddie Mac can revise or delay them before the effective date, and individual lenders apply their own additional requirements, called overlays, that can be more restrictive than the guidelines themselves.
Which Accounts Count
Eligible assets generally include:
- Retirement accounts such as 401(k) plans, IRAs, and similar IRS recognized plans
- Checking, savings, and money market accounts
- Brokerage and securities accounts
- Lump sum retirement distributions deposited into a non retirement account
- Proceeds from the complete sale of a business
- Proceeds from the sale of real property
Cryptocurrency does not count. Neither do gift funds, borrowed funds, or assets that are pledged or encumbered. Retirement accounts you cannot access yet without penalty, and accounts you do not fully own, are treated differently depending on the situation, so those are worth a specific conversation rather than an assumption in either direction.
The Seasoning Rules That Catch People Off Guard
The announced guidelines pair the expanded eligibility with seasoning requirements, which exist to prevent someone from temporarily parking money in an account to qualify. They are reasonable rules, but they have sharp edges if you do not plan around them.
Assets generally need 12 months of seasoning before your note date unless they came from a recognized source, such as a retirement account transfer, a transfer from another depository or brokerage account, a lump sum distribution, proceeds from a business sale held at least 90 days, or proceeds from a property sale.
The rule that surprises people most involves withdrawals. If a checking or savings account declined more than 20 percent over the preceding 12 months, it may not be usable at all. A large increase gets attention too, and eligible assets may be limited to 120 percent of the prior year's balance unless the increase traces back to one of the recognized sources. The practical takeaway is about sequence. If you are planning a significant withdrawal for a car, a renovation, or tuition, the timing of that withdrawal relative to your home purchase genuinely matters. Have the conversation before you move the money.
What This Means for Your Cash at Closing
Lifting the loan-to-value ceiling changes the planning conversation more than the headline suggests. Selling appreciated positions to fund a larger cash contribution can trigger a capital gains bill and force a portfolio rebalance on someone else's schedule. Financing a larger share leaves more of your money invested. It also generally requires mortgage insurance above 80 percent loan-to-value, which raises your monthly payment and the total cost of the loan. Which path is better depends on your rate, your tax position, and your expected return, and it is a conversation for your tax and financial advisors alongside your loan officer.
Closing costs deserve attention in the same conversation, because they come out of the same accounts. Most lenders charge origination, underwriting, and processing fees, then pass through third party costs like title and settlement, and for a borrower qualifying on assets, every dollar of that is a dollar pulled out of an invested portfolio. CapCenter charges ZERO Closing Costs on purchase, refinance, and home equity loans, which keeps more of your portfolio intact and working. For someone whose entire qualification rests on the size of that portfolio, that is not a small detail. It also feeds directly back into the math above, since a smaller cash requirement at closing means a larger net eligible asset figure.
Who Should Be Looking at This
Asset-based qualification tends to fit retirees and early retirees drawing down savings, federal and military retirees with substantial TSP balances, people who recently sold a business, professionals paid largely in equity, and anyone financially secure but between roles. What these situations share is a strong balance sheet paired with thin documented monthly income.
If you have been declined before, the reasons matter. The adverse action notice you received lists the specific factors behind that decision, and if age eligibility or the 240 month divisor was among them, those factors may be treated differently once your lender adopts the updated guidelines. Every new application is underwritten on its own merits, so a decline under the old framework does not automatically predict the outcome under the new one.
Frequently Asked Questions
Is there an age requirement for an asset-based mortgage?
Current Freddie Mac rules generally include an age based restriction on using checking, savings, and brokerage accounts this way. Bulletin 2026-10 announces its removal for mortgages settling on or after February 3, 2027, with earlier lender adoption permitted.
Do I have to sell my investments or pledge them to the lender?
No. Your assets stay in your accounts and under your control. The lender verifies the balances and converts them to a qualifying income figure on paper.
Can I use cryptocurrency?
No. Cryptocurrency is not eligible, along with gift funds, borrowed funds, and pledged assets.
Can I use an asset-based mortgage for an investment property?
Not under current rules, which limit it to primary residences and second homes. The announced guidelines extend eligibility to investment properties, subject to lender adoption.
Is this the same as a no-doc or stated income loan?
No. Asset-based qualification requires full documentation and third party verification of your accounts.
The Bottom Line
The version of asset-based qualification arriving in 2027 is a different product than the one available today. A larger eligible population, roughly a third more qualifying income from the same balances, investment properties in scope, and standard loan-to-value limits together move this from a narrow retiree program to a mainstream option for anyone whose wealth does not show up neatly on a pay stub.
Timing is the part worth thinking through now, because the seasoning rules reward planning ahead and penalize improvisation. The most useful thing you can do well before you are ready to buy is understand how your accounts will be read. Our purchase calculator runs the numbers without an application, and our guide to mortgage pre-approvals covers what lenders look at beyond income.
If you are asset rich and income light and you have assumed a mortgage is not realistic, that assumption is worth revisiting. Reach out to a CapCenter loan advisor and we will walk through your numbers and tell you honestly where you stand, whether the answer is today or after the new guidelines take effect.
