The Quick Read: Usually, yes: the sale proceeds do not count as monthly income, but they can qualify you as assets, either by covering the whole loan or by being converted into a qualifying income figure, subject to underwriting. This is not seller financing, which is when a property owner carries the note for a buyer.
- Proceeds are assets, not paycheck income, so the question is which path uses them best.
- One path is reviewed on assets alone and documents no employment or income.
- The other path divides usable assets by 60 months to create income for the debt-to-income test.
- A borrower is reviewed on one path at a time, and the paths never blend.
- Proceeds must be in your name, in a regulated account, with paper showing where they came from.
Why a Business Sale Breaks Normal Income Underwriting
A sale ends the very income a standard lender wants to see. Your recent traditional personal-income documentation describes a company you no longer own. Your deposits stopped when the buyer took over. On paper, you look like a person with no job and a large bank balance.
That mismatch is the whole problem. A traditional lender reads the paperwork and sees a gap. An asset-based lender reads the same paperwork and sees a borrower with real wealth.
Trade press describes the same pattern. Scotsman Guide covers asset-based qualification for people with significant assets but without two years of traditional personal-income documentation or enough bank statements. Its example is an owner who sold a business, moved to Texas and started a new business 12 to 15 months later.
Think of it this way. Proceeds answer “can you afford this?” They do not answer “what do you earn?” Those are different questions, and the right program matches the first one.
Which Path Fits a Texas Seller?
The first choice is whether your assets should cover the loan outright or become income. Lendmire is a broker, so it arranges this through select lenders in its network. Consumer mortgage lending for these programs is licensed in 16 states, and Texas is one of them. All figures below are typical ceilings and floors, subject to underwriting.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How assets are used | Must cover the entire loan | Divided by 60 months into income |
| Income documented | None | Derived income runs through DTI |
| Purchase leverage | Up to 80% | Up to 80% (primary/second home) |
| Cash-out | Lender-set, not published | 60% |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
The asset qualifier path asks one question. After the credit percentages are applied, do your eligible assets equal or exceed the entire loan? If yes, no employment or income is documented. You supply no traditional personal-income documentation, pay stubs or employment verification. The assets are still documented with statements, and the file is fully underwritten.
The asset depletion path works differently. Usable assets are divided by 60 months to create a monthly qualifying income. That figure must carry the full housing payment and your other debts through the debt-to-income test. Debt-to-income is the share of your monthly income that goes to debt payments.
A seller with a very large balance and a modest loan usually fits the qualifier path. A seller with a large balance and a larger loan often needs the depletion path. Each file is different, and the lender’s own calculation governs.
What Counts as an Asset, and How Much?
Not every dollar counts at face value. Each path applies its own percentages, and mixing them up is a common mistake in these files.
On the asset qualifier path, these shares of the balance count:
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- Retirement accounts (401(k) and IRA) count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine, so you can add them up toward the loan amount.
On the asset depletion path, the haircuts are steeper:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%, and private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
The depletion path does not accept custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units or 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. The lender then reviews where the money came from.
Worked Examples
These two shapes show the arithmetic. The lender’s own calculation governs, and nothing here is an offer.
Qualifier path. Take an $800,000 loan. The borrower holds $330,000 in brokerage accounts, which count at 100% for $330,000. A $300,000 401(k) under age 59½ counts at 90% for $270,000. Another $200,000 in savings counts at 100% for $200,000. Usable assets total $800,000, which covers the loan, so the file is reviewed on assets alone, subject to underwriting.
Depletion path. Take a seller with $1,500,000 in securities and $300,000 in cash. The securities count at 80% for $1,200,000, and the cash counts at 100% for $300,000. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Notice what neither example does. A one-time deposit is not averaged as recurring pay.
Seasoning, Statements and Credit
Seasoning is the time money must sit in your account before a lender will count it. The two paths handle it differently.
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. Here is the good news for sellers: the depletion path excuses sale-of-business funds from that seasoning, as it does inheritance and legal-settlement funds.
Credit still matters. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix for score and loan amount. A first-time investor on the depletion path needs a 700 score.
Housing history is reviewed too. The program looks for 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs 4 years of seasoning.
The depletion path also has minimum assets. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. Asset depletion as your only income source also requires at least $250,000 in liquid assets. If asset income only supplements documented income, it can count up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Sale-Specific Complications
A normal asset file is simple. A fresh business sale adds a few wrinkles, and they decide most outcomes.
Proceeds in the old company’s account. Money sitting in the selling entity may not count as your personal assets. This is a documentation issue, not a disqualifier. Move the funds to your personal or vesting-entity account, and keep the sale papers with the transfer records.
Escrow and holdbacks. Money still in escrow is not a verifiable asset yet. The depletion path also lists escrow accounts as ineligible. Plan to apply after the funds are released into your name.
Earn-outs and installment payments. If the buyer pays over several years, only part of the price arrives as cash. Cash in hand counts. A promissory note receivable is generally not liquid cash. How a lender values a seller note is lender-specific, so treat it as unproven until a lender says otherwise.
Taxes owed on the sale. Set aside what you will owe and do not count that money as free liquidity. Tax treatment varies; consult a qualified professional.
Double-counting. Money used for the down payment or closing costs generally cannot also count toward qualifying assets. Run your file on what remains after those uses.
Fresh deposits. A large deposit with no paper trail triggers a sourcing question. Land the money well before you apply and keep the closing statement and wire record together. The file may stall on sourcing, not on net worth.
Consulting agreements. If the buyer pays you a transition or consulting fee, treat it as separate from the sale. Whether it counts as income depends on the program and the paperwork behind it.
What to Bring
Assemble these before you talk to a lender:
1. The purchase agreement or the closing (settlement) statement from the sale.
2. Wire records showing the money moving into your personal or vesting-entity account.
3. Statements for every account you want to count, meeting the seasoning rules above.
4. A government ID and credit authorization.
5. Documents for the property you are buying.
6. Entity documents, if the property will be held in an LLC, subject to program terms.
Proceeds are assets and reserves. They are not monthly income.
Buying a Rental With Sale Proceeds
Many sellers want rentals, not a home. Here the answer shifts, and it is mostly good news.
DSCR stands for debt service coverage ratio. It compares a rental’s income to its full monthly payment. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income is not the test, so the missing business income does not hurt you. Your credit is still reviewed, and you still show the source of your down payment and reserves. Here the proceeds fund the purchase instead of qualifying the loan.
The brief version of the rules: 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 behind that treatment is worth a look. Per the CFPB’s Regulation Z commentary, credit to acquire, improve or maintain non-owner-occupied rental property is deemed business purpose. The same commentary says the lender must decide the primary purpose case by case. An owner-occupied purchase is a different analysis, which is why a home needs an asset-based mortgage rather than DSCR.
Investors often close these loans in an LLC, subject to lender program eligibility. The owner usually still provides credit and identity documents, and often a personal guarantee.
If you would rather qualify on assets for an investment property, the depletion path allows it. Leverage is lower. On an investment property, the depletion path allows up to 65% on a purchase or rate-and-term refinance and up to 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. For a primary residence or second home on the same path, the limits are 80% and 60%.
Where It Does Not Fit
Honesty matters here. Some sellers will not qualify on the proceeds alone.
- Bank-statement loans work for borrowers who document income with deposits. They fail once deposits stop after the exit. They fit only if a second business, consulting work or an earn-out keeps deposits flowing.
- Agency programs from Fannie Mae and Freddie Mac set their own rules for business-sale proceeds. Those are those programs’ rules, not this one’s, and the two should not be mixed.
- Thin assets can be the problem. If usable assets fall below the depletion minimums, or fail to cover the loan on the qualifier path, neither works.
- Unseasoned or unsourced funds can sink a file even when the net worth is huge.
- Credit problems still matter, and approval is never promised.
Common Mistakes
- Spending or moving proceeds before the lender has seen two clean statements.
- Leaving money in the business account and assuming it counts personally.
- Counting the same cash for both the down payment and the qualifying assets.
- Applying while proceeds sit in escrow.
- Mixing the two paths, such as using a qualifier-path percentage on a depletion file.
- Reading “no income documentation” as “no documentation.” Every file is fully underwritten, and the assets are documented with statements.
Key Terms Defined
Asset qualifier path: the route where eligible assets must cover the entire loan, and no employment or income is documented.
Asset depletion path: the route where usable assets are divided by 60 months into qualifying income for the debt-to-income test.
Seasoning: the time funds must sit in an account before a lender counts them.
Haircut: the share of an asset’s balance a lender will not count.
DSCR: the ratio of a rental’s income to its full monthly payment.
Source of funds: the paper trail showing where your deposit came from.
Next Steps
Start with a short list. Decide whether you are buying a home or a rental. Move proceeds into your own regulated account. Gather the sale documents and statements. Then see which path leaves you the most room.
If your plan involves a home purchase, the asset-based mortgage program page lays out both paths. If your proceeds came from a house rather than a company, Lendmire’s guide How to Qualify on Home-Sale Proceeds Using an Asset Depletion Mortgage covers the same math for that 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.
Frequently Asked Questions
Do sale proceeds count as monthly income?
No. Proceeds are assets, and a one-time deposit is not averaged as recurring income. They qualify you either by covering the loan on the qualifier path or by being divided by 60 months into derived income on the depletion path.
Is this a no-doc loan?
No. Every file is fully underwritten. You skip traditional income documentation, pay stubs and employment verification, but the lender documents your assets with statements. It also reviews credit, the property and the source of your funds.
What if the money is still in escrow or tied to an earn-out?
Escrowed money is not a verifiable asset yet, and the depletion path lists escrow accounts as ineligible. Earn-out payments count only after they reach your account. A seller note is generally not liquid cash, and treatment is lender-specific.
Can I use the same money for the down payment and to qualify?
Generally not. Cash used at closing is spent, so it comes out of the pool of qualifying assets. Run your numbers on what remains after the down payment and closing costs.
Does a Texas address change the program figures?
No. The leverage, asset percentages and seasoning rules are the same wherever you live. Texas is one of the 16 states where Lendmire arranges consumer lending for this program, subject to underwriting.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas borrowers.
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. Scotsman Guide: Helping borrowers fit the boxes
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 Qualify for a Mortgage If Your Income Is in a Foreign Currency? · How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage? · How Business Sellers Get a Mortgage Right After the Sale Closes
Guides: Asset-Based Mortgage in Texas
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.