Restricted Stock and RSU Income for a Mortgage: When Vested Shares Count as Income

Yes – restricted stock and RSU income can count toward a mortgage once the shares have vested and been distributed without restrictions, the employer’s stock is publicly traded, and you can document a history of receipt (general – confirm current).

The rest of this article is the detail behind that sentence: the conditions the agency guidance actually names, the paperwork that proves each one, and the places where individual lenders diverge from each other.

The short version

If you read nothing else, read this list. It is the test in outline.

• Only vested shares that have been distributed to you without restrictions are candidates for qualifying income. A grant that has not vested is a promise, not income.
• The employer’s stock has to be publicly traded, and the lender has to document that (general – confirm current).
• A documented history of receipt is required, and how long a history depends on the award type. Time-based awards generally call for at least a 12-month history with the current employer; performance-based awards generally look for about two years, with a shorter period of no less than 12 months sometimes acceptable (general – confirm current).
• Whether the lender has to prove future vesting also depends on award type. A one-time time-based award generally needs a vesting schedule showing income continuing for about three years from the note date, while recurring and performance-based awards generally do not carry that specific test unless something suggests the income will stop (general – confirm current).
• The share price used is an averaged figure rather than one day’s close. Fannie Mae’s guidance uses a 200-day moving average (general – confirm current).
• Restricted stock received as a sign-on bonus is generally not eligible as qualifying income, no matter how it vests (general – confirm current).
• Employee stock options are a different instrument with different treatment, and they are out of scope here.
• File completeness is the half of this you control. Equity income files are document-heavy, and thin documentation is what turns a short file into a long one.

Equity compensation is one line on a longer list of income types underwriters evaluate, each with its own history and continuance test.

What has to be true before RSU income counts

Restricted stock (RS) and restricted stock units (RSUs) are addressed directly in the Fannie Mae Selling Guide, in the topic on restricted stock units and restricted stock employment income, and the conditions are cumulative: miss one and the income comes out of the calculation entirely. The guide is published in full and free to read.

Two numbers from that topic drive most of the outcome, and they are worth fixing in your mind before anything else: the documented receipt history the award type calls for – at least 12 months for time-based awards, closer to two years for performance-based awards – and the 200-day moving average share price used to value the shares that were actually distributed (general – confirm current).

The stock has to be publicly traded

Agency guidance for this income type is built around shares in a company whose stock trades publicly, so the price is observable and the borrower can convert shares to cash. The lender is expected to document that the stock is publicly traded (general – confirm current). Private-company and pre-IPO equity does not have that observable, liquid price, and conventional guidance generally does not treat it as qualifying income.

The shares have to be vested and actually distributed

Vesting is the event that converts a promise into property, but vesting alone is not the finish line. The guidance is specific that restricted stock has to have vested and been distributed to the borrower without restrictions before it can be used (general – confirm current). In practice that means shares that have landed in an account the borrower controls, with no lock-up or contractual restriction blocking a sale.

Our take: this is the single most common misread we see. Borrowers quote the headline value of an entire multi-year grant, and the underwriter is only ever going to look at the portion that has already vested and been distributed without restrictions.

A documented history of receipt

Like other variable pay, equity income has to have a track record – and the length of that track record depends on how the award vests. For time-based awards, the guidance generally calls for a minimum 12-month history with the current employer. For performance-based awards, a minimum of roughly two years is the recommendation, though income received for a shorter period – but no less than 12 months – may be acceptable (general – confirm current).

Underwriters treat vested equity much the way they treat bonus and commission income: variable pay that has to be averaged over a documented period and shown to be likely to continue. The averaging window for equity is typically the recent 24 months of distributed vested shares, converted to a monthly figure (general – confirm current).

A runway of continued vesting

Here the rule is narrower than most summaries suggest, and getting it wrong costs people deals in both directions. A one-time time-based award generally requires the lender to document that income on the vesting schedule is expected to continue for at least three years from the note date. Recurring time-based awards and performance-based awards generally do not carry that specific three-year test – the lender is not required to verify continuance unless there is reason to believe the income may not continue (general – confirm current).

The practical consequence: bring the full vesting schedule and let the underwriter apply the right test, rather than talking yourself out of the income because a single tranche ends soon.

Continuance is also an employment question, which is why employment verification matters as much here as the brokerage paperwork.

How the share price gets set

A share price moves every day, so the methodology uses an averaged price rather than a single close. Fannie Mae’s guidance uses a 200-day moving average of the share price, applied to the vested shares distributed in the recent 24-month window on a pre-tax basis and converted to a monthly figure. Where the award is distributed in cash rather than shares, the cash actually distributed over that window drives the figure instead (general – confirm current).

This varies by lender – ask yours. Individual lenders can layer their own valuation and documentation requirements on top of the agency floor, so ask which convention applies before you build a purchase budget around a number.

Employee stock options are a different question

Stock options are not restricted stock, and they are not covered by the rules above. An option is a right to buy shares at a set price, and whether it ever produces income depends on exercise decisions, the spread between the strike price and the market price, and plan terms that differ from company to company.

The agency topic that governs restricted stock and RSU employment income does not address option income, and options are out of scope for this article. If your compensation is weighted toward options rather than restricted stock, treat this piece as background and ask your loan officer to address option income specifically, in writing, before you shop.

The documentation packet that decides your RSU file

A handful of documents carry the equity portion of the file. When they are all in the initial submission, the underwriter can adjudicate the income on the first pass. When one is missing, the file comes back as a condition, and conditions are where calendars go to die.

The vesting schedule

This is the backbone document. The guidance contemplates a current vesting schedule reflecting both past and future vesting, which is how the underwriter sees the history behind you and the runway in front of you in one place (general – confirm current). A screenshot of a portal summary is usually not enough; the full schedule is.

The brokerage statements

A brokerage or bank statement showing receipt of the prior distribution of restricted stock is part of the expected packet (general – confirm current). Statements prove the shares actually reached an account you control rather than existing only on a grant letter. They also show sales and transfers, which matters if any of those proceeds are being used for the down payment or reserves.

Employment verification and payroll records

The packet generally includes a completed verification of employment showing restricted stock distributions, or the most recent paystub showing receipt of restricted stock income together with two years of W-2s, plus a verbal verification of employment (general – confirm current). Because vested shares usually run through payroll, the RSU figures have to reconcile with how lenders calculate W-2 income before an underwriter will use them. When the brokerage records and the payroll records disagree, the underwriter stops and asks, and that question is a condition.

How equity compensation is taxed is outside what we advise on. Consult a tax professional for anything in that lane.

Evidence the stock is publicly traded

This one sounds trivial and gets skipped. The lender is expected to document that the employer’s stock is publicly traded, and a file that assumes it will be obvious generates an avoidable condition (general – confirm current).

The share price basis

The 200-day moving average price is itself a documented input, not an assumption (general – confirm current). Ask the lender to confirm the price basis it will apply and get the answer before the file is submitted. It is the one input that changes the qualifying number without changing a single other document in the packet.

Why RSU files stall, and which clock is running

Underwriting speed is not luck. It is a function of how complete the file was on day one and which lender’s queue it landed in, and equity compensation touches both of those.

Two clocks, not one

There is the underwriter’s turn time, which is how long a file waits for its first review, and there is the condition-clearing clock, which is how long it takes you and your loan officer to satisfy what the underwriter asks for afterward. They are separate, and they respond to different things.

Equity compensation rarely changes how long underwriting takes on its own; what changes the calendar is how many conditions the file generates after the first review.

What actually generates conditions on equity files

Our take: the condition drivers on equity files are almost always mechanical rather than analytical. A vesting schedule gets summarized rather than produced in full, so the underwriter cannot see past and future vesting in one document. Brokerage statements skip months, so the receipt history has visible gaps. Payroll and brokerage figures do not tie out, with nothing in the file explaining why. Each of those is a document problem, not a judgment call about your income.

All of them are solvable before submission. That is what makes file completeness the actionable half of the answer.

Colorado Springs: equity compensation outside the coastal tech centers

Equity compensation is not a Bay Area phenomenon. Along the Front Range, defense and aerospace contractors, government-services firms and technology employers all issue restricted stock as part of standard compensation packages, and those grants land in Colorado Springs files regularly.

The structural point is this: a household can have a modest base salary and a materially different qualifying picture once vested equity is documented correctly. The same household can also be told the income is unusable, purely because the packet was thin.

Lender policy on equity income is not uniform. Two lenders looking at the same vesting schedule can reach different qualifying numbers because of documentation requirements and overlays layered above the agency floor. That is the one place the wholesale broker model is the honest answer rather than a sales line: a broker in Colorado Springs can read several lenders’ equity-income rules before the file is submitted, instead of discovering an overlay after the fact.

That is a submission-choice advantage. It is not a promise about speed, approval, or pricing, and nobody should sell it as one.

The Freddie Mac parallel, and where lenders add their own rules

Freddie Mac addresses this income type in its Single-Family Seller/Servicer Guide, and the two rulebooks are close in structure but not identical in detail. The familiar elements are there: publicly traded shares, vested and distributed, a documented history that varies with the award type, and an averaged share price rather than a single close. Because the specifics are revised periodically, treat the live guide as controlling and confirm the current text before relying on any figure (general – confirm current).

Overlays are the wildcard

Above the agency floor, individual lenders add their own requirements: a longer receipt history, a specific valuation method, additional employer verification, or a policy against counting equity income at all on certain loan programs. None of that is published in the agency guides, and none of it is knowable from the outside without asking.

Other loan types have their own standards

The rules above are conventional-loan rules. FHA income standards live in HUD Handbook 4000.1 and VA’s live in the Lender’s Handbook M26-7, and each has its own documentation and continuance requirements for income beyond base pay (general – confirm current). Do not assume a conventional answer transfers to a government loan program.

How to prepare an RSU file that underwrites cleanly

Our take, in the order we would do it:

1. Pull the complete vesting schedule from your equity portal, not a summary screen, and save it as a document that shows both past and future vesting.
2. Download brokerage statements covering a full, unbroken window back through your earliest relevant distribution, plus the current year to date.
3. Gather every paystub and W-2 that reflects vested shares running through payroll.
4. Confirm whether your awards are time-based or performance-based, and whether any of them were one-time grants, because that determines which history and continuance tests apply.
5. Request the plan documents and any employer confirmation early, since that step is outside your control.
6. Ask your loan officer, before submission, what price basis the lender applies and what its overlay requires.
7. Write a short, plain summary of anything unusual – a grant refresh, a job change, a vesting cliff – rather than leaving the underwriter to infer it.

Every dollar figure, share count and time frame in your file has to be documented rather than described. That is the whole discipline.

Frequently asked questions

Can RSUs count as income for a mortgage?

Yes, when the shares have vested and been distributed to you without restrictions, the employer’s stock is publicly traded and documented as such, and you can show a history of receipt that satisfies the test for your award type (general – confirm current, Fannie Mae Selling Guide, restricted stock units and restricted stock employment income). Unvested grants do not count.

Do unvested RSUs count toward qualifying?

No. Unvested shares are a promise from your employer, not income you have received. They can still matter, because for some award types the schedule of future vesting is what shows the income is likely to continue, but the unvested value itself is not added to your qualifying income.

How much RSU history do lenders want to see?

It depends on the award type. Time-based awards generally call for a minimum 12-month history with the current employer, while performance-based awards generally look for about two years, with a shorter period of no less than 12 months sometimes acceptable (general – confirm current). Some lenders add requirements on top of that. Our take: bring every year of records you have, because the extra documentation costs you nothing and answers questions before they become conditions.

What share price does a lender use for RSU income?

An averaged price rather than one day’s close. Fannie Mae’s guidance uses a 200-day moving average of the share price, applied to the vested shares distributed over the recent 24-month window and converted to a monthly figure (general – confirm current). Lenders can layer their own requirements on top, so ask yours before you plan around a number.

Are employee stock options treated the same as RSUs?

No. Options are a right to buy shares at a set price and are evaluated under different rules, which is why this article is limited to restricted stock and RSUs. If your compensation is weighted toward options, ask your loan officer to address option income specifically.

What if my employer is private or pre-IPO?

Conventional guidance for this income type is built around publicly traded stock with an observable price, and the lender is expected to document that the stock is publicly traded. Private-company equity generally does not meet that test. Whether any alternative exists is a lender-by-lender question – ask yours rather than assuming.

Does RSU income slow down underwriting?

Not by itself. What lengthens the calendar is condition volume: an incomplete equity packet produces requests for vesting schedules, brokerage statements and employment verifications, and each round trip is time on the condition-clearing clock rather than the underwriter’s queue. A complete packet on day one is the part you control.

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Last updated: August 2026