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Jason L. Esposito
Mortgage Loan Officer · 30+ Years
NMLS# 308764 · Licensed in Florida
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The Problem Most Retirees Face
Many retirees don't realize asset-depletion income may help them qualify.
The truth is, retirees often have multiple income streams that qualify — and many don't even know it. Social Security, pensions, 401(k) and IRA distributions, investment income, rental income, and even large retirement account balances can all be used to qualify. You just need a loan officer who knows how to document it.
How Retirement Income Is Calculated
Here are the income types we can use to qualify you for a Florida mortgage.
Contact me to review how your Social Security income is documented for mortgage qualification. Consult a tax advisor about any tax implications.
Example: $2,000/month SS = $2,500/month qualifying income. Both spouses' benefits count.
Pension and annuity payments count fully as qualifying income. Documentation is straightforward — your award letter or benefit statement is all we need.
Two years of receipt typically required, or documented continuation of payments.
If you are already taking regular monthly distributions from your retirement accounts, those payments count as qualifying income under the 36-Month Rule.
The account balance must sustain the distribution for 36 months after closing.
Have a large IRA or 401(k) but aren't taking distributions yet? We can convert your total eligible assets into qualifying income — no withdrawals required.
Fannie Mae: divide by 360 months. Freddie Mac: divide by 240 months. Non-QM: as few as 60 months.
Brokerage account dividends, interest income, and capital gains distributions can qualify — typically averaged over two years from your tax returns.
Must show consistent pattern of receipt. Works well combined with other income sources.
Rental income from existing properties counts — even if the property is in another state. We use your Schedule E from your tax returns to document it.
25% vacancy factor typically applied. Positive rental income adds to your qualifying power.
Many retirees continue working part-time or consulting. That income counts too, as long as we can show a two-year history and reasonable continuation.
Self-employed retirees need 2 years of tax returns showing consistent income.
Former teachers, healthcare workers, and nonprofit employees often have 403(b) plans. These qualify the same way as 401(k) accounts under Fannie Mae guidelines.
IRS Rule of 55 may allow penalty-free access if you separated from service after age 55 — consult a tax advisor.
Asset-Depletion Income
Many retirees don't realize asset-depletion income may help them qualify.
If you have a significant balance in your IRA, 401(k), or 403(b) but haven't started taking distributions yet, Fannie Mae and Freddie Mac allow us to convert that balance into qualifying monthly income — without you ever having to touch the money.
Here's how it works: we take your eligible retirement account balance, divide it by the loan term (360 months for Fannie Mae), and that becomes your qualifying income.
If you ARE already taking distributions, lenders apply the 36-Month Rule — they verify your account balance is large enough to sustain your monthly distribution for at least 3 years after closing.
The formula: Monthly distribution × 36 = minimum required balance
Want $3,000/month in qualifying income? You need at least $108,000 in your account after closing.
This balance must remain after deducting your down payment and closing costs — an important detail many borrowers miss.
You do NOT need to be 59½ to use retirement income for qualifying. Fannie Mae has no specific age minimum.
However, if you are under 59½, the lender must confirm you have unrestricted access to the funds without penalty — or that a penalty exemption applies (IRS Rule of 55, Separation from Service, etc.).
Ask a tax advisor how early-withdrawal rules apply to your accounts; your lender will confirm what documentation is needed.
How you set up retirement distributions, including tax withholding, can affect both your taxes and how income is documented. Consult a tax advisor before changing distributions.
Common Misconceptions
"I need a W-2 job to qualify for a mortgage."
FactSocial Security, pension, 401(k) distributions, asset depletion, rental income, and investment income all qualify. Many retirees have more qualifying income than they realize.
"I'm too old to get a 30-year mortgage."
FactAge discrimination in lending is illegal. Lenders cannot deny a loan based on age. A 75-year-old can absolutely get a 30-year fixed mortgage if they qualify financially.
"My IRA doesn't count because I'm not taking distributions."
FactThe asset depletion method converts your IRA balance into qualifying income without requiring you to take a single distribution. A $500,000 IRA = $1,389/month in qualifying income under Fannie Mae.
"Every loan program has the same down payment requirement."
FactDown payment requirements vary by loan program, property, and credit — contact me to review your options.
"Florida property insurance will kill my DTI."
FactIt's a real factor — but manageable. Florida insurance costs are higher than national averages, but with the right loan structure, income documentation, and loan amount, it's entirely workable. I help you plan for it upfront.
"My Social Security is only $1,800/month — that's not enough."
FactContact me to review how your Social Security income is documented for mortgage qualification. Consult a tax advisor about any tax implications.
Frequently Asked Questions
Let's Find Out What You Qualify For
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Reviewed and updated September 2026 by Jason L. Esposito, Mortgage Loan Officer · NMLS# 308764 · Licensed in Florida
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Program rules, limits, and availability can change. Confirm current requirements before applying.