Every mortgage conversation starts with the same question: what's your income? For most buyers that means pulling W-2s, pay stubs, and a couple years of tax returns and letting an underwriter do the math. But there's a second, far less understood path into a mortgage — one that has nothing to do with a paycheck at all. It's called asset-based income, or accumulated-assets-as-income, and it's been quietly available for years. I'd guess fewer than one in twenty buyers I talk to have ever heard of it.
Freddie Mac just made this path considerably stronger. Bulletin 2026-10, issued August 5, 2026, rewrote the underwriting math and eligibility rules for using savings, investments, and certain sale proceeds as qualifying income — and for a lot of Lowcountry buyers, this is the kind of change that turns "I don't think I can qualify" into "actually, you can."
Retiring to the Lowcountry? Jump to how this rule works for Hilton Head, Bluffton, and Beaufort buyers.
What Asset-Based Income Qualifying Actually Is
The basic idea: instead of showing a lender a paycheck, you show them a pool of eligible assets — money sitting in checking, savings, CDs, or investment accounts. The lender divides that pool by a set number of months (the "divisor") to produce a monthly qualifying income figure, which then gets used in your debt-to-income ratio exactly like a paycheck would. No W-2, no pay stub, no explaining gaps in employment history for that portion of your file.
This isn't a fringe or exotic product. It's a standard conventional underwriting path Freddie Mac has offered for years — it's just been underused, largely because so few buyers and even agents know to ask about it.
What Just Changed: The Divisor Dropped From 240 to 180
The single biggest change in Bulletin 2026-10 is the divisor itself. Freddie Mac reduced it from 240 months to 180 months — meaning the same pool of assets now converts into roughly 33% more qualifying monthly income than it did before. Here's what that looks like across a few asset levels:
| Eligible Assets | Old Qualifying Income (÷240) | New Qualifying Income (÷180) | Monthly Increase |
|---|---|---|---|
| $300,000 | $1,250 | $1,667 | +$417 |
| $500,000 | $2,083 | $2,778 | +$694 |
| $750,000 | $3,125 | $4,167 | +$1,042 |
| $1,000,000 | $4,167 | $5,556 | +$1,389 |
For a borrower whose approval is being capped by debt-to-income ratio rather than by the size of their down payment, that extra qualifying income can be the difference between a maximum purchase price that felt disappointing and one that actually matches their budget.
The Loan-to-Value Cap Disappeared, Too
The second major change is easy to overlook but just as significant. Asset-based qualifying used to come with a hard 80% loan-to-value (LTV/TLTV/HTLTV) ceiling, regardless of how strong the rest of the file looked — meaning a 20% down payment was mandatory simply because of how you qualified, not because your credit or reserves required it. Freddie Mac removed that special cap. Asset-qualified loans now follow the same standard LTV limits as any other conventional loan, which opens the door to meaningfully lower down payments for borrowers who previously had no choice but to bring 20% down.
The Age Restriction Is Gone, Too — What "Under 59.5" Actually Means Here
This is the change most people ask about once they hear "asset as income," and it's worth being precise, because two different age rules get confused with each other constantly.
Since 2017, Freddie Mac's own guideline required that at least one borrower be 62 years old or older to use depository accounts and securities as qualifying income. The logic at the time was that borrowers of "retirement age" were the ones most likely to actually be living off savings instead of a paycheck. Bulletin 2026-10 removes that 62-and-older requirement entirely for depository accounts and securities. There is no longer a minimum borrower age to use eligible checking, savings, CD, or brokerage account balances as qualifying income.
That's a different rule from the one most people actually think of when they hear "59.5" — the IRS threshold for penalty-free withdrawals from a 401(k) or IRA. That IRS rule hasn't changed and isn't what Bulletin 2026-10 touches. If you're under 59.5 and pull money out of a retirement account, you're generally still looking at a 10% early-withdrawal penalty on top of ordinary income tax, regardless of how a lender treats that account for qualifying purposes. Retirement accounts carry their own separate considerations for exactly this reason.
What actually changed is narrower and, for a lot of younger buyers, more useful: a 35-year-old with $600,000 sitting in a brokerage account or a high-yield savings account — inheritance, a liquidity event, aggressive saving, doesn't matter how it got there — can now use that money as qualifying income the same way a 65-year-old retiree always could. You don't have to touch a retirement account or trigger any penalty at all. Depository and securities accounts simply no longer have an age floor.
A 38-year-old software engineer with $450,000 in a taxable brokerage account, largely between contract roles, would have been ineligible to use that account as qualifying income under the old 62-and-older rule — full stop, regardless of the balance. Under Bulletin 2026-10, that same $450,000 now converts to $2,500 a month in qualifying income at the new 180 divisor, with no age requirement standing in the way.
What Counts as an Eligible Asset
Under the updated Guide, the main categories of eligible assets are:
- Depository accounts — checking, savings, money market, and CDs
- Securities accounts — brokerage and investment holdings, documented through a third-party verification report
- Proceeds from the sale of a borrower's business — eligible once deposited and held in an account for at least 90 days
- Proceeds from the sale of a borrower's real property — an eligible source to fund a depository or securities account
Retirement account eligibility involves its own set of considerations depending on your age and whether funds are accessible without penalty — worth a direct conversation rather than an assumption either way.
The Fine Print Worth Knowing
A few guardrails come with the new rule:
- The mortgage must be a purchase or a "no cash-out" refinance — this rule doesn't apply to cash-out refinances
- Only what you have left after closing counts. Your down payment, closing costs, and any required reserves come out first, and the remainder has to be at least $30,000
- Depository accounts and securities generally need to be seasoned for 12 months prior to the note date, unless funded from an eligible source like the sale of a business or property
- If a depository account's balance dropped more than 20% over the trailing 12 months, it isn't eligible unless the decrease is documented — for example, as a transfer between the borrower's own accounts
- The borrower age restriction that used to apply to depository accounts and securities has been removed
These revisions are officially mandatory for mortgages with settlement dates on or after February 3, 2027 — but Freddie Mac is allowing lenders to implement them immediately, which means I can already use this for qualifying buyers today.
Picture a retired couple with $600,000 spread across a brokerage account and a handful of CDs, no W-2 income to speak of, and a home they want to buy in Bluffton. Under the old math, that $600,000 converted to $2,500 a month in qualifying income. Under the new rule, it's $3,333 — over $800 a month more, without a dollar more in the bank. That's the kind of gap that changes what "approved" actually looks like.
Who This Is Actually For
This update lines up well with who's buying in the Lowcountry right now:
- Retirees and near-retirees — substantial savings or investment accounts, modest W-2 or 1099 income, the classic fit for this rule
- Younger asset-rich buyers — no longer excluded by the old 62-and-older floor; someone in their 30s or 40s with a large brokerage balance, inheritance, or liquidity event now qualifies the same way a retiree does
- Business owners and sellers — proceeds from a business sale now count once seasoned 90 days in an account
- Second-home and investment buyers — strong portfolios, non-traditional income, exactly the profile buying in Hilton Head and Bluffton
None of this replaces a conversation about your specific numbers — the eligible-asset rules, the seasoning requirements, and how this blends with any other income you have are all file-specific. But if you've ever been told you don't qualify because your income doesn't look the way a bank wants it to, this is worth a second look.
Retiring to Hilton Head, Bluffton, or Beaufort? How This Rule Works Here
If you're reading this from another state and the plan is to retire to the Lowcountry, you're the buyer this rule fits best. You have real assets and not much of a paycheck. Two things decide how far those assets go once you get here.
1. Your down payment comes off the top
Only the assets you still have after closing count. Freddie Mac subtracts your down payment, your closing costs, and any reserves the loan requires before dividing by 180, and what's left has to be at least $30,000.
Say a couple retiring from New Jersey has $700,000 in savings and $500,000 in a brokerage account. They buy a $500,000 home in Bluffton with $200,000 down and about $10,000 in closing costs. That leaves $990,000, which works out to $5,500 a month in qualifying income before any Social Security or pension is added.
2. Lowcountry carrying costs use up qualifying income fast
That income gets measured against your full monthly housing cost, and three parts of that cost work differently here than where you're coming from.
- Property taxes at 4% or 6%. South Carolina taxes your legal residence at a 4% assessment ratio and every other home at 6%, and you have to apply for the 4% rate. On a $500,000 home in unincorporated Bluffton, Beaufort County's calculator shows about $2,434 a year at 4% and $7,434 at 6%. A second home stays at 6%. I explain the rule, and the homestead exemption at 65, in my guide to the 4% vs. 6% rule.
- HOA dues and regime fees. Base dues in Sun City Hilton Head are about $235 a month in 2026, and many villa and cottage neighborhoods add their own assessment on top. Regime fees on a Hilton Head villa often run higher, because they bundle exterior insurance, grounds, and amenities. Every dollar counts against your ratio.
- Flood and wind insurance. Homeowners policies in coastal counties often exclude wind and hail, which means a second policy. If the home is in a FEMA special flood hazard area, the lender will require flood insurance too.
Here's why those three matter so much with this kind of loan. At a 45% debt-to-income ratio, every $100 of monthly cost takes $40,000 in assets to support ($100 ÷ 0.45 × 180). The limit on your own file may be a little higher or lower, but the scale holds.
| Monthly Cost | Per Month | Assets It Takes at 45% DTI |
|---|---|---|
| Property tax on a $500,000 Bluffton home at 4% | $203 | About $81,000 |
| The same home billed at 6% | $620 | About $248,000 |
| Sun City base HOA dues (2026) | $235 | About $94,000 |
| Each additional $100 (insurance, regime fee) | $100 | $40,000 |
The gap between the 4% and 6% tax bill on that one house is about $417 a month, and it takes roughly $167,000 in assets to cover it. That's why I price the actual tax district, insurance, and dues on a specific address before I tell anyone what they qualify for. Social Security, a pension, or any other income you have carries part of that load too.
Retiring here? Send me two numbers
Roughly what's in your accounts and the price range you're shopping. I'll run the 180-month math against real Lowcountry taxes, insurance, and dues and tell you what you qualify for. No cost and no obligation. Call (404) 398-9991 or send me your numbers. I'm licensed in South Carolina, Georgia, and Virginia.
Frequently Asked Questions
I'm under 59.5 — can I really use this now?
Yes, for depository and securities accounts specifically. The old rule requiring a borrower to be 62 or older to use those account types as qualifying income has been removed entirely. That's separate from the IRS's 59.5 threshold for penalty-free retirement account withdrawals, which hasn't changed — this update doesn't require touching a retirement account or triggering any early-withdrawal penalty at all.
Do retirement accounts count as eligible assets?
Retirement account eligibility depends on specifics like your age and whether the funds are accessible without penalty, so this is a detail worth walking through with a loan officer directly rather than assuming either way.
How is this different from the "asset depletion" loans I've heard of before?
Asset depletion is often a non-QM or portfolio-lender product with its own math and pricing. Freddie Mac's accumulated-assets-as-income rule is a conventional guideline, meaning it can be underwritten as a standard conventional loan rather than a specialty program — which often means more competitive pricing.
Does this work for a refinance?
Yes, for a purchase or a "no cash-out" refinance. It does not apply to cash-out refinance transactions under this specific rule.
Can I combine asset-based income with my regular paycheck?
Generally yes — asset-based qualifying income can typically be blended with traditional income sources to boost your total qualifying income, though the exact combination depends on your file. Worth reviewing your specific numbers directly.
Does this work for a second home, or a home in Sun City Hilton Head?
Yes. The updated rule allows primary residences, second homes, and investment properties. A 55+ community like Sun City doesn't change how the rule works, but the monthly HOA dues count against your debt-to-income ratio. A second home in South Carolina is also taxed at the 6% assessment ratio, which raises the monthly payment you have to qualify for.
I live in another state. Can I use this to buy in South Carolina?
Yes. This is a national Freddie Mac guideline, so it doesn't matter where you live now. What matters is where the home is. I'm licensed in South Carolina, Georgia, and Virginia, and most of my work is in Hilton Head, Bluffton, Beaufort, and Hardeeville.
If your savings and investments tell a stronger story than your tax returns do, it's worth a conversation before you assume you don't qualify. I review files like this regularly, and shopping across 150+ wholesale lenders means I can find the program — and the underwriter — that actually understands how to put your assets to work.