RSU and Equity Compensation Mortgages in California

I’m Michael DiVita (DRE #01372066 | NMLS #241655), owner of DiVita Home Finance (DRE #01818285 | NMLS #323700) in Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. For many Bay Area buyers, RSUs are half their pay — and how a lender counts them decides how much house they can buy. Call (800) 239-1103.

Yes, RSU income can count toward qualifying for a mortgage. Fannie Mae and Freddie Mac allow RSU income from publicly traded companies — generally with at least a 12-month history, averaged using the stock’s 200-day moving average price — and jumbo lenders apply their own, sometimes more flexible, rules. Pre-IPO stock usually can’t be counted as income, but vested shares, tender-offer proceeds and other assets can support reserves, the down payment or an asset-based loan.

How Fannie Mae Counts RSU Income

Fannie Mae’s Selling Guide (section B3-3.3-07) sets out specific rules for restricted stock units and restricted stock:

• Publicly traded stock. The lender must document that the stock is publicly traded.
• History. Time-based awards need at least a 12-month history with your current employer. Performance-based awards: a two-year history is recommended, but 12 months or more can be accepted with positive factors.
• Continuance. For a one-time time-based grant, the vesting schedule must show income continuing at least three years from closing. Recurring grants don’t need separate proof unless there’s reason to doubt them.
• Calculation (shares). The 200-day moving average share price × the pre-tax vested shares distributed in the most recent 24 months ÷ 24 (or the actual number of months if the history is 12–24 months).
• Documents. A written verification of employment showing distributions, or a recent pay stub plus two years of W-2s; your current vesting schedule showing past and future vesting; the 200-day average price; and a brokerage or bank statement showing prior distributions.

Example

You received 1,200 vested shares over the last 24 months (pre-tax), and the stock’s 200-day moving average is $150. Qualifying RSU income = 1,200 × $150 ÷ 24 = $7,500 a month, added to your base salary and any bonus.

Freddie Mac’s Rules

Freddie Mac updated its restricted stock guidance in Bulletin 2024-16, effective for loans with note dates on or after April 1, 2025. It replaced the 52-week average stock price with a 200-day simple moving average and allows performance-based RSU income with less than 24 months (but at least 12 months) of history when the lender documents its analysis. Recurring awards must be likely to continue at least three years, and non-recurring awards need at least three years left on the vesting schedule.

Jumbo Loans and RSUs

Most Bay Area buyers with meaningful RSU income need a jumbo loan, and jumbo lenders aren’t bound by Fannie Mae or Freddie Mac rules. Some follow agency-style calculations; others use different averaging periods, stock price tests or discounts, and some weigh your vesting schedule more heavily. That’s why lender choice changes the answer — the same pay package can qualify for noticeably different loan amounts. See jumbo loans in California.

Other Equity Compensation

Pre-IPO and Newly Public Companies

If you work at a pre-IPO company — including the large private AI and technology companies based in San Francisco — your unvested and illiquid shares generally can’t be used as income or reserves. What works:

• Qualify on base salary and bonus, with tender-offer proceeds or savings for the down payment.
• Asset-depletion or asset-qualifier loans if you have large liquid holdings: qualifying income is calculated from eligible assets. See asset-depletion mortgages.
• After an IPO, shares usually can’t be sold until a lockup period ends (often 90–180 days), and agency rules require a 12-month RSU history before vesting income counts. Plan the purchase timeline around both.

New Job or Offer Letter?

Conventional loans can close based on a signed offer letter when you start within 90 days of closing and meet extra reserve requirements, but that generally covers base salary — new RSU grants don’t count until you have the required history. Some jumbo and non-QM lenders are more flexible. See changing jobs during the mortgage process.

Down Payment: Sell, Pledge or Borrow?

• Sell shares. The simplest route. Remember that RSUs are taxed as ordinary income when they vest; your cost basis is the value at vest, so selling soon after vesting often creates little additional gain. The tax hit is largest on shares that have appreciated a lot since vesting.
• Pledged-asset or securities-backed structures. Some lenders let you pledge a brokerage portfolio instead of selling, reducing the cash down payment. These have margin-call style risks if the portfolio falls.
• Bridge or HELOC if you’re also selling a current home. See bridge loans.
• Gifts from family, documented properly. See gift funds.

Capital gains are a real consideration in California, which taxes them as ordinary income (the top state rate is 13.3%), on top of federal long-term capital gains tax of up to 20% plus the 3.8% net investment income tax. Talk to your tax advisor before selling a large, highly appreciated position.

Reserves and Concentrated Stock

Lenders often count vested stock toward reserves, sometimes at a discount for volatility. A single-stock concentration may be valued more conservatively than a diversified portfolio. Unvested RSUs are generally not reserves.

Buying in Marin, San Francisco or the Peninsula

Tech buyers moving from San Francisco to Marin, and Peninsula buyers stepping up, are almost always in high-balance conforming or jumbo territory ($1,249,125 limit in Marin, San Francisco, San Mateo and Santa Clara). A fully underwritten file — RSU history, vesting schedule and brokerage statements reviewed up front — lets you compete with short contingencies. That’s how a Tiburon buyer with RSU income closed a $2.15 million jumbo in 9 business days. See also Marin jumbo loans and San Francisco mortgages.

Frequently Asked Questions

Can I use RSU income to qualify for a mortgage?

Yes. Fannie Mae and Freddie Mac allow RSU income from publicly traded companies with at least a 12-month history (time-based awards need 12 months with your current employer), averaged using the 200-day moving average stock price. Jumbo lenders set their own rules.

How do lenders calculate RSU income?

Under Fannie Mae’s method for shares: the 200-day moving average share price times the pre-tax vested shares distributed over the last 24 months, divided by 24 (or by the actual months of history if between 12 and 24).

Can I use pre-IPO stock to qualify?

Generally not as income, and illiquid shares usually aren’t counted as assets either. Tender-offer proceeds already in your account are assets, and asset-depletion loans can use eligible liquid holdings.

Can I count RSUs from a new job?

Not on agency loans until you have the required history with your current employer. An offer letter can support base salary if you start within 90 days of closing and meet reserve requirements; some jumbo lenders are more flexible.

Do I have to sell stock for the down payment?

No. Options include pledged-asset structures, gifts, bridge financing or a HELOC on a current home. Selling is simplest; RSUs sold soon after vesting often carry little additional gain because your basis is the value at vest.