Non-QM
how is a large deposit defined
A large deposit is most commonly defined as a single deposit exceeding 50% of the total monthly qualifying income, though the exact threshold varies by loan program and whether the deposit is being evaluated as an asset or as income.
Guideline Requirements
Fannie Mae — Asset Context (B3-4.2-02)
- "A large deposit is defined as a single deposit that exceeds 50% of the total monthly qualifying income for the loan."
- Applies on purchase transactions only when funds are needed for down payment, closing costs, or reserves.
- Refinance transactions: No documentation or explanation required (though borrowed funds must still be tracked).
- Split deposits: When a deposit has both sourced and unsourced portions, only the unsourced portion is used to determine whether the 50% threshold is met.
FHA — Manual Underwriting (Forward Mortgages)
- Same 50% threshold: "For individual deposits of more than 50 percent of the total monthly Effective Income, the Mortgagee must obtain documentation of the deposits."
- Also requires verification that deposits are commensurate with the borrower's income and savings history and that no debts were incurred to obtain part or all of the Minimum Required Investment.
FHA — Standard (Automated) Underwriting
- Threshold shifts to loan amount: "For recently opened accounts and recent individual deposits of more than 1 percent of the loan amount, the Lender must obtain documentation of the deposits."
Freddie Mac — Depository Account Context
- Asset-based benchmark (not income-based): "The Seller must document the source of funds for any deposit exceeding 10% of the Borrower's total eligible assets in depository accounts and securities and verify the deposit does not include gifts or borrowed funds or reduce the eligible assets used to qualify the Borrower by the amount of the deposit."
Lender Overlays / Matrix
- JMAC Lending — Newport Non-Conforming (Asset Utilization): "Large deposits are defined as any single deposit exceeding 50% of the borrower's average monthly income amount."
- Greenbox Loans — Asset Context: "A large deposit is defined as any single deposit exceeding 50% of the borrower's qualifying monthly income."
- Greenbox Loans — Bank Statement Income Context: "A large deposit is defined as any single credit to the account that exceeds 50% of the calculated average eligible monthly deposits for the business."
- Newfi Lending — Sequoia NQM and Rainier (Bank Statement Income): "Any deposit exceeding 50% of the average monthly sales of the business is considered a large deposit."
- Mega Capital — Silver Jumbo: "A single deposit on the account statements that exceeds 50% of the total monthly qualifying income." Only unverified portions apply toward the 50% threshold — same split-deposit logic as Fannie Mae.
- Mega Capital — Simple MVP (Non-Conforming): "On a purchase transaction, large deposits must be sourced, a large deposit is considered more than 100% of the borrower's monthly income."
- AmWest Funding — Bank Statement Advantage Program: "Source of large deposit is not required to be documented."
Exceptions / Alternative Paths
- Greenbox / Newfi — Bank Statement Programs: Isolated large deposits must be sourced or excluded. If six or more large deposits occur within a 12-month period, they may be treated as consistent with the business's operations and do not necessarily require individual sourcing.
- AmWest Bank Statement Advantage: Sourcing is explicitly waived — no documentation required regardless of deposit size.
Summary by Program
| Source | Context | Large Deposit Threshold |
|---|---|---|
| Fannie Mae | Asset — Purchase | > 50% of total monthly qualifying income |
| Fannie Mae | Asset — Refinance | No documentation required |
| FHA — Manual UW | Asset | > 50% of total monthly Effective Income |
| FHA — AUS | Asset | > 1% of the loan amount |
| Freddie Mac | Depository Assets | > 10% of total eligible assets |
| Greenbox Loans | Asset | > 50% of qualifying monthly income |
| Greenbox Loans | Bank Statement Income | > 50% of avg. eligible monthly deposits |
| Newfi Lending | Bank Statement Income | > 50% of avg. monthly business sales |
| JMAC — Newport | Asset | > 50% of avg. monthly income |
| Mega Capital — Silver Jumbo | Asset — Purchase | > 50% of total monthly qualifying income |
| Mega Capital — Simple MVP | Asset — Purchase | > 100% of monthly income |
| AmWest — Bank Statement Advantage | Asset | No sourcing required |
- Note: The dominant convention across agency and most Non-QM programs is 50% of total monthly qualifying income. Freddie Mac is the primary agency exception (asset-based), FHA AUS uses a loan amount-based trigger, and a small number of Non-QM lenders apply a business-income benchmark or waive the requirement entirely.
