The Quick Read: No. Privately held company stock is not an eligible asset on either path, so a pre-liquidity founder gets approved only by qualifying on documented liquid assets, such as seasoned cash, public securities and retirement accounts, through select programs and subject to underwriting and lender guidelines.
- A paper valuation, a funding round or a term sheet adds nothing to the file until the stock is sold and the money sits in a seasoned account.
- Unvested restricted stock units and stock options are not eligible on the asset depletion path.
- Cash-out is the tighter side of both paths: the asset depletion path caps it at 60% loan-to-value on a home, second home or investment property.
- A founder with a modest salary and real liquid savings can still qualify, because the file rests on the statements.
- A sale, buyout or secondary that lands in a regulated account is the event that changes the answer.
Why Do Equity-Rich Founders Get Stuck?
A founder’s net worth often sits in a stock that nobody can sell. Underwriting measures what the file can show today: cash, securities and documented income. A private company’s valuation is an opinion about the future, and the stock cannot be spent or pledged to a lender in the same way.
The result is a founder who feels wealthy and files as income-light. Salary is often small by choice. The brokerage account is thin because every spare dollar went into the company. Asset-based underwriting was built for cash-heavy, income-light borrowers, but it only sees the assets that sit in statements.
That is the gap this article is about. The route runs through documented liquid assets, and the sections below show how to read them.
What Counts and What Doesn’t
Only assets in regulated accounts count, and each path applies its own percentages. The asset qualifier path requires eligible assets to equal or exceed the entire loan amount. The asset depletion path converts eligible assets into monthly income. A borrower is on one path at a time, so never blend the two columns below.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage / securities | 100% | 80% |
| Cash, savings, CDs, money market | 100% | 100% (cash, CDs) |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not published | 60% |
| Stock options, unvested RSUs | Not published as eligible | Not eligible |
Percentages are the share of the balance that counts, through select programs and subject to underwriting. Money-market and savings balances follow the same 100% treatment as cash on the qualifier path.
Two rows deserve a closer look. Stock options and non-vested RSUs are excluded outright on the depletion path. Crypto, precious metals, collectibles and borrowed or pledged funds are not published as eligible on either path.
The documented route for any of those is conversion into a seasoned cash balance in a regulated account. The lender reviews where that money came from.
How Does Cash-Out Change the Rules?
Cash-out is stricter because the borrower takes equity out instead of only swapping one loan for another. The lender therefore wants more cushion and a clearer paper trail. Across the wholesale network Lendmire works with, the two paths treat that cushion differently.
Asset qualifier path. The assets must cover the whole loan, and no employment or income is documented. Leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home, with loans up to $4,000,000. Credit starts at a 600 minimum score. Reserves are not required at or below 75% loan-to-value. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published, so a founder should ask before building a plan on it.
Asset depletion path. Eligible assets, after the percentages above, are divided by 60 months into a qualifying income. That income carries the full housing payment and other debts through the debt-to-income test, which is simply the share of monthly income that goes to debt. Cash-out sits at 60% loan-to-value on a principal residence, second home or investment property. Purchases and rate-and-term refinances reach 80% on a home or second home and 65% on an investment property. Loan amounts run from $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor needs a 700 score.
Cash-out proceeds never count as qualifying assets. A founder cannot borrow against a home and then use that cash to qualify for the same loan.
The depletion path also carries minimum assets: the lesser of $1,000,000 or 1.25 times the loan balance. When asset-derived income is the only income source, liquid assets can never fall below $250,000. These are floors, not offers, and every file is underwritten individually.
Lendmire’s asset-based mortgage programs are placed through select lenders in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington.
Pre-Liquidity, Partial Liquidity and Post-Liquidity
Your answer depends on how much of your wealth has already turned into cash. The same founder can move from a no to a workable file by selling a slice of stock and letting the proceeds season. Here is how the situations map.
| Situation | Where the file stands | Next step |
|---|---|---|
| Only private stock, options or unvested RSUs | Nothing eligible to count | Wait for a sale, or document income another way |
| Some cash plus mostly paper equity | Only the liquid part counts | Test the depletion path on the liquid balance |
| Completed secondary or buyout, funds in a regulated account | Proceeds count at the account’s percentage | Season the funds and gather statements |
| Public shares after a listing | Securities count at 100% or 80% by path | Move shares into a documented brokerage account |
| Lock-up still running | Shares cannot be sold yet | Plan the file around the sale date |
Seasoning is the waiting period a lender wants before funds count. The qualifier path asks for 60 days and two months of statements per account. The depletion path wants statements at least 120 days old at application plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that statement-age rule on the depletion path. A partial sale of stock is reviewed for its source, so ask the lender how a secondary will be treated before you sell.
Selling stock also creates tax consequences. Tax treatment varies; consult a qualified professional.
The founder who has already sold some stock has a decent shot. The founder who holds only paper has a timing problem, not a credit problem.
A Worked Example
Picture a founder who holds private company stock, a securities account and some cash. The private stock counts for nothing on either path. The numbers below are illustrative, and the lender’s own calculation governs.
- Securities: $1,500,000, counted at 80% = $1,200,000.
- Cash: $300,000, counted at 100% = $300,000.
- Usable assets: $1,500,000.
- Monthly qualifying income: $1,500,000 divided by 60 months = $25,000.
That $25,000 then has to carry the housing payment and other debts through the debt-to-income test. Cash-out on this path would be limited to 60% loan-to-value on the property. Underwriters also check credit, housing history and the minimum-assets rule described above.
Now see what the founder’s private stock did to the file: nothing. If that stock is sold and the proceeds season in a regulated account, the same math improves with every dollar that lands there.
Compare the qualifier path. An $800,000 loan with $330,000 in brokerage accounts (100%), $300,000 in a 401(k) under age 59½ (90% = $270,000) and $200,000 in savings (100%) counts $800,000 of usable assets. That is reviewed on assets alone, with no traditional personal-income documentation, pay stubs or employment verification. It is a purchase-style example, since cash-out on that path is lender-set.
What If the Collateral Is a Rental?
Rental collateral can follow a different route. If the property is a non-owner-occupied rental, a DSCR loan may fit better than an asset-based one. DSCR stands for debt service coverage ratio, and it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The founder’s salary and private stock do not enter that test.
Loans on a non-owner-occupied rental are business-purpose loans. According to the CFPB’s Truth in Lending guide, credit to acquire or improve non-owner-occupied rental property counts as business-purpose credit. The Federal Register notice on the ability-to-repay rule says business-purpose loans fall outside that rule. It also treats investment-purpose loans as business-purpose loans.
That does not mean fewer rules on the file. It still involves credit, appraisal, reserves and a signed statement of purpose. Occupancy matters too. Doss Law explains that a property the owner expects to occupy for more than 14 days in the coming year is treated as consumer credit, unless it has more than two housing units. A founder’s own home is never a DSCR candidate.
Other alternatives exist when income is thin on paper. The bank statement program is for borrowers who document income with deposits, which can fit a founder who pays the business and draws regularly.
A word on stock-backed loans. Funds borrowed against private shares are pledged or borrowed funds, which are not published as eligible on either path. They create cash, but they do not create qualifying assets.
Preparing the File
Start with the account that will carry the file, then build backward. A clean paper trail matters more than a large balance.
1. Pick the path. Assets that cover the loan outright point to the qualifier path. Assets that become income point to the depletion path.
2. Move sale proceeds into a regulated account and keep every transfer traceable.
3. Gather statements. Plan on two months per account on the qualifier path. On the depletion path, have statements at least 120 days old and a fresh one within 45 days.
4. Check credit and housing history. Housing history of 0x30x12 is the target, and one 30-day late in the last twelve months is considered case by case.
5. Check the minimums. On the depletion path, test the lesser-of $1,000,000 or 1.25 times the loan, and the $250,000 liquid floor.
6. Ask about timing. Apply before you leave a salaried job if you can, and ask the lender how a pending sale will be treated.
Lendmire’s asset-based cash-out refinance requirements for a founder before a liquidity event walks through the document list in more detail.
Who This Isn’t For
This path is not for a founder whose wealth is entirely private stock with little cash. It is also not for a borrower hoping to use loan proceeds or a stock-backed loan as the qualifying assets. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
If that is your picture, the honest advice is to wait for a sale or look at income-based options. Applying early and stacking declined files helps nobody. The strongest founder files tend to arrive after the proceeds have already seasoned.
Key Terms Defined
Asset qualifier path: the route where eligible assets, after the credit percentages, must equal or exceed the whole loan amount.
Asset depletion path: the route where usable assets are divided by 60 months to create a qualifying income.
Cash-out refinance: a new loan that pays off the old one and hands the borrower extra cash from equity.
Seasoning: the waiting period before funds or ownership count toward qualifying.
Pre-liquidity founder: a founder whose wealth is still in private company stock that has not been sold.
Debt-to-income ratio: the share of monthly income that goes to debt payments.
Frequently Asked Questions
Does startup equity count as an asset?
Privately held company stock does not count on either path. Unvested restricted stock units and stock options are excluded outright on the asset depletion path, subject to underwriting. Equity counts only after a sale turns it into cash in a regulated account.
Can cash-out proceeds qualify me?
Proceeds from a cash-out refinance never count as qualifying assets on the depletion path. The assets must already exist in your accounts before you apply. A founder planning to borrow first and qualify second will not get there that way.
Can I use a stock-backed loan to qualify?
Pledged or borrowed funds are not published as eligible on either path. The documented route is converting the money to a seasoned cash balance in a regulated account, with the source reviewed by the lender. Treat any borrowing against shares as a separate decision from the mortgage.
What changes after a secondary sale or acquisition?
Proceeds that land in a regulated account become cash, which counts at 100% on both paths. Sale-of-business funds are excused from the 120-day statement-age rule on the depletion path. A partial secondary is reviewed for its source, so confirm the treatment first.
Should I apply before or after leaving my job?
Apply while documented income exists if you may need it as a backup, since asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived. If you plan to qualify on assets alone, the salary matters far less than the balances.
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. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
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.
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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 Truth in Lending Act guide
2. Federal Register: Ability-to-Repay and Qualified Mortgage Standards
3. Doss Law: 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: Top Asset-Based Cash-Out Refinance Providers With No Income Verification · Asset-Based Cash-Out Refinance Requirements on a Non-Warrantable Condo · Best Asset-Based Cash-Out Refinance Program for a Founder Before a Liquidity Event
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.