The Quick Read: Yes, a Michigan business seller can usually qualify on the sale proceeds, as long as the cash is in the seller’s own account and documented, subject to underwriting. Through select asset-based programs, the lender reads the seller’s balances instead of a paycheck. Two paths exist, and a borrower is qualified on one at a time.
- 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 that runs through the debt-to-income test.
- Proceeds held in escrow, owed on an earn-out or a seller note, or sitting with a 1031 intermediary generally do not count until they are in the seller’s account.
- This is not a no-doc loan. Statements, credit and the property are all reviewed. The program asks for no traditional personal-income documentation, pay stubs or employment verification.
A business sale produces the most cash a person may ever hold and the least income a lender can read. A conventional file wants a job history and a tax-return trail. A seller who just exited has neither. That mismatch is the whole reason asset-based programs exist.
This article is about a seller buying a home to live in, or a second home, in Michigan. It is not about seller financing of a house, and it is not about self-employed income loans built on bank deposits. Program figures below are typical ranges from select lenders in Lendmire’s wholesale network, subject to underwriting, and they do not change by state.
Why Does a Business Sale Confuse Standard Underwriting?
A standard file reads recurring income. A sale is a one-time event, the payroll is gone, and the last traditional personal-income documentation shows a business that no longer belongs to the borrower. Underwriters see big balances and no paycheck, and the file stalls.
Asset-based programs fix that by changing what the lender reads. The balance sheet becomes the qualifier. The sale agreement and the settlement statement explain where the money came from, and the account statements show where it sits now.
Across the wholesale network, the files that go smoothly are the ones where the seller can answer one question on paper: which dollars are in my account today, and which are still owed to me? Everything else here follows from that answer.
The Two Ways Assets Can Qualify You
The asset qualifier path covers the whole loan with eligible assets. The asset depletion path turns assets into monthly income. Pick the path first, because the leverage, the credit percentages and the seasoning rules differ.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How assets are used | Must cover the entire loan | Divided by 60 months into income |
| Income documented | None | Derived income, DTI test |
| Purchase leverage | Up to 80% | Up to 80% (65% investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
All figures are ceilings through select programs, subject to underwriting. The depletion path’s leverage numbers above apply to a principal residence or second home, except where the table notes investment property. Whether cash-out proceeds are allowed on the qualifier path is set by the lender and is not published.
Lendmire arranges these loans as a broker through select lenders. The asset-based mortgage program page lays out both paths in more detail.
What Counts, and What Doesn’t
Balances count at different percentages depending on the path. Cash-type accounts count in full on both. Securities and retirement balances take a haircut on the depletion path.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage | 100% | Securities 80% |
| CDs | 100% | 100% |
| Money market, savings | 100% | Cash accounts 100% |
| 401(k) and IRA | 90% under 59½, 100% after | 70% at any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
Not eligible 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, and pledged or borrowed funds 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.
On the depletion path, cash-out proceeds never count as qualifying assets.
How Does a Business Sale Show Up as Assets?
Sale proceeds count once they are cash in the seller’s own name. Where the money sits on the day of application decides everything.
| Where the money is | Likely treatment |
|---|---|
| In the seller’s bank or brokerage account | Counts, documented with statements |
| In escrow or held back by the buyer | Generally not counted until released |
| Owed on an earn-out | Generally not counted until received |
| Owed on a seller note | Generally not counted until paid |
| With a 1031 exchange intermediary | Committed to the replacement purchase |
The treatment of contingent funds is a program-level call, and the lender’s review governs. Plan as if only the money you can print on a statement counts.
Worked Example: Qualifier Path
This is an illustration, not an offer. The lender’s own calculation governs.
Picture a seller buying a home with an $800,000 loan. After the sale, the seller holds $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings, and is under 59½.
1. Brokerage counts at 100%: $330,000. 2. The 401(k) counts at 90% under 59½: $270,000. 3. Savings counts at 100%: $200,000. 4. Usable assets total $800,000, which equals the loan, so the file is reviewed on assets alone, subject to underwriting.
Income is not documented on this path. The lender’s review rests on the assets.
Worked Example: Depletion Path
Say a seller holds $1,500,000 in securities and $300,000 in cash.
1. Securities count at 80%: $1,200,000. 2. Cash counts at 100%: $300,000. 3. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. 4. That income must carry the housing payment and other debts through the debt-to-income test.
The depletion path also has a floor. 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. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
How Deal Structure Changes the Usable Number
Gross proceeds are not usable proceeds. Three things shrink the number between the purchase price and the account balance.
Escrow holdbacks, earn-outs and seller notes. Money not yet received is not an asset. A seller who sold for a large headline price but receives half at closing should model the file on the half.
Installment reporting. IRS Publication 537 covers installment sales of a business. Tax treatment varies; consult a qualified professional.
1031 exchanges. After the 2017 tax law change, only real property qualifies for like-kind treatment, so a typical business sale is not a 1031 event. A seller whose sale included the building may use one. Funds sitting with a qualified intermediary are committed to the replacement purchase and are not liquid cash for this loan. The IRS 45-day identification and 180-day exchange periods are tax-code deadlines, and they draw on the same dollars as a home purchase.
An operator note from files like these: the sticking point is rarely the loan program. It is the large deposit. A lump sum with no paper trail from the sale agreement to the statement gets questions, and each question is a gap the seller can prevent.
Seasoning and Document Checklist
Seasoning rules differ by path.
- Qualifier path: 60 days of seasoning and 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, though the lender still reviews the source.
Assemble the following before the file goes in:
1. The purchase agreement and the final settlement statement from the business sale.
2. Wire confirmation showing the proceeds landing in the seller’s account.
3. Statements for every account counted, with all pages.
4. Documentation for any retirement balances and the seller’s age.
5. Credit information and a housing history. The program looks for 0x30x12.
6. A note on any funds still owed, so the lender sees what is excluded.
Apply Before the Sale Closes or After?
After is cleaner. Before closing, the money is a promise. After, it is a balance with a statement behind it. A seller who applies mid-sale invites the lender to guess about holdbacks and taxes.
The trade-off is timing pressure on the home purchase. A seller who wants the house contract signed before the sale funds can talk to a broker early, line up which path fits, and let the paper catch up. Leaving the proceeds invested is also a choice: balances that stay in a brokerage account still count, so a seller does not have to liquidate to qualify.
When This Isn’t the Right Fit
Honest limits matter here.
- Thin balances. The depletion path never goes below $250,000 liquid when assets are the only income source.
- First-time investor on the depletion path. A first-time investor needs a 700 score there.
- Credit events. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
- Mostly illiquid wealth. If the value is in the business that was sold on a note, equity in other assets or crypto, it may not count until converted.
- Cash purchase. A seller who can pay cash and wants no loan should say so. Financing is a choice about liquidity, not a requirement.
A seller who wants a rental instead of a home is on a different track. That is business-purpose financing, covered by DSCR loans, and it reads the property’s rent instead of the borrower’s assets. The Federal Register’s ability-to-repay rule says business-purpose loans fall outside its scope. The flip side matters: a seller who plans to live in the property should not use a business-purpose loan.
Michigan Considerations
Michigan is one of the 16 states where Lendmire’s consumer mortgage lending is licensed, so a Michigan seller can use the asset-based program for a principal residence or second home. Program figures stay the same as everywhere else. The state affects the local property and the paperwork, not the parameters.
A Michigan seller should line up a tax professional and, if the sale was large, an attorney who handled the deal. They can confirm what was received, what is held back and what is owed in taxes. The broker’s job is the loan structure.
Key Terms Defined
Seasoning: how long funds must sit in an account, shown by statements, before the lender counts them.
Usable assets: the balance left after each account is multiplied by its credit percentage.
Asset depletion: dividing usable assets by 60 months to create a monthly qualifying income.
Earn-out: part of the sale price paid later, based on how the business performs.
Qualified intermediary: the third party that holds proceeds during a 1031 exchange.
Frequently Asked Questions
Do I have to wait after selling the business?
Not necessarily. On the depletion path, sale-of-business funds are excused from the 120-day statement seasoning, though the lender reviews the source. On the qualifier path, funds need 60 days of seasoning with two months of statements per account. Either way, the money must be in your account.
Do I have to liquidate my investments?
No. Brokerage and other eligible balances count where they sit, at the percentages above. On the depletion path, securities count at 80%. Cash-out proceeds never count as qualifying assets on that path.
Does money held in escrow count?
Generally not until it is released to you. Escrowed funds, earn-outs and seller notes are not liquid assets until received. On the depletion path, escrow accounts are listed as not eligible.
Is this a no-doc loan?
No. Every file is fully underwritten, and the assets are documented with statements. The program asks for no traditional personal-income documentation, pay stubs or employment verification, but credit, assets and the property are reviewed.
Can I use the proceeds for the down payment and still qualify?
Yes, but the down payment comes out of your balances first. Count what remains after the down payment and closing funds, because that is what the lender will see. Run both scenarios before you commit the cash.
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. Reach the team at 828-256-2183, or use the quote request page. Program details are subject to underwriting and are not a commitment to lend.
A seller with a clean statement and a settlement sheet that match is the file that tends to move without questions.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan 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
2. Federal Register: Ability-to-Repay and Qualified Mortgage Standards
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 an Inheritance Qualify You for a Florida Mortgage Before It Is Seasoned? · How to Qualify for a Tennessee Mortgage on an Inheritance Without a Job · Can an Inheritance Qualify You for a Washington Mortgage Before It Is Seasoned?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.