The Quick Read: A bank statement cash-out refinance can fund a partner’s exit when three limits clear: equity at the appraised value, income that still carries the larger loan without the partner, and reserves that do not come from the proceeds. Qualification runs on documented deposits instead of tax returns, through select wholesale programs, subject to full underwriting. Lendmire is a mortgage broker, so the work is matching your deposits, title, and leverage to the program that fits.
- Equity is the first gate. Cash-out leverage ceilings step down as the loan grows.
- Income is the second gate. Deposits are reduced by an expense ratio, and the lender judges the business as it will look after the partner leaves.
- Reserves are the third gate. At the largest sizes, cash-out proceeds cannot be counted toward them.
- Above $4,000,000, every file is reviewed case by case before submission.
Can a Bank Statement Cash-Out Refinance Fund a Partner Buyout?
It can, when the partner’s stake is a real estate stake. The refinance pays off the old first mortgage, then sends the remaining proceeds to the departing partner. The settlement agent moves the money, and title transfers to the continuing owner.
The refinance also solves a second problem. A deed alone does not take someone off an existing note. A BiggerPockets discussion of exit strategies with equity partners makes the same point: a partner who guarantees the loan generally cannot leave without lender consent. Paying off the old loan releases everyone at once.
A buyout of shares in an operating company is different. If the property secures a loan that pays for a company stake, the lender will ask how the proceeds are used. Expect to document that clearly.
How Does a Lender Classify the Buyout?
It is a cash-out refinance. The payoff of the old mortgage and the cash that goes to the partner both count as part of the new loan, and the cash portion is judged against the cash-out column of the leverage ladder. It does not get purchase-level leverage.
That surprises many co-owners. On a primary residence, the best cash-out ceiling is 80%, while the best purchase ceiling is 90%. Both apply only at the smallest loan sizes. The gap is the reason partners often find their agreed price does not fit the first structure they try.
Occupancy matters too. A primary residence, a second home, and an investment property each have their own ladder. Read every figure from the ladder that matches your occupancy, never by adjusting another one.
What Leverage Does the Cash-Out Allow?
Leverage falls as the loan grows, and the bands apply to the loan amount, not the purchase price. Multiply value by the leverage you want first, then read the band that loan lands in. The figures below are ceilings through select wholesale programs, subject to underwriting.
Primary residence, cash-out:
- 80% for loans up to $1,500,000. The top cell needs credit of 680+ to $1,000,000 and 700+ above it.
- 75% for loans from $1,500,000 to $2,000,000, which needs 720+.
- 70% for loans from $2,000,000 to $3,000,000, which needs 720+.
- 65% for loans from $3,000,000 to $4,000,000. The top cell needs 720+ to $3,500,000 and 760+ above it.
- 60% for loans from $4,000,000 to $5,000,000, on review and case by case, on the bank portfolio program.
- 55% for loans from $5,000,000 to $10,000,000, on review and case by case.
- 50% for loans from $10,000,000 to $30,000,000, on review and case by case.
Investment property, cash-out: 75% for loans up to $2,000,000, 70% from $2,000,000 to $2,500,000, 60% from $2,500,000 to $3,000,000, and 55% from $3,000,000 to $4,000,000. Beyond that: 55% from $4,000,000 to $5,000,000 on review, 50% from $5,000,000 to $10,000,000 on review, and 45% above $10,000,000 on review.
The portfolio non-QM program carries files to $6,000,000. A bank portfolio program takes over above $4,000,000 and carries twelve-month-statement files to $30,000,000 on its own ladder. A lower credit score takes a lower leverage cell inside the same band.
Two more cash-out rules apply. Proceeds are unlimited at or below 60% LTV. Above 60%, the portfolio program caps cash in hand at $1,500,000. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
A Worked Buyout
Consider a primary residence appraised at $3,000,000 with two equal owners. The existing first mortgage sits at 35% of value, so equity is 65% of value. The departing partner’s half is 32.5% of value.
A loan at 70% of value lands in the $2,000,000 to $3,000,000 band, where 70% is the cash-out ceiling for a borrower with 720+ credit. Subtract the 35% payoff and 35% of value remains. The partner takes 32.5%. That leaves 2.5% of value for closing costs and everything else.
Run it again with a first mortgage at 45% of value. Equity is 55%, and the partner’s half is 27.5%. The 70% ceiling leaves 25% of value to pay a 27.5% claim. The file is short before costs. That is the usual moment to reprice the buyout, phase it, or bring a partner note.
Reserves sit on top of all of this. They run 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above that. Plan where they come from before you sign the buyout agreement.
How Is Income Built When You Are a Co-Owner?
Income comes from 12 or 24 consecutive months of personal or business bank statements, and the bank program uses 12. Eligible deposits are divided by the number of statement months after an expense ratio is applied.
Business statements need at least 25% ownership. The fixed ratios are 20% for a service business with no employees, 40% for 1 to 5 employees, and 50% for 6 or more employees or any product business. An accountant-provided ratio is also an option. A profit-and-loss method exists as well. Transfers from the borrower’s own business into a personal account count at 100%.
Underwriters remove loan proceeds, transfers between accounts, and one-off windfalls before averaging. Statements must be consecutive. Transaction histories never substitute.
Here is where buyouts get hard. If the partner’s receipts ran through the business accounts, the deposits that carried the old picture may shrink after the exit. The lender will want the remaining business to support the larger payment alone. Expect to explain partner draws, transfers between partner accounts, and the buyout funds themselves, none of which are income.
Debt-to-income can run to 50%, and credit floors start at 660 on the portfolio program, 680 on the bank program, and 700 above the super-jumbo line. For a self-employed borrower whose returns understate cash flow, this documentation path can be a fit. It may not suit borrowers with inconsistent deposits or high expenses.
Where Does the General Rule Break?
Several situations change the answer.
Title in an LLC. A personal bank statement cash-out often expects title in an individual’s name, though this varies by program. An LLC-held rental may be better served by a DSCR cash-out refinance that reviews the property’s rent instead of your deposits, subject to program rules. Lendmire’s complete DSCR loans guide covers that route.
Super-jumbo overlays. Above $3,500,000 on a primary residence, and above $3,000,000 on a second home or investment property, overlays apply. They include a 700 credit floor, a 0x30x24 housing history, 48-month seasoning on any credit event, and no rural property. Cash-out proceeds cannot satisfy reserves at that size. Borrowers who planned to use the same cash twice get caught here.
Occupancy and borrower profile. Second homes are one unit only. U.S. citizens and permanent residents qualify at the super-jumbo overlay sizes. Non-occupant co-borrowers are not allowed there.
Asset paths. If deposits will fall after the exit, assets may carry the file. Asset allowance divides liquid assets by 36, 60, or 84 months. Assets-only needs liquid assets equal to the loan plus closing costs, and business funds, gifts, and cryptocurrency never count. These paths apply to primary and second homes.
Business-purpose loans. An investment-property cash-out is a business-purpose loan, so it is reviewed differently from an owner-occupied mortgage. For consumer-purpose files, the CFPB’s Ability-to-Repay compliance guide says a creditor may consider many income types and must keep documentation of how it counted income, assets, and debts. Alt-doc files still document everything. They just document it differently.
What If the Numbers Do Not Fit?
Match the route to the gap. The best program for your situation depends on what is short.
| Route | Releases partner from note? | Best fit |
|---|---|---|
| Bank statement cash-out | Yes, old loan paid off | Strong deposits, enough equity |
| DSCR cash-out | Yes, old loan paid off | Entity title, property rent carries it |
| Lower-leverage cash-out | Yes, but smaller payout | Partner accepts partial cash |
| Phased buyout | Only after final payment | Equity short today |
| Partner note | Partner stays a creditor | Balance owed over time |
The lenders that write these structures differ on ladders, overlays, and how they count deposits. A broker that shops multiple wholesale programs can compare them against your file. Lendmire’s piece on buying out siblings or a partner on a bank statement loan walks through the family version of this problem.
What Does a Buyout File Need?
Prepare the following before you apply:
- The buyout agreement with a defined price method. Many sample agreements tie price to the refinance appraisal and let either side order a second appraisal, as one BiggerPockets buyout agreement thread shows.
- Title and vesting documents showing who is on the deed and who is on the note.
- 12 or 24 months of consecutive statements, with written explanations for large or unusual deposits.
- An accountant letter or profit-and-loss statement if you use that income method.
- Payoff information for the existing first mortgage.
- A use-of-proceeds statement, and a full appraisal.
Lendmire’s article on how a super jumbo lender underwrites business-use cash-out covers how proceeds are reviewed.
The refinance resets your loan terms and adds closing costs. It also makes the monthly obligation larger on the property you keep. Tax treatment varies, so consult a qualified professional before relying on any treatment of the buyout.
Key Terms Defined
Super jumbo: An informal label for loans far above the conforming limit, which was $832,750 at baseline, per Orrick’s summary of the FHFA announcement. Each program sets its own tiers.
Bank statement income: Qualifying income built from eligible deposits over 12 or 24 months, reduced by an expense ratio.
Expense ratio: The share of business deposits treated as operating cost and removed before income is counted.
Cash-out refinance: A new, larger loan that pays off the old one and delivers the difference as cash.
Use of proceeds: What the cash will pay for, here the partner’s equity share.
Reserves: Liquid funds, counted in months of payments, that the lender wants left after closing.
Frequently Asked Questions
Can I use a bank statement cash-out to buy out a partner who is on the deed but not the note?
Yes, in most cases the structure still works, because the old loan is paid off and title moves to you. The lender will want to see the partner’s deed transfer signed at settlement. Whether the partner was on the note affects release of liability, so confirm both documents early. Eligibility depends on lender guidelines and full underwriting.
Does the loan amount decide the leverage I can use?
Yes. Leverage ceilings fall in steps as the loan grows, and each occupancy has its own ladder. Above $4,000,000, every file is reviewed case by case before submission, so no figure there is a flat promise. Compute your loan first, then read its band.
Can the cash-out proceeds count as my reserves?
Not at super-jumbo sizes. Above $3,500,000 on a primary residence and above $3,000,000 on a second home or investment property, cash-out proceeds cannot satisfy reserves. Below those sizes, reserve treatment varies by program, so plan separate liquidity either way.
What if my deposits drop after the partner leaves?
The lender will judge the business as it will operate after the exit, so lower deposits may lower qualifying income. A longer statement history, an accountant-provided expense ratio, or an asset-based path may help. A smaller payout or a phased buyout can also bring the file back into range.
Is this the same as a DSCR loan?
No. A bank statement file is reviewed on your deposits. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The right choice depends on whether your income or the property’s rent is stronger.
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Consumer mortgage lending is licensed in 16 states, and nothing here is a commitment to lend.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. BiggerPockets: exit strategies with equity partners
2. CFPB ATR/QM Small Entity Compliance Guide
3. BiggerPockets: buyout agreement
4. Orrick InfoBytes: FHFA conforming loan limits
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: Should a Founder Refinance a Super Jumbo Bank Statement Loan? · How Much a Super Jumbo Bank Statement Refinance Costs Within Two Years · How to Cash Out a Paid-Off Property on a Super Jumbo Bank Statement Loan
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.