The Quick Read: Document a super jumbo refinance before your sale, IPO or tender lands by treating loan size and the paper trail as two separate questions: balance and occupancy set how much cash the property can produce, while closing statements, matching wires, a separately titled receiving account and a written use-of-funds statement prove where the money came from and where it goes.
- A liquidity event does not raise the leverage ceiling. It only changes what you must document.
- Expected proceeds that have not arrived do not count as liquid assets, and unvested stock never counts.
- Cash-out proceeds cannot satisfy reserves above the super-jumbo overlay line, so park event funds separately.
- Every loan above $4,000,000 is reviewed case by case before submission.
Why the Event Changes the File, Not the Ceiling
A founder, physician or executive expecting a big payout often assumes the payout will unlock a bigger loan. It does not. Across the wholesale network, the leverage ladder runs on balance size and occupancy. A business sale, an inheritance or a stock windfall changes one thing: the lender wants proof of the money.
That proof matters because large, recent deposits draw questions. Underwriters ask where the money came from, whether it is yours and whether it comes with strings. Unsold equity is invisible to a lender until it turns into documented cash.
So the work splits in two. First, learn how much cash the property can produce. Second, build a file that shows the source of every dollar and the destination of the new proceeds. Lendmire’s piece Is Cash-Out Available at Every Super Jumbo Balance After a Liquidity Event? covers the first question in depth. This article covers the second.
Key Terms Defined
Liquidity event: A moment when illiquid wealth becomes cash, such as a business sale, an IPO, a tender offer, an acquisition or an inheritance.
Super jumbo: A mortgage large enough to sit above standard jumbo sizing. Through select wholesale programs it runs from $300,000 to $30,000,000, subject to full underwriting.
Cash-out refinance: A new loan that exceeds the payoff plus costs and returns money to the borrower.
Proceeds tracing: Following funds from the source account to your account, with matching dates and amounts.
Reserves: Liquid assets left over after closing. Lenders hold them against payment shock.
Seasoning: The waiting period a lender wants between two events, such as buying a property and refinancing it.
Commingling: Mixing event funds, loan proceeds and everyday money in one account. It makes tracing harder.
What Size Allows: The Ceiling Before the Paper
Start with the number the paper cannot move. Through select wholesale programs, subject to underwriting, cash-out leverage steps down as the balance climbs. Proceeds are unlimited at or below 60% LTV (loan-to-value, the loan divided by the property’s value). Above 60%, the portfolio non-QM program caps cash in hand at $1,500,000. A bank portfolio program carries twelve-month-statement files to $30,000,000 on its own ladder and publishes no such cap. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
| Balance band | Primary cash-out | Investment cash-out |
|---|---|---|
| $1M-$1.5M | 80% | 75% |
| $1.5M-$2M | 75% | 75% |
| $2M-$2.5M | 70% | 70% |
| $2.5M-$3M | 70% | 60% |
| $3M-$3.5M | 65% | 55% |
| $3.5M-$4M | 65% | 55% |
| $4M-$5M | 60%, on review | 55%, on review |
Second homes run about five points below primary residences at most sizes. Credit minimums also rise with size, and some bands want 720 or 760. Above $4,000,000, every figure is reviewed case by case before submission. The bank program’s ladder begins above $4,000,000 and overlaps the portfolio program to $6,000,000. Above $6,000,000 it stands alone.
Picture a primary residence in the $2,000,000 to $2,500,000 band. Cash-out tops out at 70% there, whether you earned your money through a payout last month or a salary for twenty years. The documentation decides whether you reach that ceiling. It never lifts it.
The Paper Trail, Step by Step
Here is how underwriting treats the file, in the order a broker builds it.
1. Classify the loan. A refinance that returns money is cash-out. That sets the leverage column and the seasoning clock.
2. Anchor the cash-out with the settlement statement. It shows the payoff, the costs and the net cash. The wire that reaches your account should reconcile to it.
3. Trace event funds from source to account. Use closing statements for a business sale, a signed gift letter for a gift and brokerage statements for stock proceeds. Settlement statements, probate records or attorney letters confirm sales, inheritances and legal settlements. Dates and amounts should match from one account to the next.
4. Set up a clean receiving account. Title it in the name that will hold the next investment. Keep payroll and personal bills out. Document every hop between accounts.
5. Write a use-of-funds statement. One page works: the source, the net proceeds, how you will split them and how much liquidity you will keep. Lendmire’s guide How to Document Super Jumbo Cash-Out Proceeds Used to Invest walks through that layout.
6. Show income through an approved path. Options include 12 or 24 months of bank statements, a profit-and-loss method, an asset path or a mix. The next section covers these.
7. Build the entity file if an LLC holds title. More on that below.
Net proceeds usually land lower than borrowers expect. Payoff, costs, any prepayment charge and reserve funding all come out first.
How Income Gets Documented While the Event Is Pending
Anticipated money cannot qualify you on its own. A letter of intent, a signed purchase agreement or a tender notice tells a lender what may happen. It does not show cash in hand. In practice, a file is reviewed on documented income under the applicable program, subject to lender guidelines. These are the main paths.
Bank statements. The lender reviews 12 or 24 consecutive months of personal or business statements. Business statements need at least 25% ownership. Eligible deposits are divided by the statement months after an expense ratio. Fixed ratios vary by business type and staffing level, with higher ratios applying to larger staffs and to product businesses. An accountant-provided ratio also works. Transfers from your own business into your personal account count at 100%. Transaction histories never substitute for statements.
Profit-and-loss method. Income is capped at 80% under this approach.
Asset allowance. This path divides liquid assets by 36, 60 or 84 months. It applies to primary and second homes only, with an 80% maximum. The 84-month divisor is the standalone option and is required above $3,500,000.
Assets-only. There is no DTI test (debt-to-income, your monthly debts against your income). U.S. liquid assets must equal the loan plus closing costs plus sixty months of any net loss on other residential property.
Retirement accounts count at 70%, or 80% at age 59.5 and up. Business funds, gifts, most trusts, unvested stock and cryptocurrency never count toward the asset paths.
Here is the catch. A liquid dollar used as income cannot also count as a reserve. Pick one job for each dollar.
Proceeds, Reserves and the Double-Counting Trap
Reserves are 3 months to $500,000, 6 months to $1,500,000 and 9 months above that. Each additional financed property adds 2 months, up to a 12-month maximum. First-time investors need 12 months. These are typical ranges through select wholesale programs, subject to underwriting.
The trap sits above the super-jumbo overlay line: $3,500,000 on a primary residence and $3,000,000 on a second home or investment property. Past that line the file carries a 700 credit floor, a 0x30x24 housing history and 48-month seasoning on any credit event. It also states that cash-out proceeds cannot satisfy reserves.
So the money coming out of the refinance cannot prove you have money left. Your event funds can, once they are sourced, but only if they stay separate from the cash-out and are not also counted as income. Tracing is simple when each pool of money has one account and one purpose.
Consider a borrower with a large pending payout who refinances to fund a second property. A clean file holds three labeled pools: refinance proceeds earmarked for the purchase, event funds held for reserves and operating accounts for daily life. A messy file shows one account where all three blend. Underwriters can only sort the messy file with a long explanation letter, and the explanation rarely reads as well as clean statements.
Sequencing: Before the Event or After
Closing the cash-out before the event keeps the file simple. The income story runs on existing deposits or assets, and the proceeds trace to one settlement statement. The event funds arrive later and never touch the loan decision.
Closing after the event adds a layer. Recent large deposits now sit in your accounts, so each one needs a source document. Seasoned funds still draw questions. That route can help if you want the funds to count as liquid assets or reserves, though they must be sourced and cannot double up as income.
Neither route is right for every borrower. The stronger play often depends on whether the cash is needed now and whether the event is certain.
What if the event slips or collapses? A closed refinance is sized on the property, so it stands either way. The risk is the plan built on top of it. If you counted on event cash to pay down the new balance or to rebuild reserves, delay hurts. Size the loan so the file works without the event.
Edge Cases Where the General Rule Bends
Balances above $4,000,000. No flat percentage applies. The portfolio program and the bank program may treat the same file differently, and the answer comes from review before submission.
Recent purchases. Cash-out seasoning runs from title recording, not from rehab completion or a lease. Inside the window a file is typically sized on cost basis. After it, appraisal drives sizing. Delayed financing is an exception for all-cash buyers. It is generally capped near documented cost and needs the cash source documented. It generally does not fit a hard-money purchase.
Combining properties. Rolling several properties into one loan can push the balance past the cash-out ceiling for that band.
Primary residence versus investment property. The primary residence gets higher leverage at the same balance. The asset-allowance path is for primary and second homes only.
LLC-held rentals. Expect articles of organization, an operating agreement, an EIN letter and a good-standing certificate, plus a natural-person guarantor, subject to program terms. Names on title, note and insurance should match. Deeding into an LLC before a refinance can raise due-on-sale questions, so vesting at closing is cleaner.
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, and federal commentary treats credit for non-owner-occupied rental property as business purpose. A primary-residence cash-out gets no such treatment, and size alone does not change that.
Coverage on investment files. On an investment property, a larger balance means a larger monthly obligation, so the DSCR (monthly rent divided by principal, interest, taxes, insurance and any HOA dues) falls as the loan grows. Run it on the new balance. Select programs in the network review files below 1.00x coverage, but leverage and terms adjust.
What the Decision Looks Like in Practice
Most borrowers face one of a few choices.
- Refinance now at a modest balance. The file is simpler, and the event funds stay out of the loan picture.
- Wait until the event lands. Funds become documentable assets, but every large deposit needs a source.
- Skip the cash-out. If the event cash covers the next purchase, a refinance may add paperwork with little benefit.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction, as IRS Publication 936 explains for mortgage interest.
A short checklist helps before you apply:
- Closing statement or settlement statement for the event or prior sale
- Statements for the source account and every account the money crosses
- A receiving account titled for the next investment
- A one-page use-of-funds statement
- Entity documents, if an LLC holds title
- Proof of how income will qualify: statements, a P&L or asset schedule
- A separate list of reserve assets that is not double-counted as income
Mistakes that stall files tend to follow a pattern. Commingled accounts, undocumented transfers, reserves counted twice and a balance sized on the event instead of the property are the usual ones. Each is avoidable with an hour of planning.
The brokerage arranges consumer mortgage lending in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Nothing here is a commitment to lend. For a broader view of how these loans fit together, see the complete DSCR loans guide.
Frequently Asked Questions
Can I use expected proceeds from a sale or IPO to qualify?
No. Income qualifies through bank statements, a profit-and-loss method or documented liquid assets. Expected proceeds that have not arrived are not liquid assets, and unvested stock never counts. Once the money lands and is sourced, it can count under the asset paths.
Can the cash-out proceeds count as my reserves?
Not above the super-jumbo line, which is $3,500,000 on a primary residence and $3,000,000 on a second home or investment property. Below it, reserve rules depend on the program and the balance. Keeping event funds separate avoids the issue in every case.
What documents prove the source of event funds?
Closing statements document a business sale, brokerage statements document stock proceeds and a signed gift letter documents a gift. Probate records or attorney letters cover inheritances and settlements. Each should match deposit dates and amounts in your statements.
Does a large payout let me borrow at a higher LTV?
No. LTV caps follow balance, occupancy and transaction type. A primary-residence cash-out in the $2,000,000 to $2,500,000 band tops out at 70% through select wholesale programs, subject to underwriting. Above $4,000,000, the ceiling comes from case-by-case review.
What if the event is delayed after I close the refinance?
The loan stands, because it is sized on the property. The risk is any plan that relied on event cash to pay down the balance or rebuild reserves.
Current guidelines and terms are on Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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References
1. eCFR Regulation Z (12 CFR 1026) commentary
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a Founder With Irregular Distributions Get a Super Jumbo Cash-Out? · How to Get a Super Jumbo Cash-Out as an Executive Paid in Distributions · How to Document a Super Jumbo Cash-Out Used to Invest as a Founder
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.