The Quick Read: A lender counts only money it can verify and that you can actually reach. It does not count everything you own. The application lists what you claim, and your statements prove it. Funds for the down payment, closing costs, and reserves must be documented, seasoned, and free of unexplained deposits.
Key Takeaways
- Think in three buckets: what you list, what the lender counts, and what you can use at closing.
- Unverified funds are not acceptable for the down payment, closing costs, or reserves.
- Cash to close comes out of your assets first. Reserves are tested on what is left.
- A large deposit means a single deposit above 50% of your monthly qualifying income. Those get a closer look.
- Gifts, retirement money, business accounts, foreign funds, and crypto each follow their own documentation path.
Across the wholesale programs Lendmire places files with, most asset delays come from paperwork, not from a shortage of money. A borrower can have plenty in the bank and still stall on a missing page or an unexplained transfer. This guide shows you how to avoid that. Lendmire is a mortgage broker, not a lender. It arranges these loans through wholesale lenders, and every program detail here is subject to lender guidelines and full file review. Nothing here is a commitment to lend.
Conventional payment estimate
The starting figures are an example price at the first-time buyer’s minimum down payment. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a conventional loan quote.
Estimate seeded at the low end of Fannie Mae’s published range (0.58%–1.86% a year); the insurer prices the actual premium on the score and the leverage. Applies only above 80% loan-to-value.
Illustrative starting assumptions: a $350,000 price, the first-time buyer’s minimum down payment, a thirty-year term at the current Freddie Mac benchmark, mortgage insurance at the low end of Fannie Mae’s published range, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a conventional loan quote; your rate is set by the lender at lock. The mortgage insurance figure is an editable estimate seeded from Fannie Mae’s published typical range, not a premium quote; the insurer prices the actual premium, and the cancellation month assumes scheduled payments with no extra principal and no change in value. Taxes, insurance and dues are editable estimates; closing costs are not included. Conforming loan limits apply by county. Licensed in sixteen states for consumer mortgages.
Listed, Counted, Usable: The Model That Clears It Up
Listed means you typed it into the asset section of the application. Counted means the lender accepted it as an eligible, verified asset. Usable means the money can actually reach the closing table or sit as reserves afterward.
Those three are different. A car, jewelry, or a collection is something you own, but it does not fund a closing unless you sell it and document the proceeds. A retirement account may be counted, yet you may not want to cash it out. A new deposit might be listed but never counted because nobody can trace its source.
So list honestly, and then ask of each item: can I prove it, and can I reach it?
What Do Your Assets Have to Cover?
Your assets do three jobs: the down payment, the closing costs, and reserves. Reserves are liquid or near-liquid assets you still have after closing. Lenders measure them in months of the new home’s full monthly housing payment, which includes principal, interest, taxes, insurance, and any association dues. The industry shorthand is PITIA.
The order matters. Under the Fannie Mae Selling Guide on minimum reserves, the funds needed to close are subtracted from your available assets before reserves are checked. So if your savings just barely cover the down payment and closing costs, the reserve test starts near zero.
How many months of reserves you need depends on the transaction. The agency Eligibility Matrix ties reserves to things like occupancy, the number of units, and, on some transactions, your debt-to-income ratio. Second homes and borrowers with multiple financed properties carry added reserve requirements. Your loan officer will tell you the number for your file. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
The leverage you choose also shapes how much cash you need. Across the programs Lendmire places, a one-unit principal residence can go to 97% loan-to-value (3% down) when at least one borrower is a first-time buyer, and to 95% (5% down) otherwise. Loan-to-value, or LTV, is the loan amount divided by the home’s value. A smaller down payment means less cash to close, but mortgage insurance applies above 80% LTV. Second homes top out at 90%. All of this is subject to lender guidelines.
Which Accounts Count, and What Proof Do They Need?
Here is the asset-by-asset view. The “typical proof” and “watch for” columns are general. Your lender sets the final treatment.
| Asset | Typical proof | Watch for |
|---|---|---|
| Checking, savings, money market, CDs | Statements or a verification of deposit | Large or unexplained deposits |
| Stocks, bonds, mutual funds | Recent monthly or quarterly statement | Margin balances reduce value |
| Retirement accounts (IRA, 401(k)) | Statement showing vested balance | Unvested funds do not count |
| Business accounts | Statements plus business review | You must be an account owner |
| Gift funds | Gift letter plus transfer proof | Donor must be acceptable |
| Foreign funds | Conversion to U.S. dollars | Must be held in a U.S. or state-regulated financial institution |
| Crypto | Conversion to dollars, documented | Source of the deposit |
| Cars, jewelry, collectibles | Proceeds of a sale | Not usable until sold |
Bank accounts
Checking, savings, money market, CD, and other depository accounts can fund the down payment, closing costs, and reserves. Per the Fannie Mae Selling Guide section on depository accounts, the funds must be verified, and unverified funds are not acceptable.
Verification comes in two forms, described in Fannie Mae’s guidance on verifying deposits and assets. One is a Request for Verification of Deposit (Form 1006), which the lender must request directly from your bank and which must come back signed and dated from the bank itself. The other is your own statement. It must name the financial institution and you as the account holder.
Send every page of every statement, even the blank-looking ones. Cropped screenshots invite follow-up requests.
Stocks, bonds, and mutual funds
For securities, the lender determines value, net of any margin account, from your most recent monthly or quarterly statement, per Fannie Mae’s rules on stocks and mutual funds. Some lenders apply a haircut for market swings. Expect the counted value to be lower than the number on your screen.
Retirement accounts
Vested IRA, SEP, Keogh, and 401(k) funds can count for the down payment, closing costs, and reserves, according to Fannie Mae’s retirement account guidance. The lender confirms you own the account and that the money is vested.
Unvested funds, and funds you cannot withdraw except at retirement or when employment ends, do not count as reserves. If you use retirement money only for reserves, you do not have to withdraw it. If you use it for cash to close, the lender will document how the money reaches you. A loan against the account reduces what counts.
Business accounts
Business money can count when you are self-employed and listed as an owner on the account. The lender must run a cash-flow analysis to confirm that pulling the funds will not hurt the business, per the archived Fannie Mae section on depository accounts. If the business needs that cash to operate, the lender may not count it.
How Do You Fill Out the Asset Section?
Follow this sequence. It takes the guesswork out of the form.
1. Gather one account list. Write down every bank, brokerage, and retirement account with its institution name and the names on it.
2. Pull complete statements. Get every page for each account, with your name and the institution showing.
3. Enter balances as they appear. Use the statement figure, not a rounded guess or a number from memory.
4. Note ownership. Mark joint accounts and business accounts clearly, and be ready to show you have access.
5. Scan for deposits. Flag any single deposit above 50% of your monthly qualifying income. Gather the source now, not later.
6. Mark gifts and sales separately. Gift funds and sale proceeds need their own paper trail.
7. Leave out money you cannot support. Cash in a drawer or a promised loan from a friend will not help.
Before you upload anything, run each account through a short self-audit. Is your name on it? Are all pages present? Is every large deposit explained? Is the money accessible? If any answer is no, fix it first.
The automated underwriting system tells the lender how much documentation your file needs. Its findings, including the “Total Funds to be Verified” amount, set the target your verified assets must meet. Follow what your loan officer asks for rather than guessing.
What Happens With Large Deposits?
A large deposit is a single deposit above 50% of your total monthly qualifying income, per the archived Fannie Mae section. The 50% test applies to one deposit, not your whole balance. Routine paychecks and tax refunds are usually easy to recognize and rarely need extra paper.
When a deposit does need explaining, the steps are simple:
- Write a short letter saying where the money came from.
- Attach proof, such as a sale record, a transfer from another account of yours, or a gift letter.
- Show the money leaving its original source.
The lender must also look for signs of borrowed money, per the same depository accounts section. Borrowed funds generally do not work as your own money, and any new debt can affect your ratios.
If you cannot source a deposit on a purchase, a lender can often set it aside and continue, as long as the remaining verified funds are enough. That is why it pays to know your true spendable total before you commit to a price. On a refinance, the lender generally does not need documentation for large deposits, but it must still consider any borrowed funds and related liabilities.
Moving money between your own verified accounts is usually simple. Show both statements so the lender can follow the trail.
Gift Funds: The Checklist
Gifts can fund all or part of the down payment, closing costs, or reserves on a principal residence or second home, subject to minimum borrower contribution rules for the program. They are not allowed on investment property, and a gift of equity cannot count toward reserves. Per Fannie Mae’s personal gifts section, you need:
- An acceptable donor. That means a relative by blood, marriage, adoption, or legal guardianship. It can also be a non-relative with a familial relationship, such as a domestic partner, a fiancé(e), or a long-standing mentor.
- A signed gift letter. It states the amount and that no repayment is expected.
- Proof of transfer. That could be the donor’s check and your deposit slip, or an electronic transfer record.
A seller can be a donor only if they are an acceptable donor and have no tie to the other interested parties. A donor who has lived with you for the last 12 months can count as your own funds. How much of your own money you must put in depends on the occupancy and LTV, so ask your loan officer.
Edge Cases: Where the General Rule Breaks
Foreign funds. Money from outside the U.S. needs documented proof that it was exchanged into U.S. dollars and held in a U.S. or state-regulated financial institution. The dollar funds must be verified before closing.
Crypto. Fannie Mae has a dedicated topic on virtual currency within its general asset requirements. In practice, crypto generally has to be converted to dollars and documented before it counts.
Cash on hand. Cash at home is hard to verify. Depositing it creates a large, unsourced deposit. Skip the surprise and tell your loan officer early.
Unusual sources. The Guide also covers trust accounts, grants, lender contributions, employer assistance, pooled savings, and more. If your money comes from something unusual, ask before assuming it counts.
Occupancy. If you are buying a second home, occupancy changes the leverage. Second homes go to 90% LTV on the programs Lendmire places, and added reserves can apply. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Walking Through a Scenario
Picture a first-time buyer purchasing a one-unit primary residence at 97% LTV. Their application lists a checking account, a savings account, a 401(k), and a car. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The lender counts the checking and savings once the statements are in. It counts the 401(k) only for its vested amount. The car goes in the “listed, not usable” pile, since nobody is selling it.
Then the lender subtracts cash to close from the bank balances. Whatever remains, plus the vested retirement funds, is tested against the reserve requirement. Suppose the buyer’s parent sends a gift. The gift letter and transfer record turn that deposit from a mystery into a documented source. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Now picture the same buyer without the paperwork. A deposit from an unnamed source sits in savings. The lender may drop it from the total, and the buyer may fall short on funds to close. Same money, different outcome, based entirely on documentation.
Common Mistakes That Trigger Conditions
- Moving money mid-process without keeping both statements.
- Sending partial statements or screenshots.
- Opening a new account with no history behind it.
- Paying off debts with account funds shortly before closing, which shrinks your verified total.
- Counting borrowed money as your own.
- Assuming a listed asset is a counted asset.
- Confusing rules. One often-repeated “10% deposit” rule belongs to Freddie Mac’s asset-based qualification, not to ordinary purchase verification. Fannie Mae’s large-deposit test is 50% of monthly income.
If an asset will not count, you have four options: convert it to cash and document the sale, wait until it is seasoned, document it another way, or drop it from your plan.
When Do Assets Stand In for Income?
Assets can also be used as a basis for repayment on certain files, a different use from funding your closing. Ask your loan officer whether that applies. It does not change how you verify ordinary down payment funds.
Key Terms Defined
Asset: Money or property you own that a lender may count toward your down payment, closing costs, or reserves.
Reserves: Liquid or near-liquid funds you still hold after closing, measured in months of the full housing payment.
Seasoning: The time money has sat in your account, which helps show it is yours.
Verification of deposit (VOD): A form completed directly by your bank to confirm your balance.
Large deposit: A single deposit above 50% of your monthly qualifying income.
Gift letter: A signed statement from the donor that the money is a gift, not a loan.
Frequently Asked Questions
Do retirement accounts count on a conventional loan?
Yes, the vested portion can count for the down payment, closing costs, and reserves. The lender confirms you own the account and that it allows withdrawals. If you use it only for reserves, you do not have to withdraw it. Unvested money and balances you cannot touch before retirement do not count.
Can I use crypto for my down payment?
Generally only after you convert it to U.S. dollars and document the trail. Expect the lender to ask where the money came from and to review the deposit that results. Treatment can vary by lender, so raise it with your loan officer before you sell.
Do I need to explain every deposit?
No. The test is a single deposit above 50% of your monthly qualifying income. Ordinary payroll, Social Security, and tax refund deposits are usually easy to recognize. Anything above the threshold needs a source, such as a sale record or a transfer from another verified account.
Can a gift cover my entire down payment?
On a principal residence, a gift can fund all or part of it, subject to the program’s minimum borrower contribution rules. You need an acceptable donor, a signed gift letter, and proof of transfer. Gifts are not allowed on investment property.
Should I list assets I do not need for closing?
List what the application asks for, accurately. But only verified, accessible funds help you qualify. Vehicles and collectibles generally do not count unless sold. Extra assets that you can document may help with reserves, so ask your loan officer what is worth including.
If you are buying a home and want to see whether a conventional loan fits your file, Lendmire can help you compare the options and what each one asks of the file. You can start with its conventional loan programs page.
Money that is documented before you apply is money that stays on the table when the lender totals your file.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B3-4.1-01, Minimum Reserve Requirements
2. Fannie Mae Eligibility Matrix
3. Fannie Mae Selling Guide B3-4.2-02, Depository Accounts
4. Fannie Mae Selling Guide B3-4.2-01, Verification of Deposits and Assets
5. Fannie Mae’s rules on stocks and mutual funds
6. Fannie Mae’s retirement account guidance
7. Fannie Mae Selling Guide B3-4.3-04, Personal Gifts
8. Fannie Mae Selling Guide B3-4.1 General Asset Requirements (index)
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Use Stocks as Collateral for a Conventional Loan? · Can You Double Your Payment on a Conventional Loan Without a Penalty? · Does Renting a Room Count as Income on a Conventional Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.