The Quick Read: It depends on which asset-based path you use, and a documented sale is treated better than an unexplained deposit. On the asset qualifier path, most programs we place files with want 60 days of seasoning and two months of statements for each qualifying account. On the asset depletion path, statements must be at least 120 days old at application, but sale-of-business, inheritance and legal-settlement funds are excused from that seasoning, subject to underwriting.
- Asset qualifier path: 60 days of seasoning and two months of statements per account.
- Asset depletion path: statements 120 days old, plus a recent statement within 45 days.
- Business-sale funds on the depletion path: excused from that seasoning, with the source still reviewed.
- Tennessee: the program figures are the same as everywhere else.
- Assets are always documented. Only your income goes undocumented, and only on the qualifier path.
Seasoning is the length of time money has sat in your account. Lenders use it to confirm the money is really yours and was not borrowed to dress up a file. No state law sets it. Tennessee does not change the clock. It only changes where the house sits and who handles your closing.
Key Terms Defined
Seasoning: the time funds have been in your account before the lender counts them.
Sourcing: proving where a deposit came from, usually with a paper trail.
Asset qualifier path: the route where eligible assets cover the entire loan amount and no employment or income is documented.
Asset depletion path: the route where usable assets are divided by 60 months to create a qualifying monthly income.
Settlement statement: the closing paper from a sale that shows who was paid what.
Funds to close: the cash set aside for the down payment and closing costs. It cannot also count as qualifying assets.
Why Do Lenders Season Funds at All?
Lenders season funds to make sure your balance is real, owned and not borrowed. Experian describes seasoned funds as money typically in your account for at least 60 days before you apply. It adds that large recent deposits may need documentation, and that funds a lender cannot trace may not be allowed for the down payment.
Think of seasoning as the lender’s way of asking one question: whose money is this? Time answers it quietly. Paper answers it loudly. A deposit that has sat for two months needs little explanation. A deposit that landed last week needs a story, and the story needs proof.
Across our wholesale network, this plays out in two different ways depending on the path.
What Is the Clock on the Asset Qualifier Path?
On the asset qualifier path, most programs want 60 days of seasoning and two months of statements for each qualifying account. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. Subject to underwriting, leverage runs up to 80% on a purchase and 75% on a refinance for a principal residence or second home, and loans go up to $4,000,000 through select programs.
Credit percentages matter here because they set how much of each balance counts:
- Brokerage accounts, CDs, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
The credit floor on this path is 600, and no employment or income is documented. Assets are documented thoroughly, though. “No income documentation” never means “no documentation.”
Picture a borrower after a home sale. Say you sold a house, and the net proceeds now sit in savings. If the settlement statement and the matching deposit are in your file, the lender can usually trace the money. If the deposit is under 60 days old and you cannot show where it came from, expect it to be excluded until it ages.
What Is the Clock on the Asset Depletion Path?
On the asset 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, subject to underwriting. The lender still reviews the source.
Here is how this path works. Usable assets, after haircuts, are divided by 60 months. The result is a monthly qualifying income. That income then runs through the debt-to-income test along with the housing payment and other debts.
The haircuts on this path are different from the qualifier path, so never blend the two tables:
- 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%.
Not eligible on this 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.
An illustration, with the lender’s own calculation governing. Take $1,500,000 in securities at 80%, which is $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then carries the housing payment and other debts.
Minimums apply too. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. Leverage on a principal residence or second home goes up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. On an investment property it is 65% and 60%. Loans run from $125,000 to $3,500,000.
Why Are Sale Proceeds Treated Differently From Other Deposits?
A closed sale produces its own proof. The settlement statement shows the sale, and the wire or deposit matches it. That paper trail does the work that time otherwise would. Experian notes that seasoning can reduce your need to provide sourcing documentation. Reduce is the key word. It does not erase the need for proof.
This is the point most borrowers miss. Sixty days is the benchmark for money with no paper trail. It is not a toll every dollar must pay. Documented sale money can often be counted sooner, while an unexplained transfer from a friend cannot.
| Sale type | Proof of source | How the clock is usually treated |
|---|---|---|
| Home sale | Settlement statement, matching deposit | Sourced by the paper; seasoning depends on path |
| Business sale | Closing documents, matching deposit | Excused from seasoning on the depletion path |
| Securities sale | Trade confirmations, brokerage statements | Treated as account funds; haircut applies |
| Retirement withdrawal | Distribution record, receiving account | Depends on the path and the account type |
Treatment varies by program and is confirmed file by file.
Where Does the Clock Start and Stop?
Programs differ on whether seasoning is measured back from application or from the date title was recorded. Some lenders count statements at application; others check again before closing. Ask which date your program uses before you move any money. The answer changes how early you should have the funds in place.
Here is a simple illustrative sequence using no real dates:
1. Your sale closes and you get the settlement statement.
2. Proceeds land in the account you will use for the purchase.
3. Two months of statements start to accumulate.
4. You apply, and the lender reviews the statements.
5. Any out-of-pattern deposit gets a letter of explanation and the settlement statement.
6. The underwriter accepts the deposit as sourced or sets it aside as unseasoned.
Wire the proceeds straight to the account you will use, and save the settlement statement. That one habit prevents a late-file “where did this come from” condition.
What Edge Cases Trip Up Borrowers?
Most stalls come from a handful of repeat situations:
- Funds still in escrow. Escrow accounts are not eligible on the depletion path. Wait until the money is released into your own account.
- Proceeds in an entity account. Business accounts count only for your ownership share, and the lender wants proof of ownership and access.
- Money you already spent. Proceeds used for a prior down payment cannot count again.
- Split proceeds. If a spouse shares the sale, document each person’s share.
- Crypto, metals, collectibles. These are not published as eligible on either path. The documented route is converting them to cash in a regulated account and letting the lender review the source.
- Borrowed or pledged funds. These do not count as qualifying assets.
A mid-file transfer between your own accounts creates a new item to explain, because the underwriter will want the source account statement as well. Avoid shuffling.
What About 1031 Exchange Money?
A 1031 exchange works the opposite way from a cash sale. The money must never touch your account. A qualified intermediary holds the proceeds, and Pease Bell explains that you must use that intermediary and avoid actual or constructive receipt. The federal tax rules set a 45-day written identification window and an 180-day completion period for the replacement property.
Those are tax deadlines, not loan timelines. They run at the same time, not back to back. The Real Estate CPA warns that if the money hits your bank account, even for a day, the exchange is blown. Because the intermediary wires funds straight to closing, they never sit in your account to season. The paperwork stands in for seasoning.
A 1031 exchange also applies to investment property being replaced with investment property. If you want a principal residence or second home on an asset-based path, a cash sale with a clean paper trail is the more typical route. Tax treatment varies; consult a qualified professional.
How Do Proceeds Interact With Down Payment and Reserves?
The same dollars cannot do two jobs. Funds to close come out first. Whatever remains is what the asset math can use. On the qualifier path, no reserves are required at or below 75% loan-to-value, and above that the lender sets them. The depletion path has no published reserve months.
So run it in order. Subtract the down payment and closing cash. Apply the credit percentages to what is left. Then compare to the loan amount or the depletion minimums. Cash-out proceeds from a refinance never count as qualifying assets on the depletion path.
A real tradeoff sits here. A larger down payment lowers the loan, which helps the qualifier math. It also drains the pool you need for depletion income. Many borrowers do better running both versions before making an offer.
Why Do Sources Disagree, and How Do You Find Your Rule?
You will see seasoning quoted at 30 days, 60 days, 120 days, or “none.” Each can be right for a different program. Agency and conventional rules, FHA, bank statement programs and asset-based programs all set their own triggers, and no federal rule sets a period for non-agency loans.
Use this frame to find your rule:
1. Identify your path: assets cover the loan, or assets become income.
2. Identify your sale type: home, business, securities or retirement.
3. Ask which statement dates the program checks, at application or at closing.
4. Ask what the lender wants to see for any deposit that is under the window.
Across our network, the strictest overlays want full statement history on everything, while some programs excuse specific sale types. That is why the same borrower can get different answers from different lenders.
Does Tennessee Change Anything?
Not the program. Leverage, asset credit, seasoning and credit minimums are the same for a Tennessee borrower as anywhere else. Consumer mortgage lending through Lendmire’s network is licensed in 16 states, and Tennessee is one of them. What differs locally is practical: which closing attorney handles your file and how they receive wires. Tell them early that sale proceeds are funding the purchase. For the wider picture, see Lendmire’s complete DSCR loans guide for how investor-side programs differ from consumer asset-based ones.
What Should You Gather?
- Settlement statement from the sale
- Matching deposit record or wire confirmation
- Two months of statements per qualifying account (qualifier path)
- Statements 120 days old plus one within 45 days (depletion path)
- A short letter explaining any unusual deposit
- Proof of ownership for any entity or shared account
What Mistakes Stall the File?
- Moving proceeds between accounts mid-file
- Counting the same dollars for the down payment and the assets
- Parking money in an ineligible account type
- Assuming a bigger down payment shortens seasoning
- Waiting to sort out paperwork until the underwriter asks
If you are weighing whether a sale alone can carry you, Lendmire’s piece Can Sale Proceeds Alone Qualify You for an Asset Depletion Loan? covers that question directly.
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.
Frequently Asked Questions
Do sale proceeds always need 60 days in my account?
No. A documented sale is itself a sourcing document. On the asset qualifier path, expect 60 days of seasoning and two months of statements per account through most programs, subject to underwriting.
Is business-sale money treated differently?
Yes, on the asset depletion path. Sale-of-business, inheritance and legal-settlement funds are excused from the 120-day statement seasoning, though the lender still reviews the source. Treatment on the qualifier path is set by the program.
Can I leave the proceeds with a 1031 intermediary and still buy this way?
Those funds never sit in your account, so they cannot season there. A 1031 applies to replacing investment property, and the paperwork substitutes for seasoning. If you want a principal residence or second home, a cash sale is the more typical route.
Does Tennessee have its own seasoning rule?
No. Seasoning is a lender and program convention, not a state law. The figures are the same for Tennessee borrowers, though a local closing attorney affects how wires and documents are handled.
Can crypto sale proceeds count?
Not directly. Crypto is not published as eligible on either path. The documented route is converting it to cash in a regulated account and letting the lender review the source.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee borrowers.
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. Experian — Seasoned Funds for a Down Payment
2. Pease Bell — 1031 Exchange Rules
3. The Real Estate CPA — 1031 Guide
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 a Retiree Using Asset Depletion Need a Super Jumbo Loan? · Asset Depletion vs Bank Statement Loan After a One-Time Property Sale · How Long Should Money Sit in an Account Before an Asset-Based Mortgage Application?
Guides: Asset-Based Mortgage in Tennessee
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.