The Quick Read: Sale proceeds are an asset rather than income, and the right asset-based mortgage lets those balances carry the application, either by covering the whole loan outright or by being converted into a monthly qualifying income, subject to underwriting and lender guidelines.
- 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 that runs through a debt-to-income test.
- A borrower is qualified on one path at a time, and the two sets of rules are never blended.
- The money must be documented and sitting in your own account, because “no income documentation” never means “no documentation.”
- If the next property is a rental, a different product (DSCR) applies, and it qualifies primarily on the property’s rental income covering the payment, subject to lender guidelines.
Can You Really Get a Mortgage With No Paycheck?
You can, through select programs, but you need balances large enough to do the job of income. A retiree, a business seller, or a household living off a portfolio often has plenty of wealth and almost no documented earnings. A standard payroll-based mortgage reads that profile poorly, because it asks for pay stubs and traditional personal-income documentation.
Asset-based programs read the same file differently. They ask how much usable money you hold and how well it is documented. Across Lendmire’s wholesale network, a few lenders offer these programs for principal residences and second homes. The asset depletion path also reaches investment property.
Lendmire’s consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Lendmire acts as the broker, arranging the loan through select lenders. It does not lend directly, and every file is underwritten individually.
Net Proceeds: What You Actually Have to Work With
Your closing statement shows the number that matters. Gross proceeds are the sale price. Net proceeds are what lands in your account after the payoff of your old loan, commissions, and closing costs.
Underwriters count the net figure, and only once it has actually arrived in an account titled in your name. Money still in transit, held by an attorney, or owed to anyone else does not count.
The settlement statement is the document that ties a large deposit to a real sale. A big deposit with no paper trail is the usual cause of a stalled file. Keep the statement, and keep the wire or deposit record that shows the transfer.
How Underwriting Treats the Money, Step by Step
Underwriting is a short sequence of questions. Each answer decides which path fits.
1. Where did the funds come from? The lender looks for a documented source such as the sale statement.
2. Are the funds eligible? Each account type counts at a set percentage of its balance, and some types do not count at all.
3. Are the funds seasoned? Both paths want a statement history that shows the money sitting in your account.
4. Which path fits? Either the assets cover the whole loan or they are converted into income.
5. Does credit clear? A credit review still happens. No program skips it.
6. Is the property eligible? Appraisal and occupancy rules still apply.
Sale proceeds sit in a savings or money market account, which counts at 100% on the asset qualifier path. The depletion path counts cash accounts at 100% as well. That makes cash proceeds the cleanest asset a lender sees.
Path One: Assets Cover the Whole Loan
On the asset qualifier path, eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. The lender’s ability-to-repay review rests on the assets.
Leverage reaches up to 80% loan-to-value on a purchase and 75% on a refinance, for a principal residence or second home. Loans run up to $4,000,000, subject to underwriting. The credit floor is 600. Housing history is reviewed at 0x30x12, and one 30-day late in the last twelve months is considered case by case.
Here is how the balances count on this path:
- Brokerage accounts, certificates of deposit, money market, and savings count at 100%.
- Retirement accounts (401(k) and IRA) count at 90% under age 59½ and 100% at 59½ or older.
- Different accounts combine.
An illustration shows the shape. Take an $800,000 loan. Suppose the borrower holds $330,000 in brokerage accounts (100% counts as $330,000), $300,000 in a 401(k) under 59½ (90% counts as $270,000), and $200,000 in savings (100% counts as $200,000). That is $800,000 of usable assets, which is reviewed on assets alone. The lender’s own calculation governs, and this is illustrative only.
Seasoning here is 60 days, with two months of statements for each qualifying account. No reserves are required at or below 75% loan-to-value, and above that the lender sets them.
Path Two: Assets Become Qualifying Income
The asset depletion path works differently. Eligible assets, after the haircuts, are added up and divided by 60 months. The result is a monthly qualifying income that must carry the housing payment and other debts through the debt-to-income test.
Take $1,500,000 in securities (80% counts as $1,200,000) plus $300,000 in cash (100% counts as $300,000). That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then carries the full housing payment and other debts through the test. Again, the lender’s calculation governs.
Haircuts on this path:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Several things do not count: 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.
Minimums are higher here. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 liquid when depletion is the only income source. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does.
Program Parameters at a Glance
The figures below are typical ceilings and floors from select programs, subject to underwriting. They are not offers.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How assets are used | Cover the whole loan | Divided by 60 months into income |
| Purchase leverage | Up to 80% | 80% (residence or second home); 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 |
| Seasoning | 60 days, two months of statements | Statements 120 days old, plus one within 45 days |
On the depletion path, investment property runs 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. A first-time investor on the depletion path needs a 700 score. A housing event needs 4 years of seasoning there, and multiple bankruptcies are not eligible.
Where the Seasoning Rule Catches Sellers
Seasoning is the quiet obstacle for people who just sold a home. The depletion path wants statements 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 rule. A home sale is not on that list.
That matters for sequencing. Proceeds that arrived last month may not satisfy the 120-day history on the depletion path. The qualifier path asks for only 60 days and two months of statements, so it often fits a recent seller better. Which path suits you depends on your balances and the loan size. A broker who sees several lenders’ guidelines can compare them for your timing.
Plan the deposit date before you plan the purchase. If your settlement is still ahead, open the account that will hold the money early, and avoid moving it between accounts. Each move adds a new paper trail to explain.
The 1031 Edge Case: Money You Cannot Touch Yet
If you sold a rental and plan a 1031 exchange, a qualified intermediary holds the funds. Those funds are not your personal liquid assets while the intermediary holds them. The Real Estate CPA notes that if the money touches your account, even for a day, the exchange is blown.
The deadlines are firm. The IRS Form 8824 instructions say replacement property must be identified within 45 days and received within 180 days, or by the tax-return due date including extensions, whichever is earlier. Those are tax-code deadlines, not loan timelines.
The practical lesson is to line up your lender before you sell. Exchange money held by the intermediary cannot double as your reserves. Exchange funds that were never used and are later released to you may count as a personal asset, but that is program-specific.
A primary-home sale is a different matter, because a 1031 exchange applies to investment property. Tax treatment varies; consult a qualified professional.
Cash, Financing, or a Mix
Many sellers first ask whether to simply pay cash. The answer depends on how much liquidity you want to keep. Paying cash is simple, but it locks money into a single asset. Financing keeps balances available, though it adds a payment.
| Approach | What you keep | The tradeoff |
|---|---|---|
| Pay all cash | A clean title and no payment | Liquidity drops sharply |
| Finance with the asset qualifier path | Most of your savings stay liquid | Assets must cover the whole loan |
| Finance with the asset depletion path | Assets stay invested | Income is derived, and the payment must fit the test |
| Put down a larger share | A smaller loan | Less cash left for emergencies |
Pay cash if the purchase is a modest share of your net worth and you want no payment in retirement. Finance if the home is large relative to your balances, or if you prefer to keep money invested and liquid. A mix often works best, with a bigger down payment that shrinks the loan without draining the account.
What If the Next Property Is a Rental?
Most of what is above is for a home you will live in, or a second home. If the next property is a rental, the program changes. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The Federal Register’s final ability-to-repay rule treats investment-purpose loans as business-purpose credit.
That is why “no income” is not a barrier on a DSCR loan. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, cash to close, reserves, and entity paperwork still matter. You also cannot live in the property.
DSCR is a separate product from asset depletion, and it should not be treated as the same mechanic. A seller with no paycheck can use sale proceeds as the down payment and reserves on a rental. Lendmire’s complete DSCR loans guide covers the mechanics.
If your goal is a luxury rental, see Lendmire’s piece How to Buy or Cash Out a Luxury Rental When You Have No Current Income. Self-employed sellers with 1099 earnings may find more relevant detail in the article Can You Buy a Home With 1099 Income and No Tax Returns?.
Who This Fits, and Who It Doesn’t
The strongest fits are cash-heavy, income-light households:
- Retirees living on a portfolio.
- Business owners who just sold a company.
- Heirs who received an inheritance.
- Early-retired professionals.
- Recipients of a legal settlement.
Younger borrowers also qualify if the balances are large, because age is not the test.
The fit weakens when most of your wealth is in assets these programs do not list. Cryptocurrency, precious metals, collectibles, and borrowed or pledged 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.
It also weakens when your balances are modest. The depletion path’s asset minimums exist because the math needs substantial balances to produce meaningful income. If the file falls short, a smaller loan, a larger down payment, or a different product may fit better.
Key Terms Defined
Net proceeds: The cash you receive from a sale after the payoff, commissions, and closing costs.
Asset qualifier path: A program path where eligible assets alone must cover the entire loan amount.
Asset depletion path: A program path where usable assets divided by 60 months become qualifying monthly income.
Seasoning: The length of time money has sat in your account, shown by statements.
Haircut: The percentage reduction applied to an asset’s balance, such as securities counting at 80%.
Qualified intermediary: A third party that holds sale funds during a 1031 exchange.
Common Mistakes
- Spending the proceeds before applying. Balances that shrink after closing can leave you short.
- Moving money around. Each transfer adds a trail to explain, and large transfers draw questions.
- Counting assets that do not qualify. Foreign funds, cash on hand, and stock options do not count on the depletion path.
- Holding exchange money as reserves. Funds with an intermediary are not yours yet.
- Treating a bank statement loan as the right tool. That program is for borrowers who document income with deposits.
- Assuming no credit review. Every program runs credit.
Frequently Asked Questions
Do sale proceeds count as income?
No, they count as assets. The qualifier path uses them to cover the loan, and the depletion path converts them to income by dividing usable assets by 60 months. They never count as earned income on any application.
Do I have to buy another home with my proceeds?
No. Federal tax rules do not require you to reinvest, and lending is a separate matter. The practical question is how you want to hold the money. Keep the settlement statement and funds trail either way, since a lender will want both.
Does a 401(k) count toward qualifying?
Yes, on both paths, though at different percentages. The qualifier path counts retirement accounts at 90% under 59½ and 100% at 59½ or older. The depletion path counts them at 70% at any age. You do not have to withdraw the money, subject to underwriting.
Can I use 1031 exchange funds as my down payment?
Not while a qualified intermediary holds them. Those funds are not your personal liquid assets yet. After the exchange ends, any released funds may count as personal assets, depending on the program.
What is the difference between this and a DSCR loan?
An asset-based mortgage is a consumer loan for a home you live in, and it is reviewed on your assets. A DSCR loan finances a rental and qualifies primarily on the property’s rent covering the payment, subject to lender guidelines. Ask a broker which fits before you shop.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. The Real Estate CPA, guide to 1031 exchanges
3. Federal Register, ATR/QM final rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does an Asset Depletion Loan Require Any Income? · How Asset Depletion Converts Savings Into Qualifying Income · Dividend Income vs Asset Depletion for a Second Home Jumbo Loan
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.