Freddie Mac Accumulated Assets as Qualifying Income: A Compliance Guide for Underwriters

Freddie Mac's Bulletin 2026-10 introduces significant changes to how lenders can use accumulated assets as qualifying income. These updates remove previous restrictions that limited asset-based income qualification while adding new documentation standards that require careful attention from underwriters and compliance teams.

The changes become mandatory for mortgages with settlement dates on or after February 3, 2027, though lenders can implement them immediately. This gives compliance teams time to update policies, train staff, and adjust underwriting workflows before the deadline.

What Changed: Key Updates to Accumulated Asset Rules

Bulletin 2026-10 updates Guide Section 5307.1 with several borrower-friendly changes that align Freddie Mac's requirements with broader industry standards.

LTV Ratio Restrictions Removed

The 80% maximum LTV, TLTV, and HTLTV ratio restriction has been eliminated. Previously, borrowers could only use accumulated assets as qualifying income if their loan-to-value ratios stayed at or below 80%. This effectively asset-based income strategies to borrowers with substantial down payments or significant equity.

Removing this cap means lenders can now qualify borrowers using accumulated assets regardless of LTV ratio, opening this option to borrowers with smaller down payments who may have accumulated substantial savings but limited traditional income.

Division Factor Reduced from 240 to 180

Freddie Mac has reduced the division factor used to calculate qualifying monthly income from 240 months to 180 months. This change directly increases the amount of income that can be derived from the same asset pool.

For example, $100,000 in qualifying assets:

• Previously: $100,000 ÷ 240 = $417/month in qualifying income
• Now: $100,000 ÷ 180 = $556/month in qualifying income

This 33% increase in calculated income can meaningfully affect debt-to-income ratios and expand qualifying options for asset-rich borrowers.

Age Restrictions Eliminated

Freddie Mac has removed the borrower age restriction for depository accounts and securities. Previously, lenders had to consider the borrower's age when evaluating these assets, which could limit eligibility for younger borrowers with substantial savings.

This change levels the playing field—accumulated assets qualify based on their documented value and stability, not on the borrower's life stage or proximity to retirement.

Clarified Requirements by Asset Type

The Guide now separates requirements for depository accounts and securities into distinct sections, making it easier for underwriters to find the specific documentation standards that apply to each asset type. This structural improvement reduces lookup time and the risk of applying incorrect standards.

New Documentation and Seasoning Requirements

While the changes expand eligibility, Bulletin 2026-10 introduces new requirements that demand careful documentation practices.

12-Month Seasoning Requirement

Depository accounts and securities must now be seasoned for 12 months prior to the Note Date unless the account was funded from eligible sources. This represents a significant compliance requirement.

Lenders must obtain and analyze statement history covering the full 12-month period to verify seasoning. For accounts funded from eligible sources—such as asset sales, inheritance, or other documented origins—the seasoning requirement may be satisfied through alternative documentation.

Balance Variation Rules for Depository Accounts

For depository accounts where the balance has changed between the current statement and the statement from 12 months prior, lenders must apply specific rules based on the direction and magnitude of the change.

Decreases exceeding 20%: If the account balance decreased by more than 20% over the 12-month period, the depository account is not eligible to qualify the borrower—unless the decrease resulted from transferring funds to securities or retirement accounts. Lenders must document these transfers to preserve eligibility.

Increases exceeding 20%: If the account balance increased by more than 20% over the 12-month period, the eligible documented asset amount is limited to 120% of the total value from 12 months prior to the current statement. This prevents borrowers from artificially inflating account balances just before applying.

For example, if an account held $50,000 twelve months ago and now holds $80,000 (a 60% increase), the eligible amount for income calculation would be capped at $60,000 (120% of $50,000).

Sourcing Large Deposits: Updated Timeline

Bulletin 2026-10 also updates requirements for sourcing "large deposits" as defined in Guide Section 5501.1(f)(ii). The sourcing requirement now applies only when all three conditions are met:

• The deposit occurred no more than 60 calendar days preceding the Application Received Date
• The deposit was made on or prior to the Note Date
• The deposit is reflected on documentation in the Mortgage file

This clarified timeline helps lenders focus their sourcing efforts on deposits that fall within the relevant window, reducing unnecessary documentation burden for older deposits.

For asset accounts from outside the United States and its territories, when documentation reflects a large deposit, the standard large deposit sourcing requirements apply. This explicit guidance ensures consistent treatment of foreign accounts.

Step-by-Step Underwriting Process

Here's how underwriters should approach accumulated asset income under the updated Guide.

Step 1: Identify Asset Types and Ownership

Determine whether the borrower holds assets in depository accounts (checking, savings, money market) or securities (stocks, bonds, investment accounts). Verify account ownership matches the borrower's name on the loan application.

Step 2: Collect 12-Month Statement History

Obtain statements covering the full 12-month period prior to the Note Date. Monthly statements work best for depository accounts; quarterly statements are acceptable for securities. If the account lacks 12 months of seasoning, determine whether the initial funding came from an eligible source.

Step 3: Analyze Balance Variations

Calculate the percentage change in account balance over the 12-month period:

• For decreases over 20%, determine if the funds were transferred to securities or retirement accounts
• For increases over 20%, cap the eligible amount at 120% of the 12-month-prior value

Document your analysis and calculations clearly in the file.

Step 4: Calculate Qualifying Income

Apply the 180-month division factor to determine the monthly qualifying income amount. Compare this to previous calculations to understand the impact on DTI ratios.

Step 5: Verify No LTV Constraints Apply

Confirm that the loan meets all other eligibility requirements, but note that the previous 80% LTV cap no longer restricts accumulated asset income qualification.

Common Underwriting Pitfalls to Avoid

Several potential errors can derail compliance with Bulletin 2026-10 requirements.

Missing the Balance Variation Analysis

Failing to analyze and document the 20% balance variation thresholds is a significant compliance risk. Underwriters might simply take the current balance without comparing it to the 12-month-prior statement. This oversight could result in ineligible assets being used for qualification or proper caps not being applied.

Build this comparison into your standard underwriting checklist for asset-based income.

Incomplete Seasoning Documentation

Accepting less than 12 months of statement history without verifying eligible funding sources creates documentation gaps. If an account opened 8 months ago, you need evidence of where the initial funds came from—otherwise, the seasoning requirement isn't satisfied.

Six months of statements plus a documented inheritance deposit satisfies seasoning; six months of statements with unexplained prior balances does not.

Applying Old LTV Restrictions

Underwriters familiar with the previous 80% LTV cap might incorrectly reject loans that exceed this threshold. While deeply ingrained from years of practice, this restriction no longer exists. Training and updated job aids are essential.

Overlooking Transfer Documentation for Balance Decreases

When a depository account balance dropped by more than 20% but funds were transferred to securities or retirement accounts, you need documentary evidence of the transfer—not just the borrower's statement. Obtain transfer records, account statements showing the receiving deposits, or other third-party verification.

Incorrect Division Factor Application

Using the old 240-month division factor instead of 180 understates qualifying income and may cause unnecessary denials. Update all calculation tools, spreadsheets, and automated systems before processing loans under the new requirements.

Implementation Timeline and Preparation

The mandatory effective date for mortgages with settlement dates on or after February 3, 2027, provides time for preparation, but early adoption is permitted. Consider this timeline for implementation:

Training and policy updates: Complete internal training and policy revisions before year-end 2026 to allow time for Questions and clarification.

System updates: Modify automated calculation tools, underwriting checklists, and quality control scripts by early January 2027.

Monitoring: Since early implementation is allowed, consider processing a small volume of loans under the new rules to test your procedures and identify gaps before the mandatory deadline.

For more on Freddie Mac's broader 2026 regulatory changes, see our earlier coverage of Freddie Mac's 2026 Guide updates.

Key Takeaways

• LTV ratio restriction removed: Accumulated assets can now qualify borrowers regardless of LTV, TLTV, or HTLTV ratios
• Division factor reduced to 180 months: This change increases qualifying income by approximately 33% for the same asset amount
• 12-month seasoning required: Depository accounts and securities must be seasoned for 12 months unless funded from eligible sources
• Balance variation rules apply: Account increases over 20% are capped; decreases over 20% make accounts ineligible unless funds transferred to securities or retirement accounts
• Age restrictions eliminated: Borrower age is no longer a factor for qualifying depository accounts and securities
• Large deposit timeframe clarified: Sourcing applies only to deposits within 60 days of the application received date