If you own a business and you're wondering whether you're "allowed" to use that money toward your down payment, the short answer is yes, in most cases. This page explains the real rule — straight from Fannie Mae's own guide — in plain, everyday words, with real examples.
Yes, you can use your own business's money for a down payment, closing costs, or savings left over after closing (called "reserves") — as long as your name is on that account. That's the actual rule, straight from Fannie Mae's own guide, and it's simpler than most people expect.
There's really only one extra step, and it only applies to some people: if you're also using that same business's income to help you qualify for the loan, the lender will want a quick check that pulling money out won't leave the business short on cash. If you're not using the business's income to qualify — say, your job or your spouse's income is what qualifies you — this extra step usually doesn't apply at all.
That's really the whole idea. Everything else on this page is just filling in the details of that one extra step — when it applies, what it looks like, and what to do if your accountant is hesitant to help.
This is the single most common mix-up on this topic, so let's clear it up first, plainly.
"I only own a small piece of my business — less than 25% — so I'm not allowed to use money from its account toward my down payment."
Not true. The 25%-ownership rule decides something totally different: whether your income from that business counts as self-employment income. Using money that's sitting in an account you own is a separate rule entirely, and Fannie Mae's guide doesn't attach any ownership percentage to it at all. The only real requirement is that your name is listed on the account.
Imagine your business is like a household. If you take $500 out of your own personal savings for a home down payment, nobody needs to check whether your household can still pay its bills next month — that's just your money, your choice.
But if you're also asking a lender to count that same household's monthly budget as proof you can afford your new mortgage payment, it's fair for them to make sure you didn't just drain the account you're relying on. That's the entire logic behind the extra check — it only shows up when the same business is doing double duty: providing your down payment and proving your income.
Here's the official rule, in plain words: Fannie Mae's guide says business money can be used for your down payment, closing costs, or reserves, as long as you're listed as an owner of the account. If you're also using that business's income to qualify for the loan, the lender does one more thing — they check that taking the money out won't hurt the business's ability to keep running normally.
In practice, most lenders ask for a short letter from your CPA or tax preparer, confirming that pulling the money out won't hurt the business. It's not something Fannie Mae's own guide spells out word-for-word as a required form — it's a common-sense extra step most lenders use to satisfy that "won't hurt the business" check.
A growing number of accountants are hesitant to write these letters, because it feels like they're being asked to guarantee something about the future — and nobody can truly promise a business will be fine no matter what. If your accountant says no, you are not stuck. This is genuinely common, and there are other ways to show the same thing, like recent bank statements that show a steady, healthy balance.
Here's a simple example of the math a lender is looking at:
In an example like this, a lender (or an accountant writing that letter) is really just asking one question: is $250,000 clearly enough left over to keep the lights on, make payroll, and cover regular expenses? There's no single dollar amount that always passes or fails — it depends entirely on how big and how cash-heavy your specific business is.
Not sure if your CPA's answer (or lack of one) is going to be a problem?
Ask Loi How to Handle the CPA LetterThink of it like checking your own bank account before a big purchase — you naturally compare what you have against your upcoming bills. Lenders do the same thing for a business, just with slightly more formal math: they compare what the business owns that could quickly turn into cash, against what the business owes in the near future.
Here's what that looks like with real numbers — two examples, one that clears the bar and one that doesn't:
In the first example, the business has more than enough to cover what it owes even after the withdrawal — a lender would generally see that as a good sign. In the second, the business owes more than it has quickly available — that doesn't automatically mean no, but it usually means more questions, or a smaller withdrawal, before moving forward.
Lenders call this a liquidity test, using one of two ratios: Current Ratio (current assets ÷ current liabilities) for most businesses, or Quick Ratio ((current assets − inventory) ÷ current liabilities) for businesses that carry a lot of physical inventory. A result of 1.0 or greater is generally treated as sufficient evidence the business can absorb the withdrawal. This is the same test used to decide whether undistributed S-corp or partnership income can be counted — see our income-calculation guide for the income side of this same math.
A "large deposit" and a "business withdrawal" sound similar, but they're opposite situations, and lenders review them differently.
Here's the official large-deposit rule, straight from Fannie Mae's guide, since it comes up often in the same conversation: a "large deposit" is any single deposit bigger than half of your monthly qualifying income. On a home purchase, a deposit that big needs to be explained. On a refinance, it typically doesn't.
One more helpful, everyday rule of thumb: money that's already been sitting in an account for the last two months of statements usually doesn't need any extra explanation at all — the "explain this deposit" conversation is really about money that showed up recently and unexpectedly, not funds that have clearly been there a while.
No — not for this specific rule. Whether you run your business alone, with a partner, or through a corporation, the same two things apply: your name needs to be on the account, and the extra check only kicks in if you're also using that business's income to qualify.
Where your business's legal structure does change things is how your income gets calculated — that's a completely separate topic, covered start to finish in our income-calculation guide.
Almost, but not identical in every detail — and being upfront about that is more useful to you than pretending they're the same. Fannie Mae's guide, which most of this page is built on, focuses on confirming the withdrawal won't hurt the business. Freddie Mac's guide takes a related but slightly different approach, leaning more on reviewing your recent business bank statements to confirm the deposits look normal for your business.
Which set of rules actually applies to your loan depends on which investor your loan ends up with — something your loan officer knows, or can find out quickly, based on your specific situation.
Type in your business's numbers below to see where you land — just to understand the idea, not as an official answer.
Want a real answer for your actual business, not just an estimate?
Have Loi Review My Real NumbersEvery business, and every file, is different. If you're thinking about using business funds toward your home, the smartest move is a five-minute conversation now — not a surprise during underwriting. I'll give you a straight answer, not a sales pitch.