The Quick Read: Yes, but the lender treats your sale proceeds as assets, not income, so the file works only when the cash sits in your own documented account. Through select programs, assets can cover the whole loan, or they can be converted into qualifying income. Every file is fully underwritten, subject to lender guidelines.
- Asset qualifier path: eligible assets must equal or exceed the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become monthly qualifying income, which then runs through the debt-to-income test.
- Where the money sits matters: funds in a business account, an escrow account, or an unpaid note do not count until they reach your personal name.
- Documents: you provide statements, not traditional personal-income documentation, pay stubs or employment verification.
An owner who just sold a company often looks strange on paper. The bank balance is large, but nothing in the file says “income” in the way a lender is used to reading it.
This is how brokers see these files every week, and the fix is rarely about the size of the balance. It is about which program reads your balance correctly. Lendmire arranges these loans as a broker through select lenders in its network. Its consumer mortgage lending is licensed in 16 states, Indiana among them.
Why Does a Business Sale Confuse a Standard Mortgage Review?
A standard review looks for a steady paycheck or a two-year tax history. A seller has neither going forward. The business income stopped when the sale closed, and the sale year itself is often a messy, one-time spike.
Net proceeds also come in smaller than the headline price. Debts, legal costs and taxes come out first. So the number that matters is the cash that lands in your name, not the number in the purchase agreement.
Asset-based programs exist for this reader. Retirees, inheritance recipients, early-retired professionals and business sellers all hold large balances with thin documented income. The lender reads the balances instead of the paycheck.
Which Path Fits: Assets Cover the Loan, or Assets Become Income?
Pick the asset qualifier path if your usable assets can cover the whole loan. Pick the asset depletion path if you want the assets turned into monthly income that carries the payment. You are qualified on one path at a time, never a blend of both.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| What the lender reads | Total usable assets vs. the loan | Usable assets ÷ 60 months |
| Purchase leverage | Up to 80% | Up to 80% (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 |
| Main catch | Assets must equal the whole loan | Income runs through the DTI test |
Depletion leverage of 80% applies to a principal residence or second home on a purchase or rate-and-term refinance. The 60% cash-out ceiling applies to those same homes. An investment property on the depletion path is 65% on a purchase or rate-and-term refinance and 60% on a cash-out. All figures are ceilings through select programs, subject to underwriting. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The qualifier path has a published credit floor of 600. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700 score. Housing history runs 0x30x12, and one 30-day late in the last twelve months is considered case by case.
The depletion path also has asset minimums. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. If depletion is your only income source, you also need at least $250,000 in liquid assets.
Asset-derived income can supplement documented income, such as consulting pay, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. That matters if you stay on after the sale.
What Counts as an Asset, and What Doesn’t?
The lender counts each account at a percentage of its balance, and the percentages differ by path. Cash and certificates of deposit count in full on both. Securities, private stock and retirement accounts count for less on the depletion path. Several common sale-related holdings do not count at all.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Brokerage / securities | 100% | 80% |
| Private stock | Not published | 75% |
| 401(k) / IRA | 90% under 59½; 100% after | 70% at any age |
| Real-estate equity | Not published | 60% |
Not eligible on the depletion path: escrow accounts, custodial accounts, deferred compensation, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account. The lender then reviews where the money came from.
What Does the Math Look Like for a Seller?
Run the numbers on the two shapes the programs use. These are illustrations only, and the lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000). You hold $300,000 in a 401(k) and are under 59½ (90% counts, so $270,000). You hold $200,000 in savings (100% counts, so $200,000). That is $800,000 of usable assets, which matches the loan, so the file is reviewed on assets alone, subject to underwriting.
Depletion path. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100% counts, so $300,000). Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the debt-to-income test.
Which one fits you? A seller with a large, mostly liquid balance and a modest loan often fits the qualifier path. A seller who wants to keep more of the balance invested often prefers depletion. This is a real tradeoff. The qualifier path asks assets to cover the whole loan, while depletion asks only that the converted income clear the ratio.
Where Does the Money Have to Sit, and for How Long?
The money has to sit in your own name, in a regulated account, with statements the lender can read. Proceeds that stay in a company account are a problem. Practitioners often see business accounts treated as conditional, and a lender may count only your ownership share.
Move the cash after the sale closes. Then keep the paper trail: the closing statement, the sale contract, and the statement showing the deposit. A lender reviews large deposits to confirm the money is yours and not borrowed.
Seasoning is the waiting period an account must show before the lender counts it. The qualifier path and the depletion path handle it differently:
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business funds are excused from that seasoning.
That excuse is a real advantage for sellers on the depletion path. On the qualifier path, plan on the 60 days.
Your checklist, in order:
1. Close the sale and confirm the net proceeds.
2. Move the cash into accounts in your own name.
3. Pull the statements for each account you plan to use.
4. Gather the sale closing statement and contract as the source documents.
5. Keep your credit file clean and do not open new debt before applying.
What About Proceeds That Haven’t Reached Your Account?
Money you are owed does not count as money you hold. Escrow holdbacks, earnouts and seller notes are promises of future cash. Until they land in your account, they are not liquid assets.
Say you sold for a down payment plus a note from the buyer. The down payment is cash and counts once it is documented. The note is a receivable. Whether any program would read its payments as income is a program question, and the answer depends on the lender, so ask before you plan around it.
Escrow accounts are specifically not eligible on the depletion path. If a holdback releases later, wait for it to reach your personal account, season it as required, and then use it.
Set aside what you owe on the gain before you count anything. Tax treatment varies, and the bill reduces the cash you actually keep, so consult a qualified professional.
Can You Use the Proceeds to Buy a Rental?
Yes, on the depletion path, which is the only asset-based path available for an investment property. Leverage is lower at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
A rental purchase is also reviewed differently from a home purchase. Because it is a business-purpose investor loan, it is not treated like a standard owner-occupied mortgage. The CFPB’s Regulation Z commentary explains that credit to buy an owner-occupied rental property is business purpose when the property has more than two units. A compliance-training summary adds that the loan’s purpose drives the exemption, not the property alone.
For a home you will live in, the rules point the other way. The CFPB’s ability-to-repay compliance guide says a lender must consider and verify income or assets, plus debts, with no fixed ratio threshold. That is why asset-based programs can lean on your balances instead of a paycheck. Every file is still underwritten, and a program review does not skip that step.
Business-purpose rental financing that is reviewed on the rent is a different product, DSCR. This article stays with qualifying on your assets. For the program details, see Lendmire’s asset-based mortgage program.
Key Terms Defined
Asset qualifier path: the program route where eligible assets must equal or exceed the entire loan and no income is documented.
Asset depletion path: the route that divides usable assets by 60 months to create monthly qualifying income.
Usable assets: the balance that counts after each account is reduced by its percentage.
Haircut: the share of an account’s balance the lender discounts because it is less liquid or more volatile.
Seasoning: the period an account must have existed or held funds before the lender counts it.
Debt-to-income ratio: your monthly debts, including the new housing payment, compared with your monthly qualifying income.
What Gets Sellers Stuck, and How Do You Fix It?
Most delays trace back to a short list of problems. Each has a clean fix.
- Cash left in the company account. Move your share to a personal account and document it.
- Counting a note or earnout as cash. Use only what has landed. Plan the purchase around the cash you hold today.
- Too much in ineligible assets. Crypto, collectibles or stock options do not count. Convert them to a seasoned cash balance in a regulated account if the lender allows the source.
- Depletion minimums missed. If you fall short of the lesser of $1,000,000 or 1.25 times the loan, a smaller loan or the qualifier path may fit better.
- Credit surprises. A late payment or a new account can change the file. A recent housing event needs four years of seasoning on the depletion path.
Across a wholesale network, the pattern is consistent. Strong files rarely lack money. They lack a clear, document-ready trail from the sale to a personal account. Lender overlays differ, and some are stricter than the ranges above, so the same file can look different across programs.
If you are weighing this against paying all cash, the tradeoff is liquidity. Financing keeps more of your proceeds available for other uses, while paying cash removes the loan. Neither is wrong. It depends on what else you plan to do with the balance.
If your cash came from selling a house, see how to qualify on home-sale proceeds using asset depletion.
Frequently Asked Questions
Do I have to wait a year after selling my business?
No program-wide one-year wait applies. The waiting period is seasoning on the account. The qualifier path wants 60 days and two months of statements per account. The depletion path excuses sale-of-business funds from its 120-day statement rule but still wants a recent statement within 45 days. Details depend on the lender and underwriting.
Do I have to sell my investments to qualify?
No. On both paths the lender counts your balances at a percentage. You do not have to liquidate a brokerage account just to qualify. You will still need documented cash for the down payment and closing costs, so plan which accounts supply those funds.
Can escrowed or unpaid sale proceeds count?
Not until they reach your account. Escrow holdbacks, earnouts and seller notes are future money. On the depletion path, escrow accounts are specifically not eligible. Once the funds are released, deposited in your name and seasoned as the program requires, they can be used.
Is this a real mortgage with real underwriting?
Yes. It is a consumer mortgage placed through select lenders. The lender reviews your credit, your documented assets, the property, and your housing history. What changes is the income proof. You provide statements instead of traditional personal-income documentation, pay stubs or employment verification.
Can I buy a second home or a rental with this?
A second home is reviewed on both paths, with the same leverage as a primary residence. An investment property is available only on the depletion path, at 65% on a purchase and 60% on a cash-out, subject to underwriting.
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. Reach out at 828-256-2183 to request a quote. Programs change, and a sale that lands cleanly in your own name is the strongest starting point for any Indiana seller.
Lendmire’s asset-based mortgage in Indiana page presents the program for Indiana borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z Commentary on Business-Purpose Credit (12 CFR 1026.3 interpretations)
2. Compliance Alliance: Regulation Z and Investment Properties
3. CFPB Ability-to-Repay and Qualified Mortgage Rule Compliance Guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a Business Owner Use Company Cash to Qualify for an Asset-Based Mortgage? · How to Document an Indiana Asset Qualifier Mortgage Without an Employer · Can a New Mexico Trust Beneficiary Qualify for a Mortgage on Trust Assets?
Guides: Asset-Based Mortgage in Indiana
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.