“I run a cash business. Since banks pay so little interest, I keep most of it in a safe. Now I want to buy a home and someone told me that it’s a problem using cash for a down payment. Why would that be a problem?”
OK, so I’m not going to ask what your cash business is. But I will answer your question.
Banks don’t like “cash from a mattress” or safe or whatever because they want to see a paper trail showing that it’s your money.
They want to be sure you have skin in the game and aren’t just borrowing the down payment money. If you’re using your own money, you’re a much better risk to the bank.
Bottom line is you have to put that cash in the bank. And you’ll need one or possibly two bank statements showing the funds. So if you’re in a hurry, put it in your checking account, as those typically issue statements more often.