The Quick Read: On the asset depletion path, private stock typically counts at 75% of its verified balance through select programs in Lendmire’s wholesale network, subject to underwriting. That figure applies only to the depletion path, where assets become monthly qualifying income. On the asset qualifier path, which covers the loan with assets alone, private stock is not on the published list of eligible assets.
- Depletion path: private stock at 75%, securities at 80%, cash and CDs at 100%, retirement accounts at 70%.
- Qualifier path: no credit for private stock; brokerage, CDs, money market and savings count at 100%.
- Usable assets are divided by 60 months to produce qualifying income.
- Stock options and non-vested restricted stock units are not eligible on the depletion path.
- Many lenders outside this network treat private shares as zero, so confirm the program before relying on them.
Plenty of founders and early employees hold most of their net worth in shares nobody can price on a screen. The question is whether a lender will count that paper wealth. Across the wholesale network Lendmire works with, the answer depends on which path the file runs through and whether the shares are real, owned, vested and documented.
Which Path Fits Your Private Stock?
Private stock only earns credit on the asset depletion path. That path turns eligible assets into a monthly income figure, and that figure then runs through the debt-to-income test. A borrower is reviewed on one path at a time, so the two tables never blend.
The asset qualifier path works differently. Eligible assets, after their credit percentages, must equal or exceed the entire loan amount, and no employment or income is documented. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Private stock isn’t on that list.
Here is how the two paths compare for private-company holders:
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| Private stock | Not published as eligible | Counts at 75% |
| What assets do | Cover the whole loan | Become monthly income |
| Securities | Brokerage at 100% | Securities at 80% |
| Retirement | 90% under 59½, 100% after | 70% at any age |
| Statements | Two months, 60-day seasoning | 120 days old plus one within 45 days |
If your liquid balances are large, the qualifier path may be simpler and leave the private shares out of the picture. If your liquid balances are modest and the private shares are the bulk of your wealth, the depletion path is the only lane where they help.
Why Private Stock Gets Treated Differently
Lenders discount private stock because they can’t verify what it’s worth or how readily it converts to cash. A public share has a daily price and a market. A private share has a valuation that moves when the company raises money or reprices.
Transfer limits add to the problem. Per the SEC’s exempt offerings FAQ, restricted securities are not freely tradable, and Rule 144 allows resale only when conditions are met, including a holding period of six months or one year depending on the issuer. Meeting those conditions doesn’t create a buyer. Private-company transfers can also face company consent rights and rights of first refusal, as Hustle Fund’s Rule 144 guide explains.
That is why you see such a split in the market. Many general asset depletion programs simply list privately held stock as ineligible. A smaller group of programs, including select ones in Lendmire’s network, will count it at a deeper haircut than public securities. Same word, different rulebook.
No federal rule sets the number. The OCC’s Bulletin 2019-36 describes asset depletion underwriting for banks, and it sets no haircut percentages. The percentages come from each program’s own guidelines, which is why two lenders can produce different income from the same balances.
How the Calculation Works
The math is simple: apply the credit percentage to each asset class, add the results, then divide by 60 months. The output is monthly qualifying income, and that income must carry the full housing payment and other debts.
Run the standard depletion example. A borrower holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Together that’s $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then goes through the debt-to-income test. This is illustrative only, and the lender’s own calculation governs.
Now swap in private stock. The 75% credit means every dollar of verified private shares adds less than a dollar of cash or a public-securities dollar would. The haircut also shrinks the total faster than a founder’s headline valuation suggests.
Two minimums apply on this path. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is the only income source. A borrower holding mostly private shares can clear the 75% credit and still miss the liquidity floor. That is the trap.
What Has to Be True for the Shares to Count
The shares need to be owned, vested, valued and documented. Statements are the core document on both paths, since “no income documentation” never means “no documentation.”
On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning. For private stock, a lender’s review typically wants evidence that supports ownership and a defensible value, such as a shareholder statement or a recent independent valuation. What each lender accepts varies, so ask before assuming.
Not everything tied to private-company equity is eligible. Stock options and non-vested restricted stock units are not eligible on the depletion path. Business accounts beyond your ownership share generally don’t count either.
Restricted does not mean private, and the difference matters when a borrower calls shares unrestricted. Restricted shares can’t be sold publicly until a transfer agent removes the legend, even after the rule’s conditions are met. A borrower who assumes shares are free to sell, without checking, may be wrong.
The Plan B: Convert Before You Apply
Converting private shares into cash or public securities is the most reliable route. After a tender offer, a secondary sale or an IPO with the lockup ended, the proceeds or shares sit in a regulated account and are ordinary assets.
Once converted, the balances count at the percentages above: cash at 100%, securities at 80% on the depletion path. Cash can count at 100% on the qualifier path too, after 60 days of seasoning and two months of statements. Sale-of-business funds get a seasoning exception on the depletion path, which can help after a company sale. Lendmire’s piece How Asset Depletion Counts Property-Sale Proceeds as Income covers the same logic for real estate sales.
The tradeoff is real. Selling means giving up upside and possibly triggering a tax bill. Tax treatment varies; consult a qualified professional before deciding. If you believe the company is heading for a big exit, holding may beat converting. Leaving shares in place and qualifying at 75% could be the better call, as long as the liquidity floor still works.
Leverage, Credit and Loan Size
Leverage depends on the path and the property. These are ceilings, never offers, and all are subject to underwriting.
On the asset depletion path, a principal residence or second home may reach up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Investment property tops out at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. Loans run from $125,000 to $3,500,000.
On the asset qualifier path, a principal residence or second home may reach up to 80% on a purchase and 75% on a refinance, with loans up to $4,000,000. No reserves are required at or below 75% loan-to-value.
Credit follows the path. The qualifier path’s published floor is 600. The depletion path follows the lender’s matrix, and a first-time investor there needs 700. Housing history is 0x30x12, and a housing event needs four years of seasoning on the depletion path. Consumer mortgage lending is licensed in 16 states, and Lendmire arranges these loans as a broker through select lenders.
Where This Doesn’t Apply: DSCR Loans
Asset depletion matters only on personal-income programs. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so private stock plays no role in the coverage test.
Here’s the investor decision. If you’re buying a rental and the rent covers the debt, DSCR is usually the cleaner fit and your private stock stays out of it. If you’re buying a primary residence or second home with large paper wealth and little reportable income, asset depletion is the lane to price.
Key Terms Defined
Asset depletion: A method that converts eligible assets into monthly qualifying income by dividing usable assets by a set number of months.
Haircut: The discount applied to an asset’s balance, so only a share of it counts.
Seasoning: The length of time funds must sit in an account before they count.
Restricted securities: Shares that aren’t freely tradable because of how they were issued or held.
Non-vested RSUs: Stock units you’ve been granted but haven’t yet earned the right to keep.
Common Mistakes
- Counting your last funding-round valuation as a balance. Underwriting looks at verifiable, saleable value, not a headline.
- Assuming Rule 144 makes shares liquid. It sets conditions for resale; it doesn’t supply a buyer.
- Listing options or unvested RSUs. They’re not eligible on the depletion path.
- Missing the liquidity floor because most wealth is private paper.
- Blending the two paths. Pick one and name it.
- Treating every lender the same. Haircuts differ by program.
Frequently Asked Questions
Do I have to sell my private shares to use them?
No. Asset depletion is a qualifying test, and nothing is liquidated or pledged. Shares that count do so at 75% on the depletion path, subject to underwriting. Selling is only needed if you want them to count as cash or to meet liquidity needs.
Do stock options count?
Not on the depletion path. Stock options and non-vested restricted stock units are listed as ineligible. Once exercised and vested, the resulting shares may be reviewed as stock, depending on the program and documentation.
What if my company goes public during the process?
Public shares in a brokerage account are ordinary securities, which count at 80% on the depletion path, once any lockup and legend removal are done. A change in the asset’s status mid-file can reset documentation, so tell your loan officer early.
Can I combine private stock with other assets?
Yes. On the depletion path, assets combine after each credit percentage, then the total is divided by 60. The minimum-assets and liquidity floors still apply to the total.
Does stock held in a trust or business name count?
It depends on ownership and the lender’s review. Business accounts beyond your ownership share are not published as eligible. Personally held shares with clear documentation is the straightforward case.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much of Private Company Equity Counts on a Mortgage Application? · Can You Buy a Virginia Rental Property on Asset Depletion Income? · Can Pledged or Margined Securities Count Toward an Asset Qualifier Mortgage?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.