The Quick Read: Usually yes, but the loan path you choose decides whether the waiting period applies. On the asset depletion path, inherited money is excused from the 120-day statement-age rule. On the asset qualifier path, the 60-day seasoning rule still applies, so plan to wait. Every file is underwritten individually, subject to underwriting.
- An inheritance is an asset, not income, so the lender tests it as an asset.
- The money must be distributed and sitting in an account in your name. Funds still held by the estate generally do not count.
- On the asset depletion path, eligible assets divided by 60 months become your qualifying income. Inherited funds are excused from the 120-day statement seasoning.
- On the asset qualifier path, eligible assets must cover the entire loan. That path asks for 60 days of seasoning and two months of statements per account.
- Either way, you document the source with estate paperwork and a statement showing the deposit.
What Does Seasoned Mean, and Why Is Inheritance Treated Differently?
Seasoned means the money has sat in your account for a set period before you apply. Lenders use that waiting period to rule out a hidden loan. A big deposit with no explanation could be borrowed money, and borrowed money changes your risk.
Inheritance is different because it comes with its own paper trail. A will or trust names you. A court-issued letter shows who runs the estate. A distribution check or wire traces the money from the estate to you. That trail answers the question seasoning is meant to answer.
Still, a paper trail does not erase every waiting rule. Across the programs we place files with, the treatment of inherited funds splits by path. One path excuses inheritance from the statement-age rule. The other has no published inheritance exception. Many borrowers assume a blanket exemption, and the files that stall are the ones that assumed it.
Two Asset-Based Paths, Compared
Asset-based mortgage programs review your file on what you own, not on a paycheck. They come in two forms, and you are qualified on one path at a time. The asset-based mortgage program page walks through both. Here is how each treats a new inheritance, through select programs and subject to underwriting.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| What is tested | Assets cover the whole loan | Assets become monthly income |
| Seasoning | 60 days, two months of statements | 120-day-old statements; inheritance excused |
| Max leverage (primary/second home) | 80% purchase, 75% refinance | 80% purchase, 60% cash-out |
| Investment property | Not offered | 65% purchase, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Best fit | Large balances, no income to show | Assets that must carry a payment |
The depletion row for investment property is business-purpose financing. A rental that is reviewed on its own rent is a different product, and this article does not cover it.
On the qualifier path, the loan is reviewed on verified assets rather than income documentation, subject to lender guidelines. You still document the assets with statements, and the loan still goes through full underwriting. Credit starts at a 600 minimum score on that path. The depletion path follows the lender’s matrix, and a first-time investor needs 700.
Which Path Fits an Inheritance?
Fit comes down to two things: how much cash arrives and how long it has been in your name.
The qualifier path suits a borrower whose inheritance is large relative to the loan. The assets, after the credit percentages, must equal or exceed the entire loan amount. If that is true and the money has aged 60 days with two statements per account, the file can qualify on assets alone. No reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
The depletion path suits a borrower who needs the inheritance to act as income. It also suits a borrower who cannot wait. The lender divides usable assets by 60 months and runs the result through the debt-to-income test. Because inheritance funds are excused from the 120-day statement seasoning, a recent distribution can still work here.
Depletion has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset income is your only income source, you also need no less than $250,000 liquid. If the asset income only supplements documented income, it may run up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Here is the honest tradeoff. The depletion path is the one built to accept fresh inheritance money. It also asks for the most conservative leverage on cash-out, and it haircuts several asset types. The qualifier path counts more of your balance but gives no inheritance exception. Neither is better. The right one depends on your balance, your loan size and your calendar.
When Inherited Money Is Not Usable Yet
Inherited money does not count until it is distributed and in your name.
Several situations keep funds out of reach:
- Probate is still open. The personal representative has not distributed the funds.
- A trust controls the money. If you are a beneficiary but not the one in control, the balance is not yours to document yet.
- Multiple heirs have not split the estate. Your share is not defined until the split happens.
- A dispute is pending. A contested will or trust holds everything.
- An asset must be sold first. An inherited house or private holding is not cash until it sells.
In Indiana, an estate is run by a personal representative, and the court issues letters confirming that authority. Those letters, plus a distribution letter or check, are what turn an expected inheritance into a documented asset. Ask the personal representative for both early.
You can often talk to a broker before the money arrives. You just cannot count it. Planning ahead lets you choose a path and gather paperwork while the estate finishes.
From Estate to Application: The Order of Operations
Follow the sequence below. Skipping a step is how files get delayed.
1. Estate distributes. The personal representative sends your share by check, wire or account transfer.
2. Deposit into one account in your name. Pick an account at a regulated financial institution and leave the money there.
3. Gather the source documents. You need the will or trust page naming you, the court letters, and the distribution check or wire record.
4. Collect statements. Save the statement that shows the deposit and every statement after it.
5. Pick the path. Decide between qualifier and depletion based on loan size, balance and timing.
6. Apply and let the lender review. The lender documents the assets and reviews the source of any large deposit.
Keep the inherited money in one place. Moving it between accounts adds statements, adds questions and makes the trail harder to read. If a large deposit draws a question, a short written explanation paired with proof usually settles it.
What Different Inherited Assets Count For
Inheritance rarely arrives as a single cash check. Each asset type counts differently, subject to underwriting.
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, the haircuts are steeper. Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. 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 are not eligible.
Cryptocurrency, precious metals and collectibles are not published as eligible on either path. Neither are pledged or borrowed funds. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source. Never assume they count at a percentage.
Inherited real estate is a separate question. If you sell it, the closing statement becomes your source document and the proceeds become cash. If you keep it, equity is a lower-percentage asset on the depletion path. Cash-out proceeds from any refinance never count as qualifying assets.
How a lender treats an inherited retirement account depends on the account type and the lender’s review. Ask before you assume the percentage.
Worked Example: Two Inheritance Scenarios
These numbers are illustrative, and the lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan on a primary residence. Your inheritance and savings include $330,000 in brokerage accounts, which count at 100%, so $330,000. You hold $300,000 in a 401(k) and are under 59½, so it counts at 90%, which is $270,000. You also hold $200,000 in savings, counted at 100%, so $200,000. The total is $800,000 of usable assets, which equals the loan. The file can qualify on assets alone, provided each account meets the 60-day seasoning and two-month statement rule.
Depletion path. Say the inheritance is $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Together that is $1,500,000 of usable assets. 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. Because the money is inheritance, it is excused from the 120-day statement seasoning.
Notice that the same inheritance can look strong on one path and thin on the other. The haircuts, the leverage and the seasoning rules all move together. A broker who sees many lenders’ guidelines can compare them side by side before you commit to a path.
Mistakes That Stall a File
Most delays come from avoidable mistakes:
- Counting the same dollars twice. Money used for the down payment and closing costs cannot also count as reserves or as the asset base. Plan the split before you apply.
- Spending down before you apply. A balance that drops can pull you below the minimum assets.
- Moving money around. Each transfer creates a new statement line to explain.
- Mixing inheritance with other deposits. A mixed account makes the inheritance harder to trace.
- Assuming a blanket exemption. The depletion path excuses inheritance from statement seasoning. The qualifier path has no published inheritance exception.
- Putting everything down. NerdWallet’s down payment guide cautions against draining your savings. Its focus is owner-occupied buyers, but the advice holds: leave yourself a cushion.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
How Do Conventional Rules and Gift Rules Compare?
Conventional loans follow different rules than asset-based programs. For conventional mortgages, Fannie Mae’s Selling Guide ties its large-deposit definition to a share of monthly qualifying income. On a purchase, if the funds are needed to close, the lender must document that they came from an acceptable source. That is Fannie Mae’s rule for its own loans. It does not govern the asset-based programs described here.
Gifts are a separate category from inheritance. A gift usually requires a gift letter and donor statements, and NerdWallet’s gift letter explainer notes that each loan type sets its own rules on what gift money may cover. An inheritance carries no repayment expectation, which is why the paperwork leans on estate documents rather than donor letters.
Key Terms Defined
Seasoning: the period money must sit in your account before a lender counts it.
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 divided by 60 months become qualifying monthly income.
Probate: the court process that settles an estate and authorizes distribution to heirs.
Loan-to-value (LTV): the loan amount as a percentage of the property’s value.
Large-deposit review: the lender’s check on an unusual deposit to confirm it is not borrowed money.
Frequently Asked Questions
Can I apply before the inheritance lands in my account?
You can talk to a broker and choose a path, but the money does not count until it is distributed and in your name. Use the wait to gather the will or trust page, the court letters and the distribution paperwork.
Does inheritance count as income?
No. It counts as an asset. On the qualifier path, assets must cover the whole loan. On the depletion path, usable assets divided by 60 months create the qualifying income that the debt-to-income test uses.
Should I put the whole inheritance toward the purchase?
Usually not. Money used for the down payment and closing costs cannot also count as reserves or as qualifying assets. Keep a cushion for repairs, vacancies or emergencies, and let the lender review how much you need to document.
What if the inheritance is a house or cryptocurrency?
An inherited house becomes usable cash only after a sale, and the closing statement is the source document. Cryptocurrency is not published as eligible on either path, so the route is converting it to a seasoned cash balance in a regulated account that the program reviews.
Do the leverage limits change if I buy an investment property?
Yes. On the depletion path, investment property is capped at 65% on a purchase and 60% on a cash-out, versus 80% and 60% on a primary residence or second home. The qualifier path covers a principal residence or second home only. All figures are subject to underwriting.
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 is a broker, and its consumer mortgage lending is licensed in 16 states, Indiana included.
Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
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References
1. NerdWallet: How Much Down Payment for a House
2. Fannie Mae Selling Guide, B3-4.2-02: Depository Accounts
3. NerdWallet: Gift Letter for a Mortgage
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Finance an Indiana Vacation Home With an Asset Qualifier Mortgage · Can a Georgia Trust Beneficiary Qualify for a Mortgage on Trust Assets? · How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage?
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.