The Asset-Rich Borrower: High-Net-Worth Lending, Pledged Assets, and Crypto

The retired founder with $6 million in a brokerage account and $40,000 of reportable income. The trust beneficiary whose distributions don't look like income on any form an underwriter recognizes. The early employee whose net worth is in equity and digital assets. These borrowers can buy the house in cash and often would rather not — and conventional underwriting, which asks "what's your monthly income," has no idea what to do with them. This is the cleanest use case in all of Non-QM, and the files close smoothly once you pick the right structure.

Asset utilization, in practice

Also called asset depletion or asset amortization, the concept is straightforward: eligible liquid assets are divided by a defined number of months to create a monthly qualifying income figure. If an investor uses an 84-month divisor and the borrower has $2.1 million eligible after haircuts, that's $25,000 a month of qualifying income — used exactly like salary in a DTI calculation. Nothing gets liquidated. The borrower doesn't sell a single share; the assets simply have to exist, be documented, and stay eligible through closing. Divisors vary widely between investors — 60, 84, 120, 180 months, sometimes tied to the loan term or the borrower's age — and that single variable can double or halve qualifying income.

Know the haircuts before you calculate

• Checking and savings — typically counted at or near 100%.
• Stocks, bonds, and mutual funds — commonly discounted to 70–80% for volatility.
• Retirement accounts — often 60–70%, and frequently excluded or further restricted if the borrower is below the penalty-free withdrawal age.
• Business accounts — usually require the borrower to be sole owner or to document access, and many investors exclude them entirely.
• Gift funds, borrowed funds, and non-vested equity — generally excluded from the eligible base.

Quote off the raw account balances and you'll be having an awkward conversation later. Apply the investor's actual haircut schedule first, then calculate. And check whether the down payment and closing costs must come out of the asset base before the depletion math runs — several investors require exactly that, which quietly reduces qualifying income on a large purchase.

Pledged assets: borrowing against instead of documenting

A different structure entirely, and one worth knowing for the right client. In a pledged-asset arrangement, the borrower collateralizes a securities portfolio in lieu of some or all of the down payment. The appeal is tax-driven: selling $400,000 of long-held appreciated stock to make a down payment can trigger a substantial capital gains bill, while pledging it triggers nothing. The tradeoffs are that the pledged assets are encumbered, market declines can prompt additional collateral requirements, and these programs come from a narrower set of lenders — often private banking arms rather than standard Non-QM investors. When a client's CPA is in the conversation, this structure frequently wins.

How crypto actually gets treated

Digital assets have moved from automatic decline to conditional acceptance at a growing number of investors, but the conditions are consistent and worth memorizing. Nearly all require conversion to US dollars and deposit into a US-domiciled financial institution, with seasoning — commonly thirty to sixty days — before the funds count. Documentation typically means exchange statements showing ownership history, the transaction record of the sale, and the deposit landing in the borrower's account. Volatility haircuts apply if any investor counts holdings pre-conversion, which most don't. Advise the client to convert and season early; a borrower who liquidates the week before closing has created a sourcing problem, not a solution.

Serving this client well

High-net-worth borrowers judge you on discretion, precision, and speed rather than rate shopping. Ask for statements early and read them properly — the difference between a taxable brokerage account and an IRA changes qualifying income materially. Coordinate with their CPA and financial advisor rather than around them; those professionals become referral sources when you make them look prescient. And run the numbers three ways — asset utilization, pledged asset, and conventional if any income exists — before you recommend one. The Scenario Desk will surface which of your investors publish the most favorable divisor and haircut schedule for a given asset mix, with the guideline page attached.