By CJ Kerls | Branch Manager / SVP of Mortgage Lending | NMLS #243438
Rate | San Francisco, CA | Serving the Bay Area and Sonoma County

Do RSUs Count as Income for a Mortgage? How Lenders Calculate Your Buying Power

Yes, restricted stock units (RSUs) can count as income when you apply for a mortgage. But the number your lender can use may look very different from the total compensation on your offer letter, and two lenders can reach different answers from the same vesting history.

I’m CJ Kerls, a Bay Area and Sonoma County mortgage lender with Rate. I regularly work with borrowers whose compensation includes RSUs, bonuses, and other variable income. I see this disconnect often: someone may earn enough to support the home they want, yet receive a pre-approval based mostly on salary because the lender did not fully analyze the stock portion.

The amount a lender can use depends on your vesting history, award type, current employer, and loan program. Those details can change qualifying income by thousands of dollars a month, which is why the analysis belongs in the pre-approval process before you make offers.

Key Takeaways

Vested and distributed RSUs may count as income when the stock is publicly traded and the required history and documents support it. An unvested grant does not.
Fannie Mae and Freddie Mac can produce different income figures. Fannie Mae generally averages 24 months, while Freddie Mac uses 12 months for time-based awards and 24 months for performance-based awards.
Current-employer history matters. Time-based RSUs generally require at least 12 months of receipt, and a job change can temporarily reduce usable income.
Vested shares may still help as assets for a down payment, closing costs, or reserves even when they cannot be counted as monthly income.
Early review matters. Conforming and jumbo programs can treat the same compensation differently, so compare the available options before setting your price range.

When vested RSUs can count as mortgage income

For a conventional mortgage, Fannie Mae and Freddie Mac both allow restricted stock income when the shares have vested and been distributed without restrictions. The stock must also be publicly traded.

In plain English:

The total grant shown in your compensation package is not qualifying income.
The unvested balance in your equity portal is not qualifying income.
Shares that vested, were released to you, and can be documented may be qualifying income.

Future vesting still matters because it helps show whether the income is likely to continue. But a large unvested grant does not become mortgage income simply because it appears on a schedule.

Jumbo loans are a separate category. Some jumbo programs follow the conforming framework closely; others have their own rules and may offer more flexibility for recent job changes or unusual compensation structures. That is one reason an early review matters in the Bay Area, where many purchases fall into conforming, high-balance, or jumbo territory.

Why two lenders can calculate different RSU income

For shares distributed as stock, both Fannie Mae and Freddie Mac now use a documented 200-day moving average of the share price. This helps reduce the effect of a short-term price spike or drop.

Where the agencies differ is the period of vesting history they use in the calculation.

How each agency averages vested restricted stock when calculating qualifying income. A general summary of published guidelines, not a statement of program terms.
	Fannie Mae	Freddie Mac
Time-based awards	Generally uses vested shares distributed over the most recent 24 months, divided by 24.	Uses vested shares distributed over the most recent 12 months, divided by 12.
Performance-based awards	Generally uses vested shares distributed over the most recent 24 months, divided by 24.	Uses vested shares distributed over the most recent 24 months, divided by 24. A shorter period may be possible in limited cases, but never less than 12 months with the current employer.

For either award type, Fannie Mae may use the actual number of months received when the borrower’s history is between 12 and 24 months.

The distinction matters most when your time-based awards have grown.

A simple example:

Suppose 1,200 shares vested during the past 12 months and 800 shares vested during the 12 months before that. If the documented 200-day average price is $60, here is how the math works:

Freddie Mac’s time-based calculation: 1,200 × $60 ÷ 12 = $6,000 per month.
Fannie Mae’s 24-month calculation: 2,000 × $60 ÷ 24 = $5,000 per month.

This example is an illustration of how the two calculation methods differ. It uses assumed figures. It is not a quote, not an offer or commitment to lend, and not a representation that any borrower will qualify. Your own result depends on your documented vesting history, award type, share price, employer, and loan program.

“Same borrower. Same stock. A $1,000 difference in monthly qualifying income.”

The shorter window is not always better. If your recent vesting was lower than the prior year, a longer average may help. The point is to calculate your income using the actual history instead of assuming one agency or one lender will produce the best result.

How much history do you need?

For time-based awards, the common schedule that vests as long as you remain employed, both agencies generally require at least 12 months of receipt from your current employer.

Performance-based awards usually require more history. Fannie Mae recommends two years but may accept as little as 12 months when strong supporting factors exist. Freddie Mac calls for two consecutive years, with a possible exception for a period of at least 12 months when the lender can support the income’s stability.

Future vesting also comes into the analysis. Recurring grants are generally easier to support than a one-time award. For a one-time time-based award, both agencies apply a three-year continuance standard, although they measure that period from different dates.

You do not need to memorize those distinctions. You do need to know whether your award is time-based or performance-based and have the documents that show it.

A job change can reduce usable income even when your compensation increased

This is one of the most frustrating outcomes I see.

You leave one public company for another. Your new salary is higher, your new equity package is larger, and your career is moving in the right direction. But if the new grant has not produced at least 12 months of vested distributions, the conforming calculation may not allow that RSU income yet.

Your prior vesting history can help explain the strength and stability of your compensation, especially with a long record of receiving equity. It does not automatically replace the current-employer history required under the standard agency rules.

That does not mean you cannot qualify. It means the file may need a different approach, perhaps using salary and bonus only, considering a jumbo program with different guidelines, adjusting the timing of the purchase, or reviewing other available assets and income.

If you expect to change jobs and buy a home in the same year, review the sequence before you make either decision. A short conversation can reveal a timing issue that would be much harder to solve once you are in contract.

What does not work the way many borrowers expect

1 Unvested or private-company equity

Unvested RSUs do not count as qualifying income under the standard conforming rules. Private-company shares also do not fit those rules because the agencies require evidence that the stock is publicly traded.

Your equity may have real long-term value. Mortgage underwriting is answering a narrower question: what stable monthly income can be documented today?

2 Sign-on stock awards

Fannie Mae specifically excludes sign-on bonuses paid as restricted stock from qualifying income. Other loan programs may treat specialized compensation differently, but that treatment has to be confirmed for the individual loan. It should never be assumed from the size of the grant alone.

3 A declining bonus or lighter vesting year

Bonus income is reviewed separately from RSU income. When bonus income or other variable compensation is declining, the lender may need evidence that the current level has stabilized. A decline is not always solved by simply averaging the last two years.

The same practical concern applies to RSUs: the lender is looking for an amount that is supportable and likely to continue, not merely the highest number in your history.

4 Borrowing against your portfolio

A securities-backed loan may provide funds for a down payment or closing costs. It does not turn the portfolio into employment income. Depending on how the loan is structured, its payment may also affect qualification.

Your vested shares may still help with the cash to close

Income and assets are two different parts of the mortgage application.

Even when stock cannot be counted as monthly income, vested publicly traded shares may be used for a down payment, closing costs, or reserves if ownership and value can be documented. Under Fannie Mae’s asset rules, if the verified value is at least 20 percent greater than the amount needed for the down payment and closing costs, the borrower generally does not have to document the actual liquidation. If the cushion is smaller, evidence of the sale and receipt of funds is required. Stocks used for reserves do not have to be liquidated.

Whether you should sell is a separate decision. RSUs are generally included in taxable compensation when shares are transferred or cash is paid after vesting, and a later sale can create a capital gain or loss. Talk with your CPA or tax attorney about timing and tax consequences before your purchase plan depends on a sale.

What to gather for an RSU income review

You can make this analysis much faster by pulling the right documents at the beginning:

Your current grant agreement or offer letter showing whether vesting is time-based or performance-based.
A complete vesting schedule showing past distributions and future vesting.
Brokerage statements or employer records showing the shares or cash actually distributed to you, including the pre-tax amount.
Your most recent paystub and W-2s with RSU payouts separated from salary and other compensation when possible.
Details of any recent employer change, one-time grant, or decline in bonus or vesting.

Do not worry if your W-2 combines salary, bonus, and stock into one number. It simply means the lender may need an additional record from your employer or equity portal to separate the income types.

What a useful pre-approval should tell you

A pre-approval for an equity-compensated borrower should do more than add salary to last year’s vested shares.

It should answer:

How much RSU income is supportable under each relevant calculation?
Does a conforming or jumbo program fit the compensation history better?
Is a current-employer history or future-vesting issue limiting the result?
Which documents are still needed before underwriting?
How much can you comfortably target without relying on income the underwriter may reject?

At Rate, I can review the actual vesting history across available conforming and jumbo loan programs. Some borrowers do not need their RSUs to qualify. For others, getting the calculation right is the difference between a pre-approval that reflects only base salary and one that reflects a much fuller picture of their compensation.

Frequently asked questions

Do RSUs count as income for a mortgage?

They can. Under standard conforming rules, the shares generally must be vested, distributed without restrictions, publicly traded, and supported by the required history and documents.

Can a lender use unvested RSUs?

Not as current qualifying income under the standard Fannie Mae or Freddie Mac RSU rules. A future vesting schedule may help document continuance for income you are already receiving.

Do I need two years of RSU history?

Not always. Time-based awards generally require at least 12 months from the current employer. Performance-based awards usually call for two years, although a shorter history of at least 12 months may be considered in some circumstances.

What happens if I recently changed jobs?

The current-employer history requirement can limit the new RSU income even if you received stock at your previous employer. Depending on the facts, a different loan program or purchase timeline may help.

Do I have to sell my stock for the down payment?

Not necessarily. Vested publicly traded stock may be counted as an asset, and sufficient excess value can sometimes eliminate the need to document liquidation. Your lender should confirm the requirement for your specific loan before you sell.

The Bottom Line

RSU income is not too unusual or too complicated to use. It does, however, need to be calculated from the right history under the right loan program.

If equity compensation is important to your buying power, get it reviewed before you set a price range or write an offer. The goal is simple: know what an underwriter can support while you still have time to choose the best path.

I have spent 35+ years working through mortgage situations that do not fit the standard template, including RSU and bonus income for borrowers in the Bay Area, Sonoma County, Southern California, and across the 29 states where I am licensed.

Sources

Fannie Mae, Selling Guide B3-3.3-07: Restricted Stock Units and Restricted Stock Employment Income, requirements for using restricted stock as qualifying income.
Freddie Mac, Single-Family Seller/Servicer Guide Section 5303.1: Employed Income, history, documentation and calculation requirements for employed income.
Fannie Mae, Selling Guide B3-4.3-01: Stocks, Stock Options, Bonds, and Mutual Funds, documentation and liquidation requirements for stock used as assets.
Internal Revenue Service, Publication 525: Taxable and Nontaxable Income, treatment of restricted property and stock received for services.