Who Qualifies for a Buy Before You Sell Program?

Buy Before You Sell programs are designed for existing homeowners who have equity in their current property and are ready to purchase a new home. Here is a general overview of qualification criteria.

Core Requirements

Existing homeownership with equity: You must own a home with sufficient equity to support the program — typically at least 20%–25% equity in the departing residence
Creditworthiness: Standard credit requirements apply to the new purchase loan, typically 620+ FICO depending on loan type
Income qualification: You must qualify for the new purchase mortgage on your income — the program handles the departure residence payment in various ways depending on structure
California property: Both the departing residence and new purchase must be in an eligible state — for Lendia clients, California

Equity Requirements

The amount of equity in your departing residence determines how much the BBYS provider can advance for your down payment. Properties with higher equity unlock larger advances. If equity is limited, the program may still work but with a smaller bridge amount.

Income and DTI

DTI qualification depends on program structure. Some BBYS programs exclude the departing residence payment from DTI entirely (because the lender holds the equity advance). Others require you to qualify carrying both payments — which is more conservative but may be required depending on the lender.

Best CandidatesExisting California homeowners with 20%+ equity in their current home, strong credit, and documented income who want to buy non-contingently in a competitive market.

A quick equity self-check (illustrative example, not a quote)

Estimate your home’s value, subtract what you owe, and divide by the value. If your home is worth $900,000 and you owe $600,000, your equity is $300,000, or about 33% ($300,000 ÷ $900,000). That sits above the 20%–25% range these programs typically look for. If you owe $750,000 on the same home, equity is $150,000, or about 17%, and a smaller bridge or a different structure may be needed. A listing agent’s price opinion and your latest mortgage statement are enough for a first pass.

Documents to gather

Your most recent mortgage statement for the departing home
Your latest property tax bill and homeowners insurance declarations page
Recent pay stubs and W-2s, or tax returns and profit-and-loss information if you are self-employed
Two months of bank and investment statements
Photo ID and, if the home has an HOA, the HOA contact details

Where scenarios commonly get stuck

Thin equity: after selling costs, little would be left, which limits the advance.
Debt-to-income: if the structure counts both payments, income has to support both.
Title or lien issues: a second lien or unresolved title item on the departing home needs to be cleared or planned for.
Credit under the new loan’s minimum: the purchase mortgage has its own credit requirements, commonly 620 or higher depending on loan type.

Frequently asked questions

Can I qualify if I am self-employed?

Yes, potentially. The new purchase loan can sometimes use alternative income documentation, which is discussed on our compatible loan types page. Expect to provide more paperwork than a salaried borrower.

Does the departing home have to be my primary residence?

The standard use is a move from one primary residence to another. Some select providers allow an investment property as the departing home, so tell us about your situation up front.

What if I only have limited equity?

The program may still work with a smaller bridge amount. We can compare that against waiting to build equity or choosing a different path, using your actual numbers.