Buying a home
Qualifying for a Mortgage With RSUs or Equity Compensation
Short answer
Eligible vested stock compensation can sometimes count toward mortgage qualification. The lender must distinguish it from unvested awards, review how and when it is paid, and apply the program’s documentation and income-calculation rules.
Chris Lamm, NMLS# 209221Published Last reviewed
Separate the grant from the income received
An award letter, a vested distribution, and shares held in a brokerage account describe different stages. Start by identifying which amounts have actually vested and been distributed.
Under Fannie Mae’s restricted-stock guidance, eligible awards must have vested and been distributed without restrictions. The policy also distinguishes time-based and performance-based awards and excludes specified sign-on stock awards from qualifying income.
Document the vesting and payment history
Bring the vesting schedule, pay records, W-2s, and brokerage or bank statements showing distributions. The lender needs to understand both the award terms and the amounts received.
The applicable calculation can differ between stock and cash distributions. Fannie Mae uses a specified share-price averaging method for share-based income; the latest market price alone is not the qualifying-income calculation.
Avoid counting the same stock twice
Tell us if you plan to sell shares for closing funds or reserves. The asset plan and the income plan need to be evaluated together.
Share values can change before closing. Ask for a financing review based on the documented program treatment rather than the full headline value of an equity package.
Prepare the complete award file
- Award agreements and current vesting schedules.
- Recent paystubs and prior W-2s.
- Statements showing vested distributions.
- A plan for shares you intend to sell or retain.
Sources and program details
These references support the program details discussed above. The program selected for your loan and its current requirements control your application.
Questions about this guide
Can unvested RSUs be treated as money for closing?
Do not count them as available cash. Vesting, access, liquidation, and the lender’s asset requirements need review.
Does the current share price determine my qualifying income?
Not necessarily. The program may require a different valuation and averaging method.
Written by Chris Lamm
Senior Loan Advisor and Branch Manager, MortgageOne Inc. NMLS# 209221. 25 years in mortgage lending, 6,000 families served.
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