The Quick Read: Asset-based mortgage programs review your file on liquid assets you can document, so a founder before a liquidity event can use one only with seasoned cash, public securities or retirement balances, because privately held company stock is not an eligible asset on either path, and cash-out leverage is tighter than on a purchase. The right program for your situation depends on what sits in your accounts today, not on what your company is worth on paper. Here is how the underwriting works.
- Path one, asset qualifier: eligible assets, after the credit percentages, must equal or exceed the entire loan. No traditional personal-income documentation, pay stubs or employment verification. The ceiling is 80% on a purchase and 75% on a refinance of a principal residence or second home. Cash-out terms on this path are set by the lender and are not published.
- Path two, asset depletion: usable assets divided by 60 months become a qualifying income that runs through the debt-to-income test. Cash-out tops out at 60% on a principal residence, a second home or an investment property.
- What does not count: privately held stock, stock options and non-vested restricted stock units. A sale or buyout converted to a seasoned cash balance is the documented route.
- Everything is documented: statements, seasoning and full underwriting apply on both paths, through select programs and subject to underwriting.
What Is an Asset-Based Cash-Out Refinance?
It is a refinance that puts cash in your hand, qualified on what you own instead of what you earn. You document balances in bank and brokerage accounts. The lender decides whether those balances carry the loan.
Lendmire arranges these loans as a broker. Its asset-based mortgage programs are placed through select lenders in its wholesale network. Each lender sets its own overlays inside the ranges below. Those differences are why the best program for your situation depends on your assets, your property and your credit, not on one headline number.
Founders are a good fit on paper. Net worth is high and documented income can be lumpy or modest. But “high net worth” and “eligible assets” are different things. Most of the gap between them is company stock.
Key Terms Defined
- Liquidity event: a moment when private company equity turns into cash or tradable shares, such as an acquisition, a public offering, or a secondary or tender sale.
- Cash-out refinance: a new mortgage that pays off the old one and hands you the difference in cash.
- Asset qualifier path: a qualification method where eligible assets cover the whole loan and no income is documented.
- Asset depletion path: a method that converts usable assets into monthly qualifying income by dividing them by 60 months.
- Credit percentage (haircut): the share of an account balance the lender counts. A 90% credit on $100,000 counts $90,000.
- Seasoning: how long funds have to sit in an account, with statements to prove it, before they count.
- LTV: loan-to-value, the loan amount as a percentage of the property’s value.
Why Company Stock Doesn’t Count Before the Event
Privately held company stock is not an eligible asset on either path. That is the rule, with no sliding scale. A cap table, a valuation report or a recent funding round does not change it.
The same goes for stock options. On the asset depletion path, non-vested restricted stock units are also ineligible. Neither path publishes them as counting. Paper wealth stays on paper until it becomes cash.
So the line that matters is before and after. Before the event, an asset-based program works only on what you already hold in accounts. That might be savings from prior salary, an earlier secondary sale, public securities or retirement balances. After the event, a sale or buyout converted to a seasoned cash balance is exactly what these programs are built to read.
Don’t count on the exit to qualify you for a loan you need before the exit. The program cannot see it.
How Underwriting Treats Your Assets, Step by Step
Step 1: Pick the path. A borrower is qualified on one path at a time. Never blend the two sets of rules.
Step 2: Count what is eligible. The lender applies a credit percentage to each balance. Accounts combine.
| Asset type | Qualifier path | Depletion path |
|---|---|---|
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Brokerage / securities | 100% | 80% |
| Retirement accounts | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
These percentages reflect select program guidelines, subject to underwriting.
Step 3: Check seasoning. On the qualifier path, funds need 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. Funds from the sale of a business, an inheritance or a legal settlement are excused from that depletion-path seasoning. That exemption matters for founders after a sale.
Step 4: Test the loan. The qualifier path asks a single question: do usable assets equal or exceed the entire loan? The depletion path asks whether the derived monthly income carries the new housing payment and your other debts through the debt-to-income test. Asset-derived income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Step 5: Check credit and housing history. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
Step 6: Size the loan. The qualifier path reaches $4,000,000. The depletion path runs from $125,000 to $3,500,000. Depletion also carries a minimum: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is your only income source.
Two illustrative calculations
These are examples only, and the lender’s own calculation governs.
On the qualifier path, say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts $330,000), $300,000 in a 401(k) while under 59½ (90% counts $270,000) and $200,000 in savings (100% counts $200,000). Usable assets total $800,000. That is reviewed on assets alone.
On the depletion path, say you hold $1,500,000 in securities (80% counts $1,200,000) plus $300,000 in cash (100% counts $300,000). That is $1,500,000 usable. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts.
The method is a qualifying formula, not a withdrawal plan. Statements Ready makes the same point: the calculation is a formula, and it does not schedule withdrawals from your accounts. Your portfolio stays invested.
Which Path Fits a Founder?
Start with the size of your liquid balance compared with the loan. If usable assets cover the whole loan, the qualifier path is the cleaner fit. You document no employment and no income. If the loan is larger than your usable assets, the depletion path is the only one that can work, because income, not asset coverage, carries the file.
Consumer-education site BestInterest notes that “asset depletion” is an umbrella term, and that divisors differ from program to program. That matches what a broker sees. The 60-month divisor here belongs to this program, not to every lender that uses the phrase.
Here is the quick sort:
| Your situation | Path to look at first |
|---|---|
| Liquid assets cover the entire loan | Asset qualifier |
| Assets are large, loan is larger | Asset depletion |
| Salary plus a big liquid balance | Depletion, supplementing documented income |
| Rental property, cash-out needed | Depletion only (investment property) |
| Mostly company stock, little cash | Neither, until a sale converts it |
The Cash-Out Math: Leverage and Where It Stops
Cash-out is where founders get surprised. The ceilings drop.
On the asset depletion path, cash-out is capped at 60% on a principal residence or second home. On the same path, an investment property tops out at 60% on a cash-out, and 65% on a purchase or rate-and-term refinance. A principal residence or second home on the depletion path can reach 80% on a purchase or rate-and-term refinance.
On the qualifier path, the published ceilings are 80% on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on that path, and at what leverage, is the lender’s call and is not published. Ask before you assume.
One more rule trips people up. Cash-out proceeds never count as qualifying assets. You cannot pull cash from the house and then use that cash to qualify for the same loan.
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.
The investment property case
When the collateral is an investment property, the loan is business-purpose. The Federal Register text of the ability-to-repay rule says business-purpose loans are not covered by those requirements, and treats investment-purpose loans as business-purpose. The Federal Reserve’s Regulation Z supervisory manual adds that purpose is judged by factors, not by a checked box alone. In practice, how you actually use the money matters. Plan on being asked.
Where the General Rule Breaks
Tender or secondary sale proceeds. Once the cash lands in a regulated account and stays, it counts at its percentage. On the depletion path, sale-of-business funds skip the 120-day statement rule. On the qualifier path, they still need 60 days and two months of statements.
Crypto, precious metals and collectibles. These are not published as eligible on either path. The route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Pledged or borrowed funds. Money from a stock-backed or pre-IPO loan is borrowed money, and borrowed funds are not published as eligible. Pulling a loan against your shares to build a balance does not solve the qualifying problem.
Ineligible accounts on the depletion path. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand and funds from non-regulated financial companies are all out.
Business accounts. Only the share you own counts, and the lender will review that ownership.
A retirement account under 59½. On the qualifier path it counts at 90%. On the depletion path it counts at 70% at any age. Same balance, different credit.
A first mortgage or housing event. A recent foreclosure or short sale needs four years of seasoning on the depletion path. Check this before you apply, not after.
How Other Routes Compare
A cash-out refinance on a home is one way to turn wealth into cash before an exit. It is not the only one. Each option below is described by its own rules, not this program’s.
| Option | Collateral | Do you sell shares? | Main tradeoff |
|---|---|---|---|
| Asset-based cash-out refinance | Your home or rental | No | Only eligible assets count |
| HELOC (bank home-equity line) | Your home | No | Underwritten on income |
| Stock-backed or pre-IPO loan | Shares or securities | No | Specialty product, outside this program |
| Secondary or tender sale | Your shares | Yes | Converts equity to cash you can later document |
If the property is a rental and the numbers run on rent instead of assets, there is a separate route. Lendmire’s piece Can a Founder Use a Super Jumbo DSCR Cash-Out Before a Liquidity Event? covers it, and that is a different qualification method from the one here.
Timing: Before and After the Event
Well before the event. Take stock of liquid balances. Do not move money around right before applying, because seasoning counts against fresh deposits. Statements that look the same for 60 days read cleaner than ones that don’t.
Around a sale or tender. Expect your lender to review the source of funds. A sale agreement, a closing statement and the account that received the cash tell the story.
After the event. Cash is now documented cash. The depletion path’s sale-of-business seasoning exemption applies.
If the event slips. Honest answer: the mortgage doesn’t care. The loan is a debt that stays in place whether or not your company exits. Borrow only what your documented cash flow and balances can carry without the event.
(This is where many founders run their own numbers twice. Good habit.)
Who This Program Does Not Fit
It is a poor fit if nearly all your net worth is company stock. It is a poor fit if you need cash-out leverage above the ceilings listed here. It is also a poor fit if your balances are borrowed or pledged.
It is a strong fit if you have sold shares in a tender, hold cash or public securities, and want to borrow on a home without producing tax returns and pay stubs. On a principal residence or second home, the loan is a consumer mortgage. Investment property runs only on the depletion path, and that loan is business-purpose.
What to Gather
- Two months of statements for each qualifying account on the qualifier path.
- Statements at least 120 days old plus the latest within 45 days on the depletion path.
- Sale, buyout or settlement paperwork showing where large deposits came from.
- A current mortgage statement and property details for the home you are refinancing.
- Credit and housing history, including any recent housing event.
Frequently Asked Questions
Can my private company shares count toward qualifying?
No. The documented route is a sale or buyout converted to a seasoned cash balance. After the event, that cash counts at its percentage.
Do I need tax returns or pay stubs?
Not on the qualifier path, where assets cover the entire loan and no employment or income is documented. You still provide statements, and the file is fully underwritten. On the depletion path, derived income runs through the debt-to-income test.
What cash-out leverage is available?
On the depletion path, 60% on a cash-out of a principal residence, second home or investment property. On the qualifier path, the lender sets cash-out terms and does not publish them. Subject to underwriting in each case.
Can I use cash-out proceeds to qualify?
No. Cash-out proceeds never count as qualifying assets. The lender looks at balances you hold before the loan.
Which program is best for a founder?
The best program for your situation depends on your liquid balances, loan size, property type and credit. A broker shops select lenders in a wholesale network and matches the file to the guidelines it fits.
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. Program figures here are typical ranges through select programs, not offers, and not a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker. It arranges asset-based consumer mortgages through select lenders in its wholesale network, and it does not lend. The program is available in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
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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. Statements Ready: Asset depletion loan
2. BestInterest: Asset depletion mortgage
3. Federal Register: Ability-to-Repay and Qualified Mortgage Standards final rule
4. Federal Reserve: Regulation Z supervisory manual
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 Much Cash Can a New Mexico Homeowner Take Out on an Asset Depletion Refinance? · Can You Get an Asset-Based Mortgage on a Tennessee Condo? · Best Asset-Based Cash-Out Refinance Program When Your Income Is Lower Than Before
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.