RSU Income and Mortgage Qualification: What Tech Workers in Texas and California Need to Know
You make $250,000 a year. A third of that is RSUs. Your base salary alone puts you in a comfortable bracket, but it’s the vesting stock that makes you feel, as the kids say, built different.
Then you sit down with a mortgage lender and they want to either ignore your RSU income entirely or make you jump through so many hoops that you start questioning whether you’d rather just buy a house in cash. (You won’t. Even at your income level, leverage is usually the right move.)
Here’s the deal: RSU income can count toward your mortgage qualification. But it requires specific documentation, a specific history, and a lender who actually understands how Fannie Mae and Freddie Mac treat equity compensation.
This guide is for you — the software engineer in Austin, the product manager in San Francisco, the data scientist in Atlanta who has been on H1B for three years and just wants to know if their Google RSUs count.
What Are RSUs and Why Are They Complicated for Mortgages?
Restricted Stock Units are a form of equity compensation. Your employer grants you a number of shares that vest over time — typically over four years with a one-year cliff. When shares vest, they become income (ordinary income, taxed at your marginal rate). They show up on your W-2.
For mortgage purposes, the complication is this: RSU income is variable and uncertain. Your base salary will be the same next year. Your RSU income depends on:
- Whether your company keeps the same grant structure
- Whether your stock price fluctuates (affecting how much cash you get per share)
- Whether you’re still employed and vesting
- Whether your vesting schedule continues on its current pace
Lenders want income that’s stable, documentable, and likely to continue. Variable equity compensation makes underwriters nervous — which is why Fannie Mae and Freddie Mac have very specific rules for it.
Fannie Mae/Freddie Mac Guidelines for RSU Income
The 2-Year History Requirement
Fannie Mae requires that RSU income have a 2-year history of receipt before it can be counted in qualifying income. This means:
- Two years of W-2s showing RSU vesting income
- Two years of tax returns (Form 1040) confirming the income
- Consistent or increasing RSU income across both years
If you joined your company last year and received your first RSU vesting this year, your RSU income likely cannot be counted yet — you don’t have two years of history. Plan accordingly.
The Continuance Requirement: 3 More Years
Even with a 2-year history, Fannie Mae requires that the income have a reasonable expectation of continuing for at least three years. For RSUs, this means:
- Your vesting schedule must show continued grants for at least three more years
- Your employer must confirm the grant structure is ongoing
- Grant letters or equity award statements showing future vesting
This is the part most lenders mess up. They either can’t verify the 3-year continuance (and decline to count RSU income) or they don’t know to ask for the documentation that proves it.
How RSU Income Is Averaged
When RSU income qualifies, lenders average it over 24 months (the 2-year history). So if you vested $60,000 in RSUs year one and $80,000 in year two, the lender uses $70,000/year ($140,000 / 2) as your qualifying RSU income — in addition to your base salary.
If your RSU income is declining year over year (e.g., you got a large new hire grant that’s tapering off), the lender will use the declining trend and may count less.
Documentation You’ll Need for RSU Income
Prepare to provide:
- Two years of W-2s — RSU income appears in Box 1 and Box 12 (Code V for non-qualified options)
- Two years of Form 1040 with all schedules
- Equity award grant letters — showing original grant dates, share amounts, and vesting schedules
- Current vesting schedule — a screenshot or PDF from your equity platform (Schwab Equity Awards, Fidelity, Morgan Stanley, Carta, etc.) showing remaining unvested shares and future vest dates
- Most recent brokerage statement showing vested shares and sale history (to cross-reference with W-2 income)
- Employment verification letter confirming ongoing employment and that equity grants are part of ongoing compensation
The grant letter and vesting schedule are critical for the 3-year continuance test. Don’t assume your lender will know to ask for these — bring them proactively.
ESPP Income: Similar Rules, Different Flavor
Employee Stock Purchase Plans (ESPPs) allow you to buy company stock at a discount (typically 15% below the lower of the beginning or end price of a purchase period). When you sell, the discount is taxed as ordinary income.
ESPP income follows similar rules to RSU income:
- 2-year history required
- Must be documented through W-2s and tax returns
- Continuance must be established
- Plan details (enrollment confirmation, purchase history) serve as supporting documentation
ESPP is generally a smaller component of compensation than RSUs, but for qualifying purposes, every dollar of income matters — especially for jumbo loans.
Bonus Income: Same 2-Year Rule
While we’re on the subject of variable comp: bonus income (discretionary or performance-based) requires the same 2-year history and is averaged the same way. If you received a $50,000 bonus in 2024 and a $75,000 bonus in 2025, the lender uses $62,500/year as qualifying bonus income.
If your bonus declined, they’ll use the declining trend. If you received a bonus only once in two years, it may not qualify.
Jumbo Loans for High-Earning Tech Workers
If you’re buying in Palo Alto, Austin’s Hyde Park, or certain Atlanta suburbs, the loan amount may exceed the conventional conforming limit (currently $806,500 for most areas in 2026, higher in high-cost markets).
For jumbo loans, lenders have their own guidelines — they’re not beholden to Fannie/Freddie rules. This can go either way for RSU income:
- Some jumbo lenders are more flexible about variable income because they’re underwriting the whole borrower profile, not just following a checklist
- Others are more conservative because they’re keeping the loan on their own books
Portfolio jumbo lenders — particularly those serving tech professionals — have become quite sophisticated about RSU income. They understand that a senior engineer at a major tech company with $200,000 in annual vesting RSUs has different income stability characteristics than a small business owner with variable receipts.
Real Income Scenarios: Texas vs. California
Scenario 1: Software Engineer, Austin, TX
Compensation: $170,000 base + $80,000/year RSU vesting (2-year average) + $20,000 bonus (2-year average)
Total qualifying income: $270,000/year
Target home price: $900,000 (conforming jumbo in Austin area)
Down payment: 20%
Loan amount: $720,000
With a clean 2-year RSU history and documented continuance, this borrower qualifies comfortably. Texas has no state income tax, which further improves cash flow analysis.
Scenario 2: Product Manager, San Francisco, CA
Compensation: $200,000 base + $150,000/year RSU vesting + $30,000 bonus
Total qualifying income: $380,000/year
Target home price: $1,800,000 (non-conforming jumbo)
Down payment: 20%
Loan amount: $1,440,000
This requires a jumbo lender comfortable with tech worker compensation. California income taxes are high, which underwriters factor in for residual income. The borrower needs to shop specifically for a tech-savvy jumbo lender. With strong credit and documented RSU history, it’s very doable.
Scenario 3: H1B Data Scientist, Dallas, TX
Compensation: $160,000 base + $60,000/year RSU vesting (year 1 of vesting history)
Total qualifying income: Only $160,000 qualifies (RSU history too short)
Target home price: $550,000
Loan amount: $440,000 (20% down)
In year one of RSU vesting, this borrower should use base salary only for qualification, plan to buy at a price supported by base income, and revisit in 12 months when 2-year RSU history is established. Alternatively, a larger down payment reduces the qualifying income needed.
FAQ
Q: My RSU income is all at one tech company. Does it count as “guaranteed” income?
A: No income is guaranteed in employment, but RSU income that’s been consistently received for 2+ years and has documented future vesting is treated as likely to continue. The lender is looking at probability, not guarantees.
Q: Can I use RSU income even if I’ve changed companies in the last 2 years?
A: If you have RSU vesting income on W-2s from two different employers over a 2-year period, lenders can sometimes bridge this — but it complicates the file. Be prepared to explain the timeline. The continuance documentation must come from your current employer.
Q: I have unvested RSUs worth $500,000. Can those be counted as assets?
A: Generally no, for qualification purposes, because they’re not liquid. Vested shares held in your brokerage account are assets. Unvested grants are not — they’re contingent on continued employment.
Q: Does RSU income affect my debt-to-income ratio calculations?
A: Yes — qualifying RSU income increases your total income, which improves your DTI ratio and may allow you to qualify for a larger loan.
Q: What if my company did layoffs recently and my job feels less secure?
A: This is a practical concern the underwriter can’t directly assess. But if your employment is in good standing, your RSU vesting history is documented, and your income meets guidelines, you can still qualify. The lender doesn’t have a crystal ball any more than you do.
Ready to get started? Masala Loans by Matador Lending specializes in exactly this. Call 713-366-4668 or get your no-haggle rate at masalaloans.com.
Matador Lending NMLS #1871433. Licensed in TX, FL (#MBR4588), GA (#69244), CA (#60DBO-112763).
