The Quick Read: Usually very little: private company stock is credited at 75% of its documented value only on the asset depletion path, it is not published as eligible on the asset qualifier path, and cash in the business counts only up to your ownership share, subject to underwriting. Your company’s valuation is not a bank balance, and lenders treat the two very differently. Most borrowers do better by turning part of the stake into seasoned cash before they apply.
- On the asset qualifier path, eligible assets must cover the whole loan, and private stock is not on the published list.
- On the asset depletion path, private stock counts at 75%, but securities count at 80% and cash at 100%.
- Business bank balances count only for your ownership share, and the lender reviews the source.
- Cash from selling your company is an ordinary liquid asset once it sits in your own account.
- Every figure here is a ceiling or floor from select programs, subject to underwriting. It is not an offer.
Which Path Are You On?
Asset-based mortgages work on one of two paths, and you are qualified on one at a time. The qualifier path asks whether eligible assets cover the entire loan. The depletion path turns usable assets into monthly income. Private equity behaves differently on each.
The asset qualifier path documents no employment or income. Your eligible assets, after credit percentages, must equal or exceed the whole loan. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Private company stock is not on that list. Across the wholesale network Lendmire works with, nobody publishes a percentage for it here, so plan as if it counts for zero.
The asset depletion path divides usable assets by 60 months. The result is a qualifying income that runs through the debt-to-income test. This is where private stock gets a percentage: 75% of the documented balance, through select programs and subject to underwriting. Cash and certificates of deposit count at 100%. Securities count at 80%, retirement accounts at 70%, and real-estate equity at 60%.
Notice the order. Cash beats securities, and securities beat private stock. A lender discounts an asset by how hard it would be to turn into dollars on a bad day.
Why Lenders Discount a Stake in Your Own Company
Lenders discount private equity because nobody can say what it would sell for or how long a sale would take. A public share trades in seconds at a posted price. A 30% stake in a closely held company has no posted price. Transfer restrictions, buy-sell agreements, and minority discounts all push the real number below the paper number.
That is why the 75% credit on the depletion path comes with conditions. The lender decides what documented value it will accept. A valuation you wrote on a napkin does not qualify.
Here is the honest read. Even at 75%, private stock is the weakest asset on the table. A few lenders in the network will look at it. The strictest overlays prefer you convert it first. And the qualifier path, where assets must cover the full loan, leaves it out entirely.
Business Cash Is Not Business Equity
Cash in the company’s bank account is a different asset from your ownership stake. Equity is what the business is worth. Cash is money sitting in a deposit account.
Lenders look at business cash with two questions. First, how much of it is yours? Second, would taking it out hurt the business? Only your ownership share is in play. A 40% owner generally cannot count 100% of the account. Anything beyond your share is not published as eligible on either path.
Underwriters usually want proof that you own the account interest and can reach the money. A letter from your CPA is the common evidence, and it supports the file without deciding it. For context, Fannie Mae’s Selling Guide says business assets may be acceptable for down payment, closing costs and reserves if the borrower is listed as an account owner and the account is verified. That is that agency’s rule, not this program’s. But it shows the same logic: deposit accounts, not company value.
The proof of ownership usually comes from paperwork you already have. Under Freddie Mac’s guide, ownership percentage is verified through tax forms such as a K-1 or Form 1125-E, or through an accountant’s letter if the returns do not show it. Again, that is the agency rule. The documents it names are the same ones a wholesale lender will ask to see.
Treatment at a Glance
The table below shows how each form of wealth is treated. Read across by path, and never blend the two columns.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Private company stock | Not published as eligible | 75% of documented value |
| Brokerage securities | 100% | 80% |
| Cash in your own account | 100% | 100% |
| Business account balance | Your ownership share only, reviewed | Beyond your share, not eligible |
| Sale-of-business proceeds in your account | Counts as cash after seasoning | Counts as cash, seasoning excused |
| Stock options, non-vested RSUs | Not published as eligible | Not eligible |
Two notes on the table. The qualifier path is stricter about what counts, but it is also the path where assets alone cover the loan. And crypto, collectibles, precious metals, and pledged or borrowed 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.
A Worked Example on the Depletion Path
Say you own a stake in a private company and hold some cash. The numbers below are illustrative, and the lender’s own calculation governs.
Suppose your documented private stock balance is $400,000. At 75%, $300,000 counts. You also hold $600,000 in cash, which counts at 100%, or $600,000. Usable assets total $900,000. Divide by 60 months and you get $15,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
Now compare what happens if you convert the stake first. A sale of $400,000 of stock, landing as cash, counts at 100%. Your usable assets rise from $900,000 to $1,000,000, and the monthly figure moves from $15,000 to roughly $16,700. Same wealth, better credit.
Minimums still apply. The depletion path wants qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 in liquid assets when depletion is your only income source. Private stock does not help you reach that liquid floor.
Is selling always smarter? Not always. The stake may be your livelihood, the buyer may not exist, and the sale may trigger other costs. The conversion math favors cash, but your business plan might not.
What Changes for a Rental Investor?
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. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your company equity does not enter that calculation. The lender still looks at your liquidity as the guarantor, even when an LLC holds title, and your private stake does not substitute for seasoned cash. Lendmire’s complete DSCR loans guide covers how that file is built.
If you want to buy a rental and live on assets instead of documented income, the depletion path is the asset-based option that allows investment property. Leverage is lower there: up to 65% on a purchase or rate-and-term refinance of an investment property, and 60% on a cash-out refinance of an investment property. Cash-out proceeds never count as qualifying assets. Loans run from $125,000 to $3,500,000 on that path, subject to underwriting.
For a primary residence or second home, leverage is higher. The depletion path allows up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out. The qualifier path allows 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 floors differ too. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700.
Edge Cases That Change the Answer
A minority stake. A smaller ownership share shrinks the part of any business account you can use. It also makes the stake harder to value. Some lenders prorate by your percentage. Others set a minimum ownership level. Treatment varies by program.
Co-owners. Moving money out of a shared account may require your partners to confirm the transaction and your access. Line up that letter before the lender asks.
One business supplying both assets and income. If your business is also your income source, lenders look harder at whether pulling cash out leaves it healthy. On the asset qualifier path no income is documented. But the no-harm test can still appear as a condition.
Sale proceeds. Once cash from selling a company sits in your own account, it is a liquid asset like any other. On the depletion path, sale-of-business funds are excused from the 120-day statement-age rule. On the qualifier path, the normal 60-day seasoning applies. Tax treatment varies; consult a qualified professional.
Employee equity. Stock options and non-vested restricted stock units are not eligible on the depletion path. They are not published on the qualifier path either. Vested shares of a private company are a different story, and follow the private stock treatment above.
Entity paperwork. If the property closes in an LLC, the operating agreement shows who owns what and who can sign, subject to lender program eligibility.
Seasoning: When the Money Has to Be There
Seasoning is how long funds must sit in an account before the lender trusts them. It is where good plans fail.
On the qualifier path, the lender wants 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be 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 the depletion-path seasoning rule.
The practical lesson: assets are documented on both paths. No income documentation never means no documentation. Move business cash to your personal account early (a late, large transfer draws a sourcing question), and keep the paper trail clean.
Documents to Gather
Collect these before you apply:
- Operating agreement or shareholder certificates showing your ownership percentage.
- Tax forms or an accountant’s letter that verify that percentage.
- A valuation the lender is likely to accept, if you are asking the depletion path to credit private stock.
- Business bank statements and a CPA letter confirming access and no harm to operations, if business cash is part of the plan.
- Personal statements for each qualifying account, covering the required months.
- For sale proceeds, the closing statement and the deposit trail.
Mistakes to Avoid
Counting your cap table as cash. A paper valuation is not a balance.
Counting the whole business account when you own part of it.
Mixing business and personal accounts, which muddies the source of funds.
Using the same dollars twice. Cash-out proceeds cannot count as qualifying assets, and funds used at closing are not also reserves.
Waiting until the lender asks for a letter from your CPA or a co-owner. Those take time you do not control.
Key Terms Defined
Private company stock: shares or membership units in a company that does not trade on a public exchange.
Haircut: the share of an asset’s balance the lender does not credit, such as 25% off private stock.
Seasoning: the required time funds must sit in your account, shown by statements.
Debt-to-income test: the check that compares your monthly debts, including the new housing payment, with your qualifying income.
Illiquid: hard to turn into cash at a known price.
Usable assets: the balance left after the credit percentages are applied.
Frequently Asked Questions
Do I have to list my private company stake on the application?
Yes, list it, because the application asks about your assets and net worth. Listing it and having it counted are different things. On the qualifier path it is not published as eligible, and on the depletion path it counts at 75% of documented value, subject to underwriting.
Does my company’s valuation count as a bank balance?
No. A valuation is an opinion about worth, while a balance is money you can reach. A lender may accept a documented value for private stock on the depletion path, but only at a discount. Cash always counts at a higher percentage.
What if I sell part of the company first?
The proceeds become cash in your own account, which counts at 100% on both paths. On the qualifier path, expect the 60-day seasoning and two months of statements.
Can business account cash fund my down payment?
Only your ownership share is in play, and the lender will want proof you can reach it without harming the company. Anything beyond your share is not published as eligible. Many borrowers move the money to a personal account early so it seasons.
Does this change if I am buying a rental?
Yes. Only the depletion path allows investment property, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. If you would rather qualify on the rent instead of your assets, DSCR financing is the business-purpose alternative.
Where to Go From Here
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. Lendmire is a broker that arranges these loans through select lenders in its wholesale network, and the programs described here are available in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Nothing here is a commitment to lend.
For owners who also run a firm in finance, Lendmire’s article How Private Equity Professionals Qualify for a Jumbo Mortgage With Bank Statements covers a different documentation route. The takeaway for any owner is the same: the lender credits what you can turn into cash, so build your balance before you build your application.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide, B3-4.2-02 Depository Accounts
2. Freddie Mac Guide, Section 5304.1
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 Private Company Stock Count on an Asset Qualifier Mortgage? · How to Prepare Brokerage and Retirement Statements for a Mortgage Application · How Much Does a Retired Landlord Need in Assets to Qualify for a Mortgage?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.