The Quick Read: Lenders test seasoned, documented liquid assets instead of income, and they do it one of two ways. Either eligible assets must cover the entire loan, or usable assets are divided by 60 months into qualifying income that must carry the housing payment and other debts. The sale proceeds must sit in a personal account, and the cash pulled out never counts as a qualifying asset.
- A borrower is reviewed on one path at a time: assets that cover the whole loan, or assets converted to income.
- The file has no traditional personal-income documentation, pay stubs or employment verification, but it is fully underwritten. Assets are documented with statements.
- Privately held company stock is not an eligible asset on either path. The sale has to become cash.
- Earnouts, escrow holdbacks and seller notes count only after they are paid out and documented.
- Terms are subject to underwriting and offered through select programs.
Key Terms Defined
Asset qualifier path: the route where eligible assets, after the credit percentages, must equal or exceed the entire loan amount, with no employment or income documented.
Asset depletion path: the route where usable assets divided by 60 months become monthly qualifying income, which then runs through the debt-to-income test.
Usable assets: each account’s balance multiplied by the share the program counts. The part that does not count is the haircut.
Seasoning: how long funds have been documented in the borrower’s account before application.
Qualifying income: a calculated figure, not a paycheck. It is a convention for underwriting, not a withdrawal plan.
Why a Sale Changes How Underwriting Reads You
A business sale leaves a borrower rich in cash and thin in documented income. Income-based underwriting looks backward at tax returns and pay history. After a sale, those documents describe a company the borrower no longer owns, so the file can look weaker than the balance sheet really is.
Asset-based underwriting fixes that mismatch. It asks a different question: can the borrower’s verified liquid wealth support this loan? The answer comes from statements, not employment records.
This is not the same as a bank statement program, which suits borrowers who document income through deposits. It is also not rent-based investor financing, where the property’s rent carries the loan. Here the borrower’s own seasoned assets carry it. Lendmire’s asset-based mortgage programs are built around that second test, and they are offered through select lenders in its wholesale network.
The Underwriting Sequence, Step by Step
Across the wholesale lenders Lendmire works with, the review follows a fairly consistent order.
1. The sale closes and proceeds land. The money must sit in a personal account at a regulated institution. Proceeds left in a business account do not count as liquid assets.
2. The borrower picks a path. Assets either cover the whole loan or become income. The two are never blended.
3. Each asset gets its share applied. Cash counts at 100%. Securities and retirement accounts count at lower shares, shown in the next sections.
4. Usable assets are totaled. On the qualifier path, the total is compared to the loan amount. On the depletion path, it is divided by 60 months.
5. The seasoning check runs. Statement rules differ by path and are covered below.
6. Collateral and leverage are set. Property type, occupancy and transaction type cap the loan-to-value ratio.
7. The cash-out is sized. Proceeds are never counted as qualifying assets, so taking cash out does not improve the borrower’s position.
That last point surprises people. A cash-out refinance does not manufacture qualifying assets. The borrower is reviewed on what they already hold, then draws equity from the property.
Two Paths, Side by Side
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Test | Assets cover the entire loan | Assets divided by 60 months |
| Property | Principal residence, second home | Also investment property |
| Loan amount | Up to $4,000,000 | $125,000 to $3,500,000 |
| Seasoning | 60 days, two months of statements | Statements 120 days old plus one within 45 days |
| Credit | 600 minimum | The lender’s matrix |
Leverage differs by path, and every figure is subject to underwriting.
On the qualifier path, a principal residence or second home can reach 80% loan-to-value on a purchase and 75% on a refinance. Whether cash-out proceeds are allowed on that path, and at what leverage, is set by the lender and is not published. No investment property is offered on this path.
On the depletion path, a principal residence or second home can reach 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. An investment property reaches 65% on a purchase or rate-and-term refinance and 60% on a cash-out. For a seller pulling cash out of a rental, the depletion path is the one that applies.
Which Assets Count, and At What Share
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, cash accounts and certificates of deposit count at 100%. Securities count at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are not eligible. Neither are funds from non-regulated financial companies.
The regulatory backdrop matches the logic. Federal ability-to-repay rules allow a creditor to base its decision on assets other than the dwelling that secures the loan, and they require third-party records to verify those assets. The rule counts assets other than the value of the dwelling itself. That is why the equity in the house being refinanced cannot be the asset that drives lender review.
Some asset classes are not published as eligible on either path: cryptocurrency, precious metals, collectibles and business accounts beyond the borrower’s ownership share. Pledged or borrowed funds are also out. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Documenting the Sale Itself
The statements prove where the money is. The sale paperwork proves where it came from. Underwriters typically want:
- Account statements for every account being counted.
- The purchase agreement and the closing or settlement statement.
- A wire or transfer trail showing the proceeds reaching the personal account.
- Title and payoff documents for the existing lien on the property.
Lenders ask because the file rests entirely on the money being real, owned and accessible. The depletion path normally asks for statements at least 120 days old plus the most recent statement within 45 days, but sale-of-business funds are excused from that 120-day seasoning. The borrower still has to document the source and the account where the money sits.
A Hypothetical Walkthrough
These figures are illustrative only, and the lender’s own calculation governs.
Picture a founder who sold a company and holds three accounts, applying on the qualifier path. The loan is $800,000. She has $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000) and $200,000 in savings (100%, so $200,000). Usable assets total $800,000, which equals the loan, so she is reviewed on assets alone, subject to underwriting.
Now picture a second seller who prefers the depletion path. He holds $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100%). That is $1,500,000 in usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That figure must then carry the housing payment and other debts through the debt-to-income test.
The first borrower needs enough eligible assets to equal the loan. The second needs enough derived income to pass the ratio test. Both need documented, seasoned assets.
Where the Rule Breaks
Privately held company stock. Privately held company stock is not an eligible asset on either path. A founder who still holds shares has not yet created a qualifying asset. The route is a sale or buyout converted to a seasoned cash balance, plus whatever public securities and retirement accounts the founder already holds.
Earnouts, escrow holdbacks and seller notes. Each counts only once it is paid out, lands in a personal account and is documented. A seller who took a note instead of cash will have less countable liquidity on the day of closing than the headline price suggests. Tax treatment varies; consult a qualified professional.
Moving money mid-file. Shifting funds between accounts during underwriting forces the lender to re-trace the source. Keep balances stable and keep records of any transfer.
An open HELOC. An open line counts at its full limit in combined leverage, even at a zero balance, so it can lower the available cash-out.
Thin or vacant rental income. If the property is an investment property and rent is low or the unit is empty, assets can carry the file where rent cannot. If rent is strong, business-purpose rental financing (DSCR) reads the property instead of the borrower’s balance sheet, and the investor should compare both.
Which Route Fits
Choose by comparing your liquid assets to the loan and by looking at the property type.
- If your eligible assets, after the credit percentages, can cover the whole loan and the property is a principal residence or second home, the qualifier path avoids the income calculation entirely. Cash-out availability on that path is lender-set and not published.
- The depletion path requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never less than $250,000 liquid when assets are the only income source. Asset-derived income may instead supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived in that case.
- If most of your wealth is still locked in private shares, the sale needs to settle and the cash needs to season before either path opens up.
A first-time investor on the depletion path needs a 700 credit score. Housing history is reviewed at 0x30x12, and multiple bankruptcies are not eligible. Approval is never assured, because every file is underwritten individually. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
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. The program covers consumer mortgage lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Lendmire is a broker, not a lender, and nothing here is a commitment to lend.
Frequently Asked Questions
Does privately held stock in my old company count toward qualifying?
A founder’s route is documented liquid assets: seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their credit shares.
Do I need pay stubs or tax returns after selling my business?
No traditional personal-income documentation, pay stubs or employment verification are required on these programs. The file is still fully underwritten, and the assets are documented with statements. The lender also reviews the source of the sale proceeds.
Can the cash I take out help me qualify?
No. Cash-out proceeds never count as qualifying assets. The borrower is reviewed on assets held before the loan, and the property’s own equity cannot serve as the qualifying asset.
How are my retirement accounts treated?
It depends on the path. On the qualifier path, retirement balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Both are subject to underwriting.
Do funds from the sale need to sit for months first?
It depends on the path. The qualifier path asks for 60 days of seasoning and two months of statements per account. On the depletion path, sale-of-business funds are excused from the 120-day statement seasoning, but the source and location of the money must still be documented.
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.
For the mechanics of pulling equity out of a rental property, see 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. CFPB, Regulation Z § 1026.43
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 Lenders Underwrite an Asset-Based Cash-Out Refinance at 60% Loan-to-Value · Asset-Based Cash-Out Refinance Requirements After Selling a Business · How Lenders Underwrite an Asset-Based Cash-Out Refinance Using Retirement Accounts
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.