The Quick Read: It depends on the lower of two limits: the equity limit, set by the cash-out leverage ceiling on the appraised value minus your payoff, and the income limit, set by what your documented deposits can support after an expense ratio, through select wholesale programs, subject to full underwriting. Big equity does not raise the income number. A pending sale can also change how a lender reads your deposits.
- On a primary residence with a loan up to $1,500,000, the best cash-out ceiling is 80% of appraised value, and it needs a 680 score at the bottom band and 700 in the next.
- Cash to you equals the new loan minus your payoff, closing costs and any prepayment penalty on the old loan.
- Business funds, gifts, unvested stock and cryptocurrency never count as qualifying assets.
- Sale proceeds you have not yet received cannot be counted as income or assets.
- Above $4,000,000, every figure is reviewed case by case before submission.
Most founders ask the wrong question first. They ask how much of their equity a loan will release. The better question is which limit binds first, and whether the sale makes that limit tighter or looser.
Key Terms Defined
Cash-out refinance: a new, larger mortgage that pays off the old one and hands you the difference in cash.
LTV (loan-to-value): the loan balance divided by the appraised value of the property.
Expense ratio: the share of business-account deposits that a lender treats as operating costs rather than income.
Deposit averaging: adding up eligible deposits over the statement period and dividing by the number of months.
Seasoning: how long you have owned the property or held the current loan before a lender will refinance it.
Prepayment penalty: a fee some loans charge if you pay them off early.
Liquid assets: funds you can access and verify now, such as brokerage and personal bank balances, as opposed to promised future payments.
How Much Equity a Founder Can Cash Out: The Two-Limit Formula
Equity sets one ceiling, and income sets the other. The loan size is the smaller of the two, and the equity you leave above the ceiling simply stays in the house.
Start with the equity limit. The formula is plain: the cash-out leverage ceiling times the appraised value, minus your payoff, minus costs. Cash-out ceilings step down as the loan gets bigger. On a primary residence, through select wholesale programs, the best cash-out cells run like this:
- Loans from $300,000 to $1,500,000: 80% of value.
- Loans from $1,500,000 to $2,000,000: 75%.
- Loans from $2,000,000 to $3,000,000: 70%.
- Loans from $3,000,000 to $4,000,000: 65%.
Above $4,000,000, the bank portfolio program takes over. It shows 60% on a cash-out for loans from $4,000,000 to $5,000,000 and 55% from $5,000,000 to $10,000,000, and every file is reviewed case by case. Each band’s top cell needs a stronger score as the loan grows. That means 700 or better from $1,000,000, 720 from $1,500,000, and 760 in the $3,500,000 to $4,000,000 band. A lower score takes a lower cell inside the same band.
These bands are loan amounts, not purchase prices. Work out your likely loan first, then read the band for that loan.
Second homes and investment property use their own ladders. On a second home, the cash-out ceiling is 75% for loans from $300,000 to $2,000,000. On an investment property held for business purposes, it is 75% to $2,000,000, then 70% from $2,000,000 to $2,500,000 and 60% from $2,500,000 to $3,000,000. Never read one occupancy off another occupancy’s ladder.
One program rule matters for founders with big balances. On the portfolio non-QM program, proceeds are unlimited at or below 60% LTV and capped at $1,500,000 in cash to you above 60%. The bank portfolio program, which carries twelve-month-statement files to $30,000,000, publishes no such cap. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Now the income limit. The lender takes 12 or 24 months of consecutive statements and adds up eligible deposits. It applies an expense ratio to business-account deposits, then divides by the statement months. The new housing payment plus your other debts must fit within a debt-to-income ratio of up to 50%. If the payment test fails, the loan shrinks until it passes, no matter how much equity you hold.
Worked Example: When Equity Binds and When Income Binds
Run the numbers on a primary residence with a modeled appraised value of 100 units, a payoff of 50 units, and a cash-out ceiling of 80%. These are illustrative assumptions, not market data, and they ignore costs to keep the logic visible.
The equity limit allows a loan of 80 units. Subtract the 50-unit payoff, and the most you could receive is 30 units. If the appraisal comes in 10% lower, at 90 units, the loan ceiling falls to 72 units. Cash to you drops to 22 units. A 10% value miss cut your proceeds by roughly 27%, because the payoff never moves.
Now add the income test. Say your deposits support a loan only up to 65 units. The income limit binds, your cash falls to 15 units, and 15 units of available equity sit untouched. That is the founder trap in one picture. Strong equity looks like strong borrowing power, and deposits decide otherwise.
Check which limit is likely to bind before you order an appraisal. If your deposits are strong but the house is lightly equitized, equity binds. If you have large equity and a modest, lumpy deposit history, income binds.
What Counts as Income for a Founder?
Business-account deposits count after an expense ratio. Fixed ratios on the programs in the network are 20% for a service business with no employees, 40% for one to five employees, and 50% for six or more employees or any product business. An accountant-provided ratio is also accepted, and a profit-and-loss method is available on select programs. Scotsman Guide describes the same general structure, with 12 to 24 months of statements and an expense factor, and uses 50% as an illustration rather than a rule, in its overview of non-QM lending.
Business statements require at least 25% ownership. Transfers from your own business into your personal account count at 100%, which helps founders who pay themselves through distributions. Underwriters remove transfers between your own accounts, loan proceeds, refunds and one-time items before they average anything. Statements must be consecutive, and a transaction history never substitutes for them.
Private company equity does not count as income. It does not count as an asset either, until it becomes liquid. Unvested stock and unexercised options are out entirely.
A short statement history does not end the conversation. Some programs weigh liquid assets and credit alongside a thinner history. The asset paths below exist for exactly this situation.
Why Timing Matters: Before the Sale Versus After
If the sale is the company, timing is the whole game. Lenders look at whether the deposit stream will continue. A business that is about to be sold is a weak income source, because the deposits may stop at closing. The proceeds will arrive after your cash-out closes, and money not yet received cannot be counted.
| Stage | What the lender reads | Likely path |
|---|---|---|
| Before the sale | 12-24 months of deposits | Bank statement cash-out |
| At closing | Deposits stop; funds pending | Wait, or use assets already liquid |
| After the sale | Liquid personal assets | Asset allowance or assets-only |
Applying before the sale works best when your deposit history is long, steady and documented, and the buyer is not about to replace you as the income source. Applying after works best when the sale will leave you with large liquid balances and little ongoing income. Either way, tell your broker about the sale at the start. A surprise in the statements costs more than the disclosure.
If the sale is the property, the answer changes. Cashing out shortly before you sell rarely pays. You carry new closing costs on a loan you will unwind within a year, and any unexpired prepayment penalty on the old loan eats into proceeds. A new loan also starts a new prepayment clock. If you do not need the cash before the sale closes, skip the refinance.
How the Sale Itself Is Treated
A sale usually pays in pieces, and the pieces are treated differently.
| Component | Typical treatment |
|---|---|
| Cash at close, once received | Liquid asset in your personal account |
| Escrow holdback | Not counted until released to you |
| Earn-out | Not counted until paid |
| Rollover equity | Illiquid; does not count |
| Consulting fees | Deposits count only if ongoing and documented |
After the funds land in your own account, the picture changes. Two asset paths open up, both for primary and second homes only.
The asset allowance path turns liquid assets into qualifying income by dividing them by 36, 60 or 84 months. The divisor is 36 when the file’s debt-to-income before the asset income is at or below 60%, and 60 months when that ratio is above 60%. Use 84 months when the asset income stands alone or the loan is above $3,500,000. The qualifying ratio with the asset income counted must still fit within 50%.
The assets-only path needs no debt-to-income test. It requires U.S. liquid assets equal to the loan amount plus closing costs, plus sixty months of any net loss on other residential property. Retirement accounts count at 70%, or 80% at age 59 and a half or older. Business funds, gifts and most trusts do not count, with a revocable living trust the exception.
Document the source of every large deposit. A funds-flow statement from the sale, plus the personal account statements showing the wire, tells the underwriter where the money came from.
Bank Statements, Asset Paths or DSCR?
The right lane depends on what you can prove and what the property is.
| Path | What it reads | Fits when |
|---|---|---|
| Bank statements | Your deposits | Strong history, primary or second home |
| Asset allowance or assets-only | Liquid assets | Post-sale cash, thin income |
| DSCR | Property rent | Rental property, business purpose |
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The business-purpose carve-out is defined in federal rules for loans outside RESPA. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. A larger cash-out balance tightens coverage, which can sink a DSCR file on a property with thin rent. Select lenders in the network will review sub-1.00 coverage, but leverage and terms adjust. A founder with thin rent but strong deposits may fit only the bank-statement lane on that rental, and a founder with strong rent may prefer the DSCR lane to keep personal income out of the review. For the full picture, see Lendmire’s complete DSCR loans guide.
For owner-occupied homes, the lender must also verify the income or assets it relies on with third-party records, and home equity cannot be the repayment source. That is the core of the federal ability-to-repay rule at CFPB’s Regulation Z page. Non-QM loans carry more flexibility in how borrowers qualify, but ability to repay still applies. Market share shows how mainstream these paths have become. HousingWire reports that non-QM topped 11% of lock volume in one recent month, with bank-statement loans near 30% of non-QM production, in its non-QM fit analysis.
Reserves, Credit and Size Overlays
Reserves run 3 months of housing payment on smaller loans, 6 months on mid-sized loans, and 9 months on the largest loans. Each additional financed property adds 2 months, to a 12-month maximum, and first-time investors need 12 months. Above $3,500,000 on a primary residence, and $3,000,000 on a second home or investment property, cash-out proceeds cannot satisfy reserves. Those larger loans carry a 700 credit floor, a 0x30x24 housing history and 48-month seasoning on any credit event.
The credit floor is 660 on the portfolio program up to the super-jumbo line and 700 above it. The bank portfolio program keeps its own 680 floor at every size. Remember that a band’s credit figure is what the top leverage cell needs, not the floor.
Founders who want the deeper size-by-size mechanics can read Lendmire’s piece on how much a super jumbo DSCR cash-out releases for a founder after a sale. The related article on equity requirements for super jumbo cash-out refinances on bank statements covers the leverage side in more depth.
Across the wholesale network, the most common surprise is not the leverage ceiling. It is the deposit review. Underwriters examine every active account, and a file that submits only one account can understate income. A file with business and personal accounts that both show regular activity usually reads cleaner than one with a single oversized account.
When Not to Do This
Skip the cash-out if any of these apply.
- You will sell the property within a year, and the closing costs and any prepayment penalty will outweigh the benefit.
- Your deposits are about to end and you have no liquid assets to fall back on.
- You are counting on sale proceeds, earn-outs or rollover equity to carry the file.
- You need the cash to cover reserves above the size line where proceeds cannot count.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can I use my pending company sale price as collateral or income?
No. A sale price is not collateral on your home, and proceeds you have not received are neither income nor verifiable assets. Once the funds land in your personal account, they become liquid assets and can support the asset allowance or assets-only path, subject to lender guidelines.
Does a bigger equity cushion mean a bigger cash-out?
Not by itself. The loan is the lesser of the leverage ceiling and what your deposits support after the expense ratio. Equity above the ceiling stays in the property, and a strong income file is what lets you reach the ceiling.
Can I apply with less than 12 months of statements?
Some programs weigh liquid assets and credit alongside a thinner history, but the standard bank-statement path uses 12 or 24 consecutive months. If your company is young, the asset allowance or assets-only path may fit better, subject to full underwriting.
Do transfers from my company into my personal account count?
Yes, in full. Transfers from your own business into your personal account count at 100%, while transfers between your own accounts, loan proceeds and refunds are removed before averaging. Business-account statements require at least 25% ownership.
Is there a cap on how much cash I can take out?
On the portfolio non-QM program, proceeds are unlimited at or below 60% LTV and capped at $1,500,000 above 60%. The bank portfolio program publishes no cap. Above $4,000,000, every file is reviewed case by case before submission. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage and your goals. Consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Lendmire is a broker, not the lender, and nothing here is a commitment to lend.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide: Rev Up the Engine for Non-QM Lending
3. CFPB Regulation Z § 1026.43
4. HousingWire: Non-QM Fit, Not Fallout
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Finance an Oceanfront Home With Bank Statements · How to Finance a Second Home With Bank Statements · How Entrepreneurs Qualify for a Jumbo Mortgage With Bank Statements
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.