Using RSU Income to Qualify for a Mortgage: 2026 Guide for Tech Employees

A software engineer at a public FAANG company earning $200K base and $300K in annual RSU vests has $500K of W-2 income — but many mortgage lenders will only count the $200K. Understanding the rules unlocks your full borrowing capacity, and getting them wrong can cost you the home.

Why RSU income is complicated for lenders

Lenders classify income by how predictable and ongoing it is. Salary is easy: fixed, recurring, documented on a paystub. RSUs are more complex — they're real W-2 income, but they fluctuate with stock price, vest on a schedule that could theoretically end, and come from equity that could drop to zero. Fannie Mae and Freddie Mac have built specific underwriting rules around this reality.

The good news: RSU income can be fully counted toward mortgage qualification — at most lenders for most applicants. The process just requires more documentation than salary alone.

The Fannie Mae and Freddie Mac rules (2026)

The current guidelines are in Fannie Mae Selling Guide B3-3.3-07 (updated March 4, 2026), "Restricted Stock Units and Restricted Stock Employment Income."¹ Freddie Mac's single-family guidelines follow similar logic with minor variations.

The five requirements that must all be met

1. Publicly traded employer. The company's stock must be listed on a recognized exchange (NYSE, Nasdaq, or equivalent foreign exchange). Pre-IPO RSUs — regardless of current FMV or 409A valuation — cannot be used as qualifying income because there is no tradeable market and thus no 200-day moving average to calculate.¹
2. 12-month receipt history (time-based RSUs). The borrower must have received RSU income for at least 12 months, documented through W-2s or paystubs. If you joined the company eight months ago and just had your first cliff vest, you're eight months short — the income cannot be counted yet.¹
3. 24-month receipt history (performance-based RSUs). PSUs and other performance-conditioned awards require a longer track record because payout timing and amount are less predictable. If you have a mix of time-based and performance-based awards, time-based history requirements apply to the time-based tranche and 24-month requirements apply to the performance-based tranche.¹
4. Continuance of income supported. The employer must confirm that vesting is expected to continue. In practice, this means you need a current vesting schedule from your equity plan portal (Fidelity NetBenefits, E*Trade, Morgan Stanley Shareworks, Schwab Equity Award Center, etc.) showing vest dates and share quantities for at least three future years unless the lender can independently document that your employer's vesting programs are ongoing.¹
5. 200-day moving average for stock valuation. Lenders cannot use the current stock price to value your RSU income. They must use the 200-day simple moving average of your employer's stock price. If the stock has only been publicly traded for less than 200 days (recent IPO), the required calculation metric does not exist, which typically requires an underwriter exception.²

How lenders calculate your qualifying RSU income

Once all five requirements are met, the income calculation follows a specific methodology:

1. Pull two years of W-2s. The RSU income is in Box 1 (wages) of your W-2. It represents the FMV of shares at vest date, which is ordinary income. Your employer has already netted the share-withholding; what's left is the cash-equivalent income the lender is evaluating.
2. Average the two years. Add Box 1 RSU income from your most recent two W-2s and divide by two. This is your qualifying annual RSU income. If Year 1 was $180K RSU and Year 2 was $240K RSU, qualifying income is $210K/year.
3. Apply the 200-day moving average adjustment. Some lenders apply a second adjustment: they calculate what your RSU income would have been under the 200-day moving average price versus the actual vest-day prices, then use the moving-average-based figure in the denominator of the debt-to-income ratio. This can lower your qualifying income if the stock has run up significantly from its 200-day average.
4. Add to base salary. The resulting RSU income figure is added to your verified base salary to produce your total qualifying income. This is what drives the maximum mortgage amount.

2026 conforming loan limits

Whether your mortgage is conforming (backed by Fannie/Freddie) or jumbo matters for both rate and underwriting standards. The FHFA set 2026 limits effective January 1, 2026:³

For tech employees in San Francisco, Santa Clara, San Mateo, King County (Seattle), or Manhattan, the high-cost limit of $1,249,125 applies. A loan above that amount is a jumbo mortgage — underwritten to bank portfolio standards rather than Fannie/Freddie guidelines, with different (often more flexible, sometimes more stringent) rules for variable income.

Jumbo lenders and RSU income

Jumbo lenders — particularly those serving HCOL tech markets — often have more nuanced RSU underwriting than Fannie/Freddie. Some differences:

• Some jumbo lenders will accept 12 months of history with compensating factors (high credit score, large down payment, significant liquid reserves).
• Jumbo lenders may accept equity plan screenshots directly instead of requiring employer verification forms.
• Some will count unvested RSUs as reserves (partially — often at a haircut), which can increase your loan amount even if the vesting hasn't started.
• Lenders with specific tech-employee focus (like some Bay Area credit unions and private banks) understand equity comp structures and can be more accommodating on documentation timing.

Special situations

You just started at a new company

If you recently joined a company and haven't yet completed 12 months of vesting, you have two paths: (1) wait until you pass the 12-month history threshold, or (2) qualify based on base salary alone. Many FAANG engineers have base salaries well above $200K, which may be sufficient for a conforming loan in their target market even without RSU income counting. An advisor can model both scenarios.

Your company went public in the last 200 days

If your employer had an IPO within the last 200 days, the 200-day moving average cannot be calculated yet. Options: use a jumbo lender who will accept an exception underwrite, wait until the 200-day window is satisfied, or qualify on base salary alone. Note that double-trigger RSU settlement at IPO means your W-2 income from that event may be very large — but you need the history requirement met to count it.

You have ISOs or NSOs, not RSUs

Stock options that have been exercised and resulted in taxable income may appear on your W-2 (NSOs trigger W-2 ordinary income; ISO disqualifying dispositions also flow through W-2). That income can be counted. Unexercised options — regardless of intrinsic value — are not income and cannot be counted as qualifying income or reserves under standard guidelines. Pre-tax profits from options not yet sold don't count.

You have vesting gaps or accelerated events

If you have a year in which no RSUs vested (you took a sabbatical, switched jobs, or were on equity freeze), that W-2 year shows zero RSU income. Lenders using a two-year average will severely discount your qualifying income. This is worth planning around: timing a home purchase for a year when two consecutive high-vest years are on your W-2s maximizes qualifying income.

California community property

If you are married and live in a community property state (California, Washington, Arizona, Nevada, and others), your spouse's share of your RSU income vested during the marriage is community property. For mortgage qualification, both spouses typically appear on the application and their combined income and debt obligations are used. A community property state adds complexity if only one spouse is on the loan application.

Documentation checklist

Gather these before you apply. Missing one item can stall underwriting for weeks:

• Two years' W-2s (most recent two tax years) showing RSU income in Box 1
• Current equity plan portal statement (Fidelity, E*Trade, Morgan Stanley, Schwab, Carta, etc.) showing: all outstanding grant IDs, vest dates, share quantities per vest for at least the next 3 years
• Employer Verification of Employment (VOE) or signed offer letter confirming equity award program continuation
• Most recent paystub showing YTD RSU income if there has already been a vest in the current year
• Grant agreement or award notice for each outstanding grant
• Brokerage statement showing how many shares you currently hold (lenders may want to confirm you haven't already sold all previously vested shares)

How RSU income interacts with your tax picture on the mortgage

One counterintuitive issue: high RSU income creates a high marginal tax rate, which means a large April estimated tax bill or underpayment. Lenders typically do not adjust qualifying income for taxes — they use gross income in DTI ratios. But a large IRS payment in April can drain liquid reserves and affect your down payment picture. Coordinating your mortgage closing month relative to your estimated tax payment dates matters for cash flow.

Specifically: if you have a significant RSU vest in Q4 2025 and you owe $60K in estimated taxes in April 2026, timing a home close in March vs. May affects how much cash is available for down payment and closing costs. An equity-comp advisor who also does tax planning can model this explicitly.

What a financial advisor does here that's hard to DIY

The Fannie/Freddie rules are public and the math is straightforward. What's harder:

• Choosing the right lender. Not all lenders understand RSU income equally well. Some will reject a borrower with $400K of RSU vesting because their income is "too variable." Others — especially those serving tech corridors — treat it as a core product. An advisor with relationships in this space can point you to the right institution.
• Sequencing sale-to-close and taxes. If you're selling employer stock for the down payment, that triggers a capital gains event. Timing the vest-and-sell sequence to maximize post-tax proceeds, minimize estimated tax penalties, and close on schedule requires coordinating equity comp planning, tax planning, and the mortgage timeline simultaneously.
• Concentrated-stock risk in the collateral. If your employer stock constitutes most of your net worth, using it for a down payment while still holding a large unvested position creates compounding single-stock risk. Your home's equity depends on your job; so does your remaining unvested equity. A fee-only advisor can help you think through this concentration risk before you write a check.