The Quick Read: Usually yes, once the money is real: if the farm has closed, the net proceeds sit in an account in your name, and the lender can see the paper trail, those funds can cover the down payment and closing costs and can also count as qualifying assets on an asset-based mortgage through select programs. Money still held by an exchange intermediary, owed on a seller note, or owed in taxes does not count. Underwriting reviews every file individually, and nothing here is a commitment to lend.
- Proceeds must be documented, liquid and titled to the borrower before they count.
- On the asset qualifier path, eligible assets must cover the entire loan, and no employment or income is documented.
- On the asset depletion path, usable assets divided by 60 months become qualifying income.
- A farm that has not sold does not count as cash, and a 1031 exchange cannot fund a personal home.
- Lendmire is a broker. It arranges these loans through select lenders in its network, and the lender sets the final terms.
How Does an Asset Qualifier Mortgage Treat Farm Sale Proceeds?
An asset qualifier mortgage treats farm proceeds like any other seasoned cash. The lender looks at what sits in your accounts, applies a credit percentage to each type, and checks whether the total covers the whole loan. Nothing gets spent down, and no paycheck is documented.
Across the wholesale network Lendmire works with, two different paths exist. A borrower is qualified on one path at a time, so it helps to keep them separate.
The asset qualifier path. Eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. Loans run up to $4,000,000, with leverage up to 80% on a purchase and 75% on a refinance of a principal residence or second home. The credit score floor is 600, subject to underwriting. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The asset depletion path. Usable assets are divided by 60 months to create a monthly qualifying income. That income must then carry the full housing payment and your other debts through a debt-to-income test. Loans run from $125,000 to $3,500,000. A principal residence or second home can go up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. An investment property is limited to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
Here is how the credit percentages compare, using figures from select programs.
| Asset type | Qualifier path | Depletion path |
|---|---|---|
| Brokerage and securities | 100% | 80% |
| Savings, money market, CDs | 100% | Cash and CDs 100% |
| 401(k) or IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Private stock | Not published | 75% |
| Real-estate equity | Not published | 60% |
Two illustrations show the shape of the math. The lender’s own calculation governs in every real file.
On the qualifier path, picture an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100%, so $200,000). Together that is $800,000 of usable assets, which covers the loan on assets alone.
On the depletion path, picture $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts.
The depletion path also has minimum asset rules. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, liquid funds must also be at least $250,000.
From Gross Farm Price to Usable Assets
The number on the contract is not the number the lender counts. Farm sellers tend to be surprised by this, because they assume the whole payout becomes a qualifying asset. The usable pool is whatever remains after the money that is already spoken for.
Work through the layers in this order:
1. Start with the gross sale price on the settlement statement.
2. Subtract payoff of any land loan, operating loan or lien.
3. Subtract a tax set-aside. A CPA can estimate this, and it should be a real number rather than a guess.
4. Subtract the down payment and closing costs for the home.
5. Subtract any reserves you want to keep for yourself.
6. What remains is the pool that supports qualification.
The same dollar cannot do two jobs. Money used as a down payment is gone before the qualifying math runs. On a depletion-path file, this is where thin files get thinner.
Indiana farmland values give some context for timing. Purdue’s farmland values survey puts average-quality Indiana cropland at $12,121 per acre, down 1.1%, and top-quality land at $14,909 per acre, up 0.6%. That is a steady market, which means your payout is probably not riding on a sharp swing either way.
What Counts and What Does Not on a Farm Sale
Sale proceeds count when they are cash in a regulated account under your name. Almost everything else on a farm sale needs to be converted first. This table covers the usual pieces.
| Farm-sale piece | How a lender typically treats it |
|---|---|
| Net land proceeds in your account | Counts, once documented and seasoned |
| Proceeds in a 1031 intermediary account | Does not count while held |
| Seller-financed note | A receivable, so cash actually received counts, the note likely does not |
| Cash on hand or in a safe | Not eligible on the depletion path |
| Escrow account funds | Not eligible on the depletion path |
| Unsold or retained acreage | Not cash on the qualifier path; case by case on depletion |
| Grain, livestock, equipment | Count only after sold and deposited |
Retained land deserves a careful word. The depletion path lists real-estate equity at 60%. How a lender treats equity in working farmland is a case-by-case review. The cleaner route is to sell, deposit and document.
Cryptocurrency, precious metals and collectibles 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.
The 1031 Exchange Fork
A 1031 exchange is a tax tool, and it points your money away from a personal home. The IRS instructions for Form 8824 limit like-kind exchanges to real property held for business or investment. A home you will live in does not qualify.
Here is the practical effect. If you choose the exchange, your proceeds sit with a qualified intermediary. The IRS sets a 45-day identification deadline and an 180-day exchange period, as the University of Kentucky’s farmland tax guidance explains. During that time you cannot use the funds as qualifying assets or as money to close. Any cash left over after the exchange, known as boot, is taxable.
So the choice is a real fork. Staying in the exchange defers tax and locks up the money until a rental closes. Taking the cash frees it as assets and cash to close, with the tax bill coming due. Tax treatment varies; consult a qualified professional.
Some sellers want to roll into a rental instead of a home. In that case, financing runs on a business-purpose investor loan that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The asset qualifier is built for a personal residence or second home.
Seasoning, Statements and the Paper Trail
Lenders want to see where the money came from and that it stayed put. “No income documentation” never means no documentation. Lenders must verify the assets they rely on with third-party records, and that applies here.
The seasoning rules differ by path:
- Qualifier path: 60 days of seasoning, with two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business funds are excused from that seasoning.
Whether a farm sale counts as a sale of a business depends on how the farm was held and operated. A lender’s review decides that. Do not assume it.
Gather these before you apply:
1. The closing statement or settlement statement from the sale.
2. Payoff letters for any loans paid from the sale.
3. The deed transfer record and title paperwork.
4. Bank or brokerage statements showing the deposit, matching the net proceeds.
5. A clear transfer trail if funds moved through escrow or an attorney’s account.
6. Distribution paperwork if an entity owned the farm.
Keep the money in one titled account rather than moving it through several. Every extra transfer is another question the underwriter has to ask. A short trail from the closing statement to the deposit makes for a clean file.
Notes, Entities and Co-Owners
Not every farm sale produces a lump sum. These structures change what counts.
Installment or seller-financed sales. The buyer’s note is a promise to pay, not liquid cash. Expect a lender to count only the money you have actually received. How a lender treats the note itself is up to that lender, so treat it as potentially worth nothing for qualifying.
Entity-owned farms. If an LLC or partnership sold the land, the proceeds belong to the entity first. The lender needs to see them distributed to you or an acceptable account. Only the portion that is actually yours counts, so expect to document your ownership share of the entity.
Co-owners and heirs. When siblings, a trust or an estate split the proceeds, only your documented share is yours to use. Get the distribution paperwork in writing.
The farmhouse. A sale that bundles land with a farmhouse can mix different tax treatments. Ask your CPA to separate the pieces so the lender sees one clear net figure.
Tax timing. A large gain can produce a large bill, and some sellers may have options to spread payment over time. Those options change what is truly spendable, so a CPA should settle them before you plan your pool.
Why Files Stall
In files that arrive on a broker’s desk, farm-sale files run into the same few problems:
- A large deposit with no matching closing statement.
- Proceeds still in escrow or with an exchange intermediary.
- A sale that has not actually closed yet.
- A retained interest in the farm that muddies whether the sale was a clean exit.
- Funds in a joint or entity account that the borrower does not fully own.
- A tax set-aside nobody planned for, which leaves the pool short.
Most of these are fixable with paperwork and patience. The thin-pool problem is harder. If the usable total comes in below the loan, or below the depletion minimums above, the answer may be a smaller loan or a larger down payment rather than a different program.
Which Route Fits a Farm Seller?
The right route depends on what you want to buy and what you want to do with the money. This table compares the common options in plain terms.
| Route | Best fit | Main tradeoff |
|---|---|---|
| Pay cash | Plenty of money, no need for a loan | Ties up liquid savings in one property |
| 1031 exchange | Rolling gain into a rental | Cannot buy a personal home |
| Asset qualifier mortgage | Home purchase, assets cover the loan | Needs assets at least equal to the loan |
| Asset depletion mortgage | Assets become income for the debt-to-income test | Haircuts shrink the pool |
| Conventional loan | Documented employment income | Reported farm income may look thin |
Asset-based options matter for many farmers. Depreciation, expenses and timing can make reported farm income look thin even when the balance sheet is strong. An asset-based mortgage program avoids relying on that reported income.
Agency programs sit in a narrower lane. Fannie Mae and Freddie Mac loans follow their own asset rules, which are tighter about what counts. Non-QM asset programs exist because of that gap, and their terms come from the lender, not from agency guides.
Key Terms Defined
Asset qualifier mortgage: A loan where eligible assets must cover the entire loan amount and no employment or income is documented.
Asset depletion mortgage: A loan that divides usable assets by 60 months to create qualifying income for the debt-to-income test.
Seasoning: The period funds must sit in your account, shown by statements, before a lender counts them.
Haircut: The share of an asset’s balance that a lender discounts when counting it. A 90% credit means a 10% haircut.
1031 exchange: A tax deferral for swapping business or investment real property into other qualifying property, using an intermediary.
Boot: Cash left over after an exchange, which is taxable.
Qualified intermediary: The third party who holds exchange proceeds so you never touch them.
Next Step
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. Lendmire’s consumer mortgage lending is licensed in 16 states, Indiana among them. The program places files through select lenders, and each file is underwritten individually.
Frequently Asked Questions
Can I use the whole farm sale price to qualify?
No. Only the net cash that reaches your account counts, and only after debts, taxes set aside, down payment and closing costs come out of the picture. The land’s appraised value does not count while you still hold the land. Once it sells and the money is documented, the net proceeds can count at the credit percentage for the account type they sit in.
Can my 1031 exchange proceeds buy my retirement home?
No. The exchange rules cover business or investment real property, not a home you live in. Funds held by the intermediary also cannot serve as qualifying assets during the exchange. If you want a personal home, you would take the proceeds as cash and plan for the tax.
Do I need traditional personal-income documentation or pay stubs?
Not on the asset qualifier path, where no employment or income is documented. The assets themselves are documented, with two months of statements per account and 60 days of seasoning, subject to underwriting. On the depletion path, the derived income runs through the debt-to-income test, though you can supplement it with documented income.
What if I sold on a seller-financed note?
Expect the lender to count the cash actually received, and possibly nothing from the note. The note is a receivable, not cash in the bank. Talk to a broker before you apply so you know which dollars count.
Does Indiana change the program numbers?
No. The leverage, seasoning and credit figures are the same in every state. Indiana is among the states where Lendmire’s consumer mortgage lending is licensed, but local taxes, insurance and prices are context rather than program parameters.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Purdue PAER Farmland Values and Cash Rent Survey Results
2. IRS Instructions for Form 8824
3. University of Kentucky Ag Econ, Farmland Sales and Taxes
4. 12 CFR 1026.43 (Cornell Legal Information Institute)
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Buy a Multi-Generational Home on an Asset Qualifier Mortgage? · Can Two Ohio Retirees Buy a Home Together on an Asset Qualifier Mortgage? · How an Asset Qualifier Purchase Works on a Primary Residence
Guides: Asset-Based Mortgage in Indiana
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.