The Quick Read: After a company sale, you usually qualify on the money you hold, not the income you used to earn. Asset-based mortgages count your documented assets in place of traditional personal-income documentation. The paper trail on those assets is still strict.
- Two paths exist. On the asset qualifier path, your eligible assets must cover the entire loan. On the asset depletion path, your assets become monthly income.
- Credit percentages apply. Brokerage, savings, money market and CDs count at 100% on the qualifier path. Other assets count at a discount on the depletion path.
- Statements are required. You skip the income documents, not the proof of your assets. Seasoning and sourcing rules apply to the sale proceeds.
- Rentals follow a different road. An investment property can run on a DSCR loan, which looks at the property’s rent instead of your personal income.
- Everything is subject to underwriting. Figures here are program ceilings and floors, not offers.
Selling a company creates an odd problem. You have more cash than you have ever had, and the paperwork says your income just stopped. Your last two years of traditional personal-income documentation shows a business you no longer own. A conventional file built on those returns reads you as either riskier than you are or no longer employed.
Why Does Selling Your Company Break the Usual Mortgage Math?
A full-documentation loan from a big bank or large retail lender measures recent, repeatable income. A founder’s income is usually owner distributions, K-1 earnings or a salary the company paid. After the sale, those streams end. The returns still show them, but they describe the past.
The balance sheet tells the opposite story. The proceeds sit in an account, often at a level that dwarfs the loan you want. Agency-style full-documentation loans generally want traditional personal-income documentation to support self-employed income, so a recent seller can look weaker on paper than a salaried employee with a fraction of the net worth.
Asset-based mortgages exist for this mismatch. Across the wholesale network Lendmire places files with, they serve a cash-heavy, income-light borrower: sellers of a business, retirees, inheritance or settlement recipients, early-retired professionals and households living on a portfolio. Lendmire is a broker. It arranges these loans through select lenders, and the lender underwrites each file individually.
What Does No Tax Returns Actually Mean Here?
It means the underwriter does not build your qualification from tax-return income. It does not mean nothing gets verified. Three different situations hide behind the same phrase, and they call for different answers.
| Situation | What it means | What to do |
|---|---|---|
| Income stopped | Returns show old business income | Qualify on assets |
| Sale-year return not filed | The sale year has no return yet | Assets cover the gap |
| Unfiled returns | Returns were never filed | Different problem, not covered here |
The first two are the company-seller story. The third is a compliance and tax-debt issue, and an asset-based mortgage does not solve it.
Notice what the lender still checks: your credit, your housing payment history, your account statements, the source of the funds and the property. Asset-based qualification is an income-documentation shortcut that replaces traditional income documentation with a deeper look at your balances. It is never a no-questions loan.
Which Path Fits a Company Seller?
Two paths exist, and a borrower is reviewed on one at a time. Pick by asking a single question: do your assets cover the whole loan, or do you need them to behave like a paycheck?
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How assets are used | Must equal or exceed the whole loan | Converted to monthly income |
| Income documented | None | Derived income, tested against DTI |
| Max leverage, purchase | Up to 80% LTV | Up to 80% (home); 65% (investment) |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
Leverage deserves labels. On the qualifier path, you can borrow up to 80% loan-to-value on a purchase and up to 75% on a refinance of a principal residence or second home. Whether cash-out is allowed on that path is the lender’s call and is not published.
On the depletion path, a principal residence or second home runs up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. An investment property on that path runs up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. All of it is subject to underwriting.
The qualifier path is the cleaner fit when your proceeds are large compared with the mortgage. Say you are buying a home with moderate leverage and your liquid balances exceed the loan amount. You document the assets and skip income entirely.
The depletion path fits when you want a bigger loan than your assets alone would cover, or when the loan size sits in the range that path serves. It also fits if the lender wants to see derived income against your other debts.
What Counts as an Asset After a Sale?
Assets count at a percentage of their balance, and the percentage depends on the path. Mixing the two tables is a common error founders make when they self-assess.
On the asset qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. A 401(k) or IRA counts at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
On the asset depletion path, the credit is lower for riskier holdings:
- Cash accounts and CDs count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Several things do not count on the depletion path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units and funds from non-regulated financial companies. Cryptocurrency, precious metals, collectibles, pledged or borrowed funds and business accounts beyond your ownership share are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Sale structure matters as much as the account type. A signed purchase agreement is not cash.
| Sale component | Treatment | Practical move |
|---|---|---|
| Cash wired at closing | Counts once seasoned and sourced | Move to a personal account |
| Escrow holdback | Escrow accounts are ineligible | Count it after release |
| Earnout | Contingent, not an asset yet | Count it when paid |
| Seller note | Not published as eligible | Treat as outside the file |
| Rollover or restricted stock | Depends on type and vesting | Ask before assuming |
Business accounts are the other trap. Money left in the old company’s account is not your personal asset beyond your ownership share. Move your proceeds into a personal account in your own name and leave them there.
One tax sentence, since the sale will create an obligation: tax treatment varies, so keep clear records and consult a qualified professional about what you owe. Underwriters count the whole balance in the account, not what you plan to owe, so size your purchase with that obligation in mind.
How Does the Math Work on Each Path?
Both examples below are illustrative. The lender’s own calculation governs, and each file is subject to underwriting.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100% for $330,000. You hold $300,000 in a 401(k) and you are under 59½, so it counts at 90% for $270,000. You hold $200,000 in savings, which counts at 100% for $200,000. Together that is $800,000 of usable assets, which equals the loan amount. You qualify on assets alone, with no employment or income documented.
Depletion path. Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, so $1,200,000. Cash counts at 100%, so $300,000. That is $1,500,000 of usable assets. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the debt-to-income test.
Two depletion-path minimums trip up sellers who think they are comfortably over the line. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. And when asset depletion is your only income source, you need at least $250,000 in liquid assets. Asset-derived income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
What Paperwork and Sequencing Does a Seller Need?
You document the assets on both paths. A practical file for a seller usually includes:
- The sale agreement and the final settlement or closing statement.
- Wire confirmations showing the money arriving.
- Any escrow or intermediary statements.
- Statements for every account you want counted.
- Proof of how the funds moved from the sale account to the account that holds them.
Seasoning is how long money has sat in an account. Sourcing is proof of where it came from. On the qualifier path, expect 60 days of seasoning and two months of statements for each qualifying account. 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 funds are excused from that seasoning on the depletion path, but the lender still reviews the source.
Sequencing is where sellers save themselves trouble. If you are still negotiating the sale, plan the purchase around the date the money lands in your personal account, not the date you sign. Contingent money cannot support the file until you can touch it.
A short list of habits to avoid once the proceeds arrive:
- Do not shuffle funds between several new accounts.
- Do not make large transfers you cannot explain on paper.
- Do not leave the money inside the old company.
- Do not borrow against assets you plan to count.
- Do not open new credit lines before the file is reviewed.
Many founders in this position assume the hard part is the lack of income. In practice, the file usually stalls on a messy paper trail. A wire that passed through two accounts with no statements, or proceeds split between a personal and a business account, can cost a file weeks of back-and-forth that a clean folder would have avoided. Program guidelines differ here, so the strongest files document the money’s journey before the lender asks.
Buying a Rental Instead?
If the new property is a rental, the picture changes. The lender is not looking at your personal income at all. DSCR loans, covered in Lendmire’s complete DSCR loans guide, qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, reserves and the borrowing entity still get reviewed. A post-sale owner often finds this the simplest route, because the old business income never enters the file.
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 federal rule on repayment ability does not apply to credit extended primarily for a business purpose, even when a dwelling secures it.
A personal residence is the opposite case. The lender must make a good-faith determination that you can repay, and the official interpretations say that when repayment comes from asset income, the creditor considers assets such as funds held at financial institutions. That is why asset-based qualification exists for home buyers.
The line between the two is purpose, not paperwork. Putting a personal home inside an LLC does not turn it into a rental. For a rental you will hold in an entity, treatment is subject to lender program eligibility.
Other self-employed borrowers face related questions. Lendmire’s piece on whether a 1099 contractor can buy a home without filing tax returns covers a different income profile than a company seller.
Where Do the Rules Break?
The general rule is simple: assets replace income. These cases bend it.
Credit. The qualifier path sets a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700. Housing history is typically 0x30x12, with a single 30-day late in the last twelve months considered case by case. A housing event needs four years of seasoning on the depletion path, and multiple bankruptcies are not eligible. Nothing here removes the credit check.
Investment property. Only the depletion path covers investment property in this consumer-purpose program, at 65% on a purchase. Many sellers use DSCR for rentals instead because the leverage and documentation logic differ.
Co-owners and spouses. If you owned the company with partners, only your share of proceeds counts. A spouse who is a co-borrower can add accounts, but each account still needs its own statements.
Stock you received in the sale. Private stock counts at 75% on the depletion path. Non-vested restricted stock units and stock options are not eligible. Whether rollover equity helps depends on what it is and whether it vests.
Retirement accounts. A founder under 59½ gets 90% credit on the qualifier path but only 70% on the depletion path. The same balance can carry very different weight.
Large purchases. The qualifier path reaches $4,000,000. The depletion path tops out at $3,500,000. Neither goes above that.
State availability. Lendmire’s consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. If your home is elsewhere, the asset-based route may not be available through Lendmire.
Key Terms Defined
Asset qualifier path: A way to qualify where eligible assets must equal or exceed the whole loan, with no income documented.
Asset depletion path: A way to qualify where usable assets divided by 60 months become monthly qualifying income.
Seasoning: How long money has sat in an account before the lender counts it.
Sourcing: Proof of where the money came from, such as a settlement statement and wire confirmation.
Haircut: The share of an asset’s value the lender does not count, such as 20% off securities.
Debt-to-income (DTI): Your monthly debts divided by your monthly qualifying income.
DSCR loan: An investment-property loan that qualifies primarily on rent covering the payment, subject to lender guidelines.
Frequently Asked Questions
Can I use the money while it is still in the old company’s account?
Generally not. Business accounts do not count beyond your ownership share, and the lender wants proceeds in a personal account in your name. Move the funds, keep the statements and leave the money alone until the file is reviewed.
Does an earnout or seller note count as an asset?
Not until you can access it. Escrow accounts are ineligible on the depletion path, and a seller note is not published as an eligible asset on either path. Contingent amounts become usable once they are paid into your account and seasoned or sourced.
Which path is better for a company seller?
It depends on the size of the loan against your assets. The qualifier path suits sellers whose liquid assets cover the loan outright, and it documents no income. The depletion path suits those who need assets converted to income, with 60-month math and a DTI test. Both are subject to underwriting.
Can I buy the home through an LLC?
A personal residence cannot be turned into a business-purpose loan by changing the title. Rentals held in an entity may be eligible, subject to lender program eligibility. Whether the loan is for a business or personal purpose is based on how the property is used.
Can I buy a rental without any personal income documented?
A DSCR loan underwrites to the property. It qualifies primarily on rental income covering the payment, subject to lender guidelines, and credit and reserves are still reviewed. Select lenders in the network offer programs below 1.00 coverage as well, although leverage and terms adjust.
Next Steps
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. If the home you want is a vacation or second residence rather than a rental, Lendmire’s guide How to Buy a Second Home Without Tax Returns shows how the same asset-first thinking applies when occupancy changes the program.
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
1. CFPB Regulation Z § 1026.43
2. Regulation Z Official Interpretations
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does an Asset-Based Mortgage Require Tax Returns or a 4506-C? · How to Buy Before You Sell Using an Asset Qualifier Mortgage · Can You Cash Out a Georgia Home on an Asset Depletion Refinance?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.