There are three separate ways a retired buyer's income can be calculated, and they produce very different numbers. Most retirees get quoted the weakest one, because the lender ran the obvious calculation and stopped there.
In Legend Trail, where the buyer pool skews toward people living on distributions and assets rather than a paycheck, running all three is the difference between the home you want and the one the first quote allowed.
The three calculations
1. Fixed income, grossed up. Social Security, pension and certain annuity income that is not taxed, or only partly taxed, can commonly be grossed up for qualifying purposes, because a lender is comparing your spending power against a payment made with after-tax dollars. Gross-up percentages vary by program and by how much of the income is actually non-taxable, so confirm rather than assume. The effect is real and it is routinely left on the table.
Document it with award letters, recent statements showing receipt, and tax documents showing treatment.
2. Retirement distribution income. Withdrawals from IRA, 401k or similar accounts can count, subject to two conditions:
- History. A documented pattern of receipt, measured rather than assumed from an intention to start.
- Continuance. Evidence the account can sustain the withdrawals forward, commonly three years or more. The lender weighs the balance against the withdrawal rate.
This is the one that surprises people. Having a large retirement account does not produce distribution income. Taking documented, regular distributions does. If you have not begun distributions and are planning a purchase, that conversation with your lender and your advisor needs to happen well before you write, because starting them changes what you qualify for and carries tax consequences worth planning.
3. Asset depletion. The lender converts verified liquid assets into a monthly figure over a defined period and qualifies you on that, ignoring your actual income. For a retiree with substantial assets and modest reported income this frequently produces the largest number of the three. Retirement accounts are typically discounted, often more heavily than taxable brokerage, and pledged assets generally do not count.
Run all three. A lender who quotes you on Social Security alone has done a quarter of the work.
What Legend Trail adds
Legend Trail is a gated golf community in far north Scottsdale, well positioned for a buyer who wants north Scottsdale living at a price point below the super jumbo estate communities further up.
Price band matters here. Legend Trail carries product on both sides of the conforming loan limit, and which side you land on changes your reserve requirement, your ratio tolerance and your documentation depth. For a retiree that reserve question is sharper than usual, because assets are often the whole case. See Jumbo Loans in Scottsdale.
The club obligation, and why it lands harder on an asset-based file. If membership is mandatory at your address, the dues and minimums count against whatever qualifying figure your structure produces. An initiation deposit is cash out and generally does not count toward reserves.
If you are qualifying by asset depletion, that deposit reduces the very balance your qualifying income is derived from. It costs you twice. Decide the club and the loan together, not one after the other. See How a Scottsdale Golf Club Membership Affects Your Mortgage Approval.
Fixed income meets a stack that is not fixed. Association dues and any mandatory club dues rise over time independently of your mortgage. A fixed rate payment is stable; the obligations around it are not. Ask for the association's assessment history and reserve study, because a thin reserve today is a special assessment tomorrow, and on a fixed income that lands hard. See HOA Dues, Club Dues and Assessments.
Occupancy. Many north Scottsdale buyers at this price point are seasonal. A second home rather than a primary residence changes your down payment and pricing, and it means qualifying while carrying both housing payments. See Second Home or Investment Property in Scottsdale.
Far north property questions. Well and septic appear in parts of this area and carry their own inspections on some programs. Ask about the specific parcel.
A note on age
A lender may not decline you or reduce your terms because of your age. That is the law, and it is worth saying plainly because older buyers are sometimes made to feel otherwise.
What a lender may do is require documentation that your income will continue for a defined period. That is a continuance test applied to the income source, not to you, and it applies identically to a thirty-five year old with variable income. If anyone frames it as a question about your age, you are talking to the wrong lender.
When none of the three clears
No-ratio. No debt-to-income test at all. Credit, assets, reserves and the property carry the file. Often the clean answer for a retiree with a strong balance sheet and complicated income.
A larger down payment, weighed against the reserve requirement, because spending reserves to fix a ratio breaks the other test, and on a depletion file it also shrinks your qualifying income.
Non-QM and no-ratio price differently than agency financing because the risk profile differs. If a conventional or jumbo loan works on any of the three calculations, take it.
Before you write in Legend Trail
- Bring all three income pictures: award letters and statements, distribution history and balances, and full asset statements.
- If you have not started distributions, talk to your lender and your advisor first.
- Ask in writing whether club membership is mandatory at the address, and get the current membership plan.
- Get the association budget, reserve study and assessment history, not just the dues figure.
- Decide occupancy honestly and size the down payment to it.
- Ask about well and septic on the parcel.
- Get fully underwritten, not pre-qualified. A pre-qualification usually runs only the simplest of the three calculations.
Why bring this file to us
- We run all three calculations and use whichever supports the house. That single habit changes retiree approvals more than anything else we do.
- We model the club deposit against your reserves and your depletion calculation before you write the check.
- Broker model. Gross-up treatment, continuance rules and depletion divisors vary meaningfully between investors.
- The full toolkit, agency and jumbo through asset depletion and no-ratio non-QM.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me your award letters, distribution history and asset statements before you write in Legend Trail, and I will run all three and tell you which buys the most house.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Gross-up percentages, distribution continuance requirements and asset depletion calculations vary by investor and change over time. Club membership structures and association obligations vary by community; confirm current terms with the club and the association. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, and other qualifying factors. Not all applicants will qualify. Non-QM and no-ratio financing carries different pricing and terms than agency financing. Consult your tax advisor before beginning or changing retirement account distributions.
