The Quick Read: Privately held company stock is not an eligible asset on either path. On the asset depletion path the new loan is capped at 60% of appraised value, so the cash that reaches your business is that 60% figure minus your existing mortgage payoff, closing costs, and any liens that must be paid off, subject to underwriting and select programs.
- On the asset depletion path, cash-out leverage is up to 60% on a principal residence, a second home, or an investment property.
- On the asset qualifier path, leverage on a refinance is up to 75%, and the lender decides the cash-out terms.
- A low appraisal shrinks the cash dollar for dollar, because the cap applies to appraised value.
- Privately held company stock is not an eligible asset on either path.
How the Number Gets Built
The cash you receive is a subtraction problem. Start with appraised value, apply the leverage cap, then take out everything the new loan must pay first. What is left goes to your account.
| Step | What happens |
|---|---|
| Appraised value | Sets the base for the cap |
| Leverage cap | 60% on the depletion path cash-out |
| Existing payoff | Old mortgage is paid first |
| Liens and penalties | Second liens and any prepayment charge come out |
| Closing costs | Deducted from proceeds |
| Net cash | What is left for the expansion |
No fixed dollar cap exists on the proceeds. The cap is a percentage of value, and the loan must also sit inside the program’s loan-amount range. On the depletion path that range runs from $125,000 to $3,500,000, subject to underwriting.
Paying off a second lien that was not used to buy the home counts as part of the cash-out, even if no money comes back to you. Plan around that if a home equity line sits behind the first mortgage.
Which Path Controls the Ceiling?
Your path decides the cap, and a borrower is qualified on one path at a time. The asset qualifier path covers the entire loan with eligible assets and documents no employment or income. The asset depletion path divides usable assets by 60 months to create a qualifying income, and that income runs through the debt-to-income test.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How you qualify | Assets cover the whole loan | Assets become monthly income |
| Purchase leverage | Up to 80% | Up to 80% (65% on investment property) |
| Refinance leverage | Up to 75% | 80% rate-and-term (65% on investment property) |
| Cash-out leverage | Lender-set, not published | 60% |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
The depletion path is the one with a published cash-out figure, so it is the one you can plan a draw around. The qualifier path is attractive for its simplicity: no traditional personal-income documentation, pay stubs, or employment verification. Anyone who wants cash from the refinance should ask early what the lender will allow there, because that answer is not something to assume.
One more rule shapes the math. Cash-out proceeds never count toward the assets that qualify you. You must qualify on the balances you already hold, then receive the draw on top.
Three Sizing Examples, Expressed in Percentages
The simplest way to size a draw is to work in percentages of appraised value. Read each example as points of value, not dollars. All three use the depletion path’s 60% cash-out cap and are illustrative only. Closing costs reduce each result further. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Ample equity. The home appraises at 100 points and the existing mortgage is 40. The cap allows 60, so 20 points come out before costs. That is the entire gross draw, regardless of how much the expansion needs.
Thin equity. The existing mortgage is 55 points against the same 100. Only 5 points remain under the 60% cap, so the refinance may not justify its own costs. Here the cash-out path may be the wrong tool.
Low appraisal. You expected 100 points of value with a 40-point mortgage, planning on a 20-point draw. The appraisal lands at 90. The cap now allows 54, and 54 minus 40 leaves 14. A 10% shortfall in value cut the draw from 20 points to 14, a 30% reduction.
The third case is why a budget built on the maximum number is fragile. Build in room for an appraisal that lands lower.
Which Assets Qualify You in the First Place?
You must still qualify on assets before any cash-out math applies. Credit for each asset type depends on the path.
On the qualifier path, the share of the balance that counts is 100% for brokerage accounts, certificates of deposit, money market, and savings. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Eligible assets after those credits must equal or exceed the entire loan amount. Accounts combine.
An illustration: an $800,000 loan backed by $330,000 in brokerage accounts (100% counts), $300,000 in a 401(k) under 59½ (90% counts, or $270,000), and $200,000 in savings (100% counts) shows $800,000 of usable assets. That is reviewed on assets alone, subject to underwriting.
On the depletion path, cash accounts and certificates of deposit count at 100%, securities at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Take $1,500,000 in securities (80% counts, or $1,200,000) plus $300,000 in cash (100% counts). That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income, which must then carry the housing payment and other debts through the debt-to-income test. The lender’s own calculation governs.
Seasoning differs by path. The qualifier path asks for 60 days of seasoning and two months of statements for each account. The depletion path wants statements at least 120 days old at application plus the most recent statement within 45 days. Inheritance and legal-settlement funds are excused from that seasoning on the depletion path, and so are sale-of-business funds.
Depletion-path minimums matter for larger draws. 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 your only income source. Credit follows the lender’s matrix on the depletion path and starts at a 600 score on the qualifier path. A first-time investor on the depletion path needs a 700.
What If the Company Is Your Biggest Asset?
Privately held company stock is not an eligible asset on either path. Founders and shareholders often have net worth concentrated in their own company, and that value does not count toward qualifying.
The documented route runs through liquid assets. Proceeds from a sale or buyout, converted to a seasoned cash balance in a regulated account, count at their full share. Public securities and retirement accounts count at their credits.
Cryptocurrency, precious metals, collectibles, and pledged or borrowed funds are in the same position as company stock: none are published as eligible on either path. The route for them is to convert them to a seasoned cash balance, with the source reviewed by the lender.
So a business expansion that depends on equity in the company as collateral is a different financing problem. This program looks at your liquid assets and your home equity, not at your business.
Size the Draw to the Budget, Not the Maximum
Working backward beats working forward. Start from what the expansion needs, then test whether the property can supply it.
1. Total the expansion budget, then add closing costs and any prepayment charge on your current loan.
2. Add your existing payoff and any liens that must be cleared.
3. Divide that combined figure by the expected appraised value.
4. Compare the result to the 60% cap on the depletion path. If it sits above 60%, the cash-out path cannot supply the budget.
5. Re-run the test at an appraisal 10% below expectation.
A bigger loan also raises the monthly obligation, which lowers the debt-to-income cushion on the depletion path. Because the derived income comes from a fixed asset base divided by 60 months, a larger draw can strain the test. Borrowers whose margin is thin should ask for the smallest draw that covers the budget.
Staging helps too. If the expansion is phased, the cash needed in the first stage may be far below the maximum. Taking the full cap up front means paying interest on money that sits idle, and the property carries the risk if the business does not perform.
How Is the Cash Treated as a Business Draw?
The purpose of the funds matters because it shapes how the loan is classified. Federal Regulation Z exempts credit extended primarily for a business, commercial, or agricultural purpose, as the CFPB’s Regulation Z text sets out. That text also says a rental property the owner expects to occupy for more than 14 days in the coming year is not treated as non-owner-occupied. The lender decides how a given file is classified, and the stated purpose is part of that review.
On a principal residence or second home, the program is a consumer mortgage, so consumer mortgage disclosure rules apply. An investment property on the depletion path is a business-purpose loan.
Owner-occupied small rentals follow a split. The Compliance Alliance explains that credit to acquire an owner-occupied rental is business-purpose only above two units, and credit to improve or maintain one only above four. If your collateral is a duplex you live in, that distinction changes the paperwork.
Keep records that tie the cash to the expansion. 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.
When Another Route Fits Better
A cash-out refinance replaces your first mortgage with a larger one. A home equity line instead adds a second lien and leaves the first mortgage in place. If your existing loan is one you want to keep, the line may leave more of your current structure intact. If the draw is small relative to your balance, the cost of replacing the entire first mortgage deserves scrutiny.
Equity pulled through this program is also tied to your assets. The depletion path rewards borrowers with large balances and little documented income. If you document strong income, a program built on income may fit better, and that is a separate comparison worth running. The asset-based mortgage program covers how Lendmire’s network structures both paths, which helps when deciding whether this route matches your profile.
The honest flip point is simple. If the draw you need is a small fraction of the property’s value and your balances are modest, a smaller loan product may beat a full refinance. If the draw is large and your liquid assets are deep, the asset-based route becomes more practical.
Key Terms Defined
Cash-out refinance: A new mortgage that pays off the old one and returns the difference to the borrower as cash.
Asset qualifier path: Qualification where eligible assets must equal or exceed the whole loan and no employment or income is documented.
Asset depletion path: Qualification where usable assets divided by 60 months become monthly income for the debt-to-income test.
Usable assets: The share of each balance that counts after the program’s credit percentages.
Seasoning: The period funds must sit in an account, supported by statements, before they count.
Net cash: What remains after the payoff, liens, penalties, and closing costs come out of the new loan.
Frequently Asked Questions
Can the asset qualifier path give me cash-out for a business expansion?
Possibly, but the cash-out allowance on that path is set by the lender and is not published. Seventy-five percent is the ceiling for a refinance on that path, not a cash-out figure. A broker can ask select lenders what they allow for your file. The depletion path has a published 60% cash-out cap, which makes it easier to plan around. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Do cash-out proceeds help me qualify or count toward my assets?
No. Cash-out proceeds never count as qualifying assets. You qualify on the balances you already hold, and the draw arrives afterward. That also means you cannot recycle one refinance’s proceeds into the next file’s asset total.
Does my business’s revenue affect how much I can take out?
The program rests on your assets and the property’s value, not the business’s income. On the qualifier path no income is documented. On the depletion path, income is derived from assets, and documented income can supplement it up to a 45% debt-to-income ratio. Every file is fully underwritten, subject to lender guidelines.
Can I count shares in my private company toward the assets?
No. If you sold part or all of the company, the proceeds converted to a seasoned cash balance in a regulated account can count. Public securities count at 80% on the depletion path.
What is the largest loan this could involve?
The qualifier path reaches $4,000,000 and the depletion path runs from $125,000 to $3,500,000. The cash you take out is limited by the leverage cap on top of the loan range. Both are ceilings, not offers, and approval depends on underwriting.
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. Consumer lending for this program is licensed in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Lendmire is a broker and arranges loans through select lenders, so any figure here is a program ceiling, not a commitment to lend.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB, Regulation Z §1026.3 (business-purpose exemption)
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset-Based Cash-Out Refinance Requirements After Selling a Business · Best Asset-Based Cash-Out Refinance Program to Fund Spec Home Construction · How to Qualify and Apply for an Asset-Based Cash-Out Refinance as a Retiree
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.