Vesting Toward a Down Payment

If a chunk of your income comes from restricted stock units, you may have already heard "that doesn't count" from a lender who didn't know how to document it. Here's what actually goes into qualifying with RSU income — and how to make sure it works in your favor.

If you work in tech anywhere from San Jose to San Francisco, there's a good chance a meaningful piece of your income doesn't show up as a simple salary line. It shows up as restricted stock units — RSUs — vesting a few times a year, and it can easily be a third or more of what you actually earn.

I hear a version of the same story often: a buyer sits down with a big bank, hands over their pay stubs, and gets told their RSU income either "doesn't count" or barely moves the needle on what they qualify for. They walk away thinking they can't compete in this market, even though their real, documented income says otherwise. Usually what happened isn't that RSU income doesn't count — it's that the lender either didn't ask for the right documents or didn't have a program built to evaluate it properly.

Why RSU Income Trips Up Some Lenders

RSU income is real income, but it doesn't look like a paycheck. It fluctuates with a stock price, it vests on a schedule set by your employer, and it can look very different from one company to the next — some front-load vesting in the first two years, others spread it evenly over four. A lender working from a standard checklist built around W-2 salary and hourly wages can struggle to fit RSUs into that box, especially if they don't regularly work with Bay Area tech employees.

That's a lender problem, not a borrower problem. Underwriting guidelines from Fannie Mae and Freddie Mac do allow RSU income to be used for qualifying — the key is documenting it the way investors expect.

What Lenders Actually Look For

Most conventional programs want to see a consistent vesting history with your current employer, generally at least a year or two of RSUs actually vesting and showing up on your W-2, along with a vesting schedule confirming the grants are expected to continue for the next few years. Because share prices move, lenders typically don't just take today's stock price at face value — many average the price over a trailing period (commonly around a year) and apply a conservative discount, so the number that ends up counting toward your qualifying income is usually more modest than your total grant value on paper.

One more thing worth knowing: RSU income usually can't make up the entire picture. Most programs cap how much of your total qualifying income can come from RSUs, so it works best as a strong supplement to a base salary rather than a replacement for one.

Where This Matters Most in the Bay Area

This isn't an abstract exercise here. With median prices in San Jose and the surrounding South Bay well into seven figures, plenty of buyers with strong total compensation still end up needing a jumbo loan to close the gap. When RSU income is documented correctly, it can be the difference between qualifying for the home you actually want and qualifying for a smaller number than your real earnings support.

Let's Look at Your Numbers

Every RSU situation is a little different — your vesting schedule, your employer, how long you've been there, and how much of your income it represents all factor in. If you'd like to walk through what your RSU income could look like on paper before you start house hunting, I'm happy to sit down and go through it with you.