Federal ability-to-repay rules let a lender weigh your income or your assets, verified with third-party records (12 CFR 1026.43(c)(2)(i) and (c)(4)).
The agency route. These are each agency's rules, not Align's terms.
- Fannie Mae counts 401(k), IRA, SEP and Keogh accounts you can withdraw in full, plus severance or lump-sum retirement money. It subtracts any withdrawal penalty and the funds for the down payment, closing costs and required reserves, then divides by the loan's amortization term in months. It applies to purchases and limited cash-out refinances of principal residences and second homes, with a loan-to-value limit and other conditions in the rule (B3-3.4-06).
- Freddie Mac counts retirement assets, lump-sum distributions, business sale proceeds, and bank and investment accounts, less the cash to close, gift and borrowed funds and pledged assets, spread over a set number of months, with property, loan-to-value and account conditions in the rule (Section 5307.1).
- Freddie Mac is changing this rule. Bulletin 2026-10 revises the formula and conditions for loans settling from February 3, 2027, and lenders may adopt it sooner, so the lender applies the version in force for your loan.
- FHA does not turn balances into income. It counts IRA or 401(k) distributions you already receive, if likely to continue three years, and interest and dividends averaged over two years (HUD Handbook 4000.1, II.A.4.c.xii(H) and (J)).
The non-QM route. Asset depletion programs set their own math: which accounts count, how much of each balance they credit, and the divisor. Terms vary by lender.
| Agency route | Non-QM asset depletion |
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| Income counted | Eligible balances, less cash to close, divided by a number of months the agency sets | Eligible balances divided by a number of months the lender sets, sometimes crediting only part of a balance |
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| Documents | Statements, proof of full access, Form 1099-R for lump sums | Statements and proof of ownership; varies by lender |
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| Typical tradeoffs | Purchase or limited cash-out only; loan-to-value caps | Can be priced above agency loans and can need more cash down; more room on property and loan purpose |
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