The Quick Read: It depends on the path: on the asset depletion path, private stock counts at 75% of its balance through select programs, subject to underwriting, while the asset qualifier path does not list it as an eligible asset, and most of the wider market excludes private stock outright.
- Asset depletion path: private stock is credited at 75%, then divided by 60 months to produce qualifying income.
- Asset qualifier path: private stock earns no published credit. Cash, brokerage and savings do.
- Not eligible on either path: unvested restricted stock units and stock options.
- Investors buying rentals: a DSCR loan, which looks at the property’s rent, often makes the question moot.
Two Paths, Two Different Answers
Lendmire arranges asset-based mortgages through a wholesale network, and the two paths treat private stock differently. Pick the wrong path and the same shares count for something or for nothing.
The asset qualifier path covers the entire loan with eligible assets. No employment or income is documented. The credit percentages are published by asset type: brokerage accounts, certificates of deposit, money market and savings at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Private company stock is not on that list, so on this path it adds nothing.
The asset depletion path turns assets into income. The lender applies a haircut to each asset type, adds up the usable balance, and divides by 60 months. That monthly figure then runs through the debt-to-income test. A haircut is the share of a balance the lender refuses to count. On this path, private stock is credited at 75%, against 100% for cash and CDs, 80% for securities, 70% for retirement accounts and 60% for real-estate equity.
A borrower is reviewed on one path at a time. The two tables never blend.
Why Most Lenders Still Say No
Across the programs we see, private stock is the most commonly excluded investment on the depletion side. The reason is practical, not ideological. A lender wants an asset it can value, verify and, in theory, sell. Private shares struggle on all three.
No market price. Private common stock has no readily available value because it is not listed anywhere. The usual proxy is a 409A valuation, an independent appraisal of common stock. AngelList’s explainer on 409A valuations notes that private common stock lacks a readily available market value. A valuation-advisory firm adds that the 409A assumes the company stays private and applies illiquidity discounts.
Resale limits. Most private shares are restricted securities, meaning they cannot be resold freely. Under SEC Rule 144, Carta explains, a non-reporting company’s shares carry a one-year holding period. Passing that period does not create a buyer. As Allocations puts it, Rule 144 is not a private-company trading venue.
Hard-to-verify records. A brokerage statement shows a daily price. A cap-table entry or a company-issued valuation report is a different kind of record. Lenders that do accept private stock tend to ask for far more paper, and the lender, not the borrower, decides what valuation evidence it will accept.
What the 75% Credit Means in Real Numbers
The figures below are illustrative only. The lender’s own calculation governs, and every file is subject to underwriting.
Say you hold $1,200,000 of private company stock and $300,000 in cash at a regulated institution. On the depletion path:
- Private stock: $1,200,000 at 75% counts $900,000.
- Cash: $300,000 at 100% counts $300,000.
- Usable assets: $1,200,000.
- Divided by 60 months: $20,000 of monthly qualifying income.
That income must carry the full housing payment and your other debts through the debt-to-income test. Your cash also does real work here. When asset depletion is the only income source, the program asks for at least $250,000 in liquid assets, and the shares do not satisfy that. Total qualified assets must also reach the lesser of $1,000,000 or 1.25 times the loan balance.
Now run the same borrower on the qualifier path. The shares count for nothing, so only the $300,000 in cash counts toward covering the whole loan. That is far too little for most purchases. The path you choose matters more than the size of your equity stake.
How the Stock Types Compare
| Holding | Depletion path | Qualifier path |
|---|---|---|
| Public shares in a brokerage account | 80% (securities) | 100% (brokerage) |
| Private company stock | 75% | No published credit |
| Unvested restricted stock units | Not eligible | Not listed |
| Stock options | Not eligible | Not listed |
| Cash after a sale or payout | 100% | 100% (savings, brokerage) |
Notice the bottom row. Cash from a sale is the easiest asset to document and the strongest credit on both paths.
Stock That Never Counts: Options, Unvested Units and Founder Equity
Stock options and non-vested restricted stock units are not eligible on the depletion path, whether the employer is private or public. Vesting solves the unvested problem. It does not solve the lack of a market for private shares. Deferred compensation sits in a similar bucket, and Lendmire’s piece Does Deferred Compensation Count Toward an Asset Depletion Mortgage? covers it.
Founder and owner situations need a distinction. Shares you own personally are one thing. Cash sitting in your company’s bank account is another. Business account balances beyond your ownership share are not published as eligible on either path. The documented route is to move funds into a personal account in a regulated institution and let the lender review the source.
Headline valuations also mislead. A funding-round price is not the value of common stock. The Fidelity Private Shares team explains that a 409A valuation differs from a fundraising valuation, because it discounts for lack of marketability. Do not tell a loan officer your company is worth a given amount and expect a matching credit.
Documents to Gather Before You Apply
Assets are documented on both paths. “No income documentation” never means “no documentation.” For private holdings, expect to be asked for:
- A stock certificate or cap-table extract showing your holding.
- A recent 409A report or similar valuation evidence.
- The transfer-restriction terms from your shareholder or award agreement.
- Statements for every other account you want counted.
On the depletion path, statements must be at least 120 days old at application, plus one statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning. On the qualifier path, you need 60 days of seasoning and two months of statements per qualifying account.
What Changes After a Liquidity Event?
A liquidity event turns a hard-to-count asset into an easy one. An IPO lockup expiring, a tender offer, a secondary sale or an acquisition can convert private shares into public shares or cash. Once the proceeds sit in a regulated account, they count like any other cash or securities balance.
Timing matters, though. Recently arrived funds are reviewed for source, and seasoning rules apply unless a specific exemption fits. If a sale is coming, plan the order of operations: close the sale, park the proceeds in a documentable account, let statements age, then apply. Sold shares may also carry a tax bill, so tax treatment varies and you should consult a qualified professional before relying on any figure.
Pledged or borrowed funds are not published as eligible on either path. Neither are cryptocurrency, precious metals or collectibles. Converting them to a seasoned cash balance is the documented route.
Leverage, Credit and Loan Size
Private stock only counts on the depletion path, so that path’s limits apply. Subject to underwriting, leverage on a principal residence or second home runs up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. On an investment property, the ceilings are 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
Loan amounts on this path run from $125,000 to $3,500,000, through select programs. Credit follows the lender’s matrix. A first-time investor on this path needs a 700 score. A housing event needs four years of seasoning, and multiple bankruptcies are not eligible. These are ceilings and floors, never offers.
You can also use asset income to supplement documented income, up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived. For founders with a salary plus a large private stake, that mix can be worth a conversation. For the broader mechanics of how lenders credit each asset type, see Lendmire’s explainer How Lenders Count Assets Toward an Asset Depletion Mortgage.
The Investor Angle: Skip Depletion and Use DSCR
If you want a rental, ask whether you need asset depletion at all. 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 private equity stake does not have to be counted at all. Credit and liquid reserves still matter, and private stock does not satisfy a reserve requirement. Cash from sold shares does. Lendmire’s complete DSCR loans guide walks through the structure.
Asset depletion makes more sense when the property is your residence or you want income-light qualification for a second home. Founders with large illiquid stakes can look weaker on paper than a retiree with modest cash and index funds. The underwriting question is what a lender can verify and, in principle, convert to cash, not how wealthy you are.
The Rule Behind the Rule
No federal rule bans private stock. The CFPB’s ability-to-repay provision, 12 CFR 1026.43, allows a lender to base repayment ability on income, on assets other than the home being financed, or both. It does not publish an eligible-asset list, a haircut or a divisor. Each program sets those, which is why private stock is excluded by policy, not statute, and why the answer differs by program.
Key Terms Defined
Asset depletion: a method that converts eligible assets into monthly qualifying income by dividing them over a set number of months.
Haircut: the percentage of an asset’s balance a lender will not count.
409A valuation: an independent estimate of what a private company’s common stock is worth.
Restricted securities: shares acquired privately that cannot be resold freely.
Seasoning: how long funds must sit in an account, shown on statements, before a lender counts them.
Liquidity event: a sale, listing or buyout that turns private shares into cash or tradable stock.
Frequently Asked Questions
Does vested private stock count toward an asset depletion mortgage?
On the depletion path, private stock is credited at 75% through select programs, subject to underwriting. Vesting alone does not make shares eligible, and most programs in the wider market exclude private stock. On the qualifier path it earns no published credit.
Do I have to sell my shares to qualify?
Not on the depletion path, where eligible holdings are counted rather than sold. You keep the shares. Selling some can still help, because cash counts at 100% and is the simplest asset to document. On the qualifier path, converting shares to cash or brokerage holdings is the way to make them count.
Can I count the same assets for income and for reserves?
Plan on not double-counting. Assets converted into qualifying income are being relied on for that purpose, so confirm with your loan officer what remains available for any reserve requirement. Qualifier-path loans at or below 75% loan-to-value carry no reserve requirement. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Does a valuation letter from my company settle the value?
No. A valuation report is one piece of paper the lender may review, and the lender decides whether it accepts it and at what value. The 75% credit applies to the balance the lender accepts, not to a headline round valuation.
Do stock options and restricted stock units count?
No. Stock options and non-vested restricted stock units are not eligible on the depletion path. After they vest and you sell or hold the resulting shares, the proceeds or holdings are treated by what they then are.
Next Steps
Start by sorting your holdings into three piles: cash and brokerage, retirement accounts, and private or restricted equity. Then decide which path fits, assets covering the loan outright or assets turned into income. If a sale is coming, sequence it ahead of your application.
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 mortgage broker, not a lender. Its consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs change. This is not a commitment to lend.
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. AngelList, 409A valuation explainer
2. Eton Valuation Services, 409A vs. investor valuation
4. Allocations, Rule 144 and private-company secondary sales
5. Fidelity Private Shares, why a 409A valuation differs from a company valuation
6. CFPB, 12 CFR 1026.43 ability-to-repay provision
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 Asset Depletion Mortgage Eligible Assets Work on a Jumbo Loan · How to Qualify for an Asset Qualifier Mortgage · How an Asset Depletion Mortgage Works
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.