When talking with some of my clients who are technology professionals, I will get some version of this question: my compensation package looks strong on paper, so why did my lender only count part of it toward my mortgage.
The answer almost always comes back to restricted stock units, commonly called RSUs, and how lenders actually treat that income compared to how it feels sitting in your brokerage account. I am not a mortgage professional, and I want to be upfront that this article is educational, not lending advice. Every detail below should be verified directly with a mortgage professional who works regularly with tech compensation before you rely on it for a purchase decision, since guidelines vary by lender and change over time. What I can offer, after 20 plus years working with tech buyers on the Peninsula, is a clear picture of how this conversation actually goes so you walk into your first lender meeting prepared.
Restricted stock units are shares of company stock granted to you as part of your compensation, typically vesting over three to four years on a schedule your employer sets. Unlike stock options, RSUs have real value the moment they vest, since you simply receive the shares rather than needing to exercise anything or bet on a strike price. When your RSUs vest, their fair market value is reported as ordinary wages on your W-2, alongside your base salary.
This distinction matters enormously for mortgage purposes. Unvested RSUs are not yet income in a lender's eyes, they are a future promise from your employer, not verifiable earnings. Only vested, W-2 reported RSU income can count toward what a lender calls your qualifying income.
Generally yes, but not automatically, and not uniformly across lenders. This is the single most important thing to understand before you start house hunting.
Conventional loan programs backed by Fannie Mae and Freddie Mac, along with most jumbo loan programs, can count RSU income under specific conditions. FHA and VA loan programs generally cannot use RSU income at all. Since most Bay Area purchases at this price point require a jumbo loan anyway, this typically is not a limiting factor, but it is worth knowing.
Fannie Mae's Selling Guide draws a distinction that matters here, one the earlier version of this article glossed over: RSU grants are treated differently depending on whether they are performance-based or time-based. Most tech company grants are time-based, so this is the category that applies to the majority of clients I work with.
Performance-based awards: a two-year history is recommended, but as little as 12 months of receipt can be acceptable if there are offsetting positive factors, such as future vesting expected to continue at or above prior levels for at least 24 months, or a five-year history of restricted stock income from any employer.
Time-based awards: a minimum 12-month history of receipt from your current employer is required. This is a materially shorter runway than the “two years, generally” framing many buyers assume.
Eligible restricted stock must also come from a publicly traded company and must have already vested and been distributed to you without restrictions before it can be counted. Documentation typically includes a completed Request for Verification of Employment or your most recent paystub plus two years of W-2s, evidence the stock is publicly traded, your current and future vesting schedule, and a brokerage or bank statement showing prior distributions.
These specific thresholds vary by lender, and I would encourage you to get this confirmed in writing from a mortgage professional rather than relying on any single figure as universal.
Even once your RSU income is deemed eligible, lenders do not simply take your most recent vest and call it your qualifying income. Under Fannie Mae's published methodology, the calculation depends on whether you are paid in shares or in cash:
Paid in shares: (200-day moving average of the share price × total number of vested shares distributed in the most recent 24 months) ÷ 24 months
Paid in cash: total cash distributed, pre-tax, for vested shares in the most recent 24 months ÷ 24 months
If your history with the current employer runs 12 to 24 months rather than a full two years, the lender may use the actual number of months you have on record rather than dividing by 24. If your RSU income has been trending downward, some lenders will lean toward the more conservative figure rather than a straight average, though this is a lender-level judgment rather than a fixed Fannie Mae rule.
Here is a simplified way to think about it, using Fannie Mae's published formula for cash-paid RSU income. Say your base salary is $180,000, and over the most recent 24 months your employer distributed a total of $160,000 in vested RSU income, paid in cash equivalent. Dividing by 24 months gives you approximately $6,667 per month, or roughly $80,000 per year, in qualifying RSU income. Added to your base, your lender's qualifying income figure would be in the neighborhood of $260,000 — not your total compensation on paper, which may be considerably higher once unvested grants and recent stock appreciation are factored in.
The gap between what an engineer or product manager actually earns in total compensation and what shows up as their qualifying income on paper is often the single biggest surprise tech buyers encounter in this process. Run your specific numbers with a mortgage professional early, ideally before you fall in love with a listing, so you know your real budget rather than an assumed one.
If your compensation includes stock options rather than, or in addition to, RSUs, know that most lenders do not accept stock option income as qualifying income at all. Options require you to exercise them, and their value depends on the current stock price exceeding your strike price, which makes them fundamentally less certain than RSUs in a lender's eyes. If you are not sure whether your equity grant is an RSU, an incentive stock option, or a non-qualified stock option, your grant agreement will specify which, and it is worth confirming this early in your process.
Many tech employees have a one-year cliff followed by quarterly vesting, which creates predictable cash flow spikes throughout the year. A few practical timing considerations worth discussing with your lender and your CPA.
If you are early in your tenure, meaning under the vesting history your lender requires for your award type, it may be worth timing your purchase to land just after you cross that threshold, since it can materially change your qualifying income and your purchasing power.
If you plan to sell vested shares to help fund your down payment, doing so well ahead of your mortgage application, generally at least a couple of months in advance, helps avoid underwriting questions about large, unexplained cash deposits appearing in your accounts right before closing.
Planning your purchase so that a meaningful vesting event lands within a few months after closing can also give you a cash cushion for the early costs of homeownership, furnishing, unexpected repairs, and the property tax adjustments that come with a new purchase, without forcing you to draw down your reserves immediately.
Because Fannie Mae and Freddie Mac apply related but not identical frameworks, and because individual lenders layer their own overlays on top of agency guidelines, your choice of lender can materially change how much home you qualify for. Some loan officers are simply not trained to underwrite RSU-heavy compensation and will default to counting base salary only, which can significantly understate your real purchasing power. Others specialize in exactly this kind of borrower and know how to document and present your full compensation picture correctly.
I would strongly encourage shopping this specifically when you are choosing a lender, and asking directly how many tech compensation borrowers they have closed in the past year. This is not a place where all lenders are interchangeable.
Can I use unvested RSUs at all toward my mortgage?
Under Fannie Mae's current guidelines, no — restricted stock must have already vested and been distributed to you without restrictions before it can count as qualifying income. Some jumbo and portfolio lenders offer separate asset-based or asset-depletion programs that consider the value of a large vested stock portfolio differently. This is a specialized product, not a standard offering, so ask specifically whether it applies to your situation.
What happens if I change jobs before closing?
This can be a real problem. Most lenders require continued employment with the RSU-granting company through closing, and a job change can disqualify that income source or trigger a full loan reconsideration. If you are considering a job change, talk to your lender before you make a move, not after.
Does a stock price drop between application and closing affect my approval?
It can. Fannie Mae's formula for share-paid RSU income uses a 200-day moving average rather than the current spot price, which smooths out some short-term volatility, but ask your lender directly how they handle interim price movement so you are not surprised.
Should I sell RSUs to increase my down payment, or keep more invested?
This is a personal financial decision that depends on your risk tolerance, your other assets, and your view on concentration risk in your own company's stock. This is a conversation for a financial advisor or CPA, not your real estate agent, and I would encourage you to have it early in your process.
I have spent over 20 years working with tech employees across the full Bay Area corridor, and the buyers who move fastest and with less stress are the ones who understand their real, lender-verified purchasing power before they start touring homes, not after. I am happy to connect you with lenders in my network who specialize in exactly this kind of compensation structure.
Jacklyn O’Connor Friedland Compass | Burlingame, CA (650) 766 0791 jacklynfriedland.com CA DRE# 01726418
Serving tech employees across Palo Alto, Mountain View, Sunnyvale, Cupertino, Burlingame, San Mateo, and the full Bay Area corridor.
This article is for informational and educational purposes only and does not constitute mortgage, financial, or tax advice. RSU underwriting guidelines vary by lender and change over time. Verify all figures, thresholds, and methodologies referenced above directly with a licensed mortgage professional and, where appropriate, a CPA or financial advisor, before making any financing decision. Contact a licensed real estate professional for guidance specific to your home search.
Fannie Mae Selling Guide, B3-3.3-07, Restricted Stock Units and Restricted Stock Employment Income (effective 03/04/2026): selling-guide.fanniemae.com/sel/b3-3.3-07
As a trusted Realtor to the San Francisco 49ers and Oakland Raiders organizations, her expertise handling housing for a long list of professional athletes and coaches is proven and trusted.
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