High-Net-Worth Lending
Mortgages with RSU, ISO, and Bonus Income
How RSU vesting, ISO and NSO exercises, and bonus income are treated for qualifying. The lender overlays that matter, and the structures tech workers actually use to buy homes in SF, NYC, Seattle, Austin, and similar markets.
Quick answer
Most lenders count RSU and bonus income with a 2-year history and a remaining vesting schedule. Some lenders accept 1 year of history with strong comp factors, which is the program minimum on certain investors. ISO and NSO income is generally not counted as ongoing qualifying income because exercise timing is borrower controlled.
How Most Lenders Treat RSU / Equity Compensation
RSU income
Standard overlay is 2 years of received RSU income (pay stubs or W-2s) plus a remaining vesting schedule showing at least 3 more years of grants. Some lenders accept 1 year of history with comp factors. We work with lenders going to program minimums where allowed, so a 1-year history is workable when the rest of the file supports it.
ISO / NSO income
Stock option income is recognized at the point of exercise (NSO) or qualifying disposition (ISO). Because exercise timing is borrower controlled, lenders rarely treat option income as ongoing qualifying income. It is more useful as a documented source of funds for the down payment and reserves.
Bonus income
Standard overlay is a 2-year average of received bonus, with employer confirmation of continuation. Some lenders accept a 1-year history when the employer letter is explicit about the ongoing bonus structure. Sign-on bonuses are generally excluded.
Per-Program Specifics
Conventional (Fannie Mae / Freddie Mac)
RSU vesting schedule plus 2 years of pay stubs / W-2s typically required for income. Some lenders permit a 1-year history with strong compensating factors: high base salary, long employer tenure, and a sizable remaining vest. Continuation has to be documented through the remaining grant schedule.
Jumbo
Jumbo investors vary widely on RSU treatment. Several high-end jumbo programs are flexible with equity comp on strong portfolios, including 1-year history acceptance with comp factors. The best move on a jumbo file with significant RSU income is to shop the scenario across multiple jumbo investors instead of taking the first quote.
Asset-qualifying as an alternative
If equity comp is too volatile or short-tenured to qualify cleanly, an asset-qualifying (asset depletion) program can be a cleaner path. Instead of reconstructing the income story, the lender qualifies you based on liquid asset balances. See our asset-qualifying page for the mechanics.
RSU-Specific Issues
Concentration risk
When employer stock is a large percentage of net worth, some lenders apply a discount to the RSU income or require additional reserves. The reasoning is that the income source and a large portion of the asset base are correlated to the same employer.
Cliff vs ratable vesting
RSUs that vest on a cliff (one-year first vest, then quarterly or annually) are documented slightly differently than ratable grants. Underwriters need a clear grant agreement showing when shares vest and at what value, and they will not count grants that have not yet hit the first cliff.
Refresh grants
Annual refresh grants are common at large employers and matter for showing continuation. A new grant scheduled to begin vesting in the next year supports the lender’s view that RSU income will continue. The grant letter has to be in the file.
ISO / NSO Considerations
AMT exposure
ISO exercises trigger AMT in the year of exercise even if you hold the shares. Lenders look at total tax liability when qualifying income is reconstructed from tax returns, and a large AMT year can complicate the picture. Plan exercise timing with your CPA before the mortgage application starts.
Pre-IPO vs public-company options
Pre-IPO ISOs are typically not usable as down payment funds because the shares are illiquid. Public-company options can be exercised and sold for documented down payment funds. The structures and timing differ significantly. See our pre-IPO mortgage page for the specific scenarios.
Exercise and hold strategies
Exercising and holding ISOs preserves long-term capital gains treatment but reduces liquidity available for the down payment. Borrowers who plan to do this often pair the strategy with a pledged-asset structure so that the down payment comes from pledged securities rather than from selling.
Bonus Income
Standard treatment is a 2-year average of received bonus income with employer continuation confirmed. We work with lenders that accept a 1-year history when comp factors and the employer letter support it.
Sign-on bonuses are typically excluded unless they are structured as an ongoing multi-year payment. Retention bonuses and stay bonuses tied to a specific period are usually counted only over their stated duration.
Strategies for Tech Workers
Size the loan to stable income
Match the loan amount to W-2 base plus a conservative RSU contribution. Treating the full RSU upside as qualifying income can produce a tight DTI that becomes a problem if the next year’s vest value drops with the stock.
Use vested equity for down payment
Selling vested RSUs at vest is already a taxable event at ordinary income rates, so using those proceeds for the down payment does not create incremental tax. The cash should be seasoned in your account for at least 60 days before closing.
Asset-qualifying or pledged-asset paths
When equity comp is too volatile to qualify cleanly or the borrower wants to avoid selling, an asset-qualifying program or a pledged-asset mortgage is often the cleaner structure. The mortgage runs on the balance sheet rather than reconstructed income.
Pre-IPO timing
If a liquidity event is on the horizon, the right mortgage strategy may be bridge financing today and a permanent loan after the lockup expires. See pre-IPO mortgage for the timing playbook.
Frequently Asked Questions
Will lenders count my RSU income?+
Yes, on most agency and jumbo programs, with documentation. Lenders generally need a 2-year history of received RSU income (pay stubs or W-2s) plus a remaining vesting schedule showing at least 3 more years of grants. Some lenders are more permissive and accept a 1-year history with strong compensating factors. We work with lenders going to program minimums where allowed.
How much RSU income counts toward qualifying?+
Typically the 24-month average of received RSU income, sometimes the lower of the 24-month average and the most recent 12 months. Future grants are not counted as guaranteed income, but the remaining vesting schedule is required to demonstrate continuation. Concentration risk in employer stock can also reduce the credit lenders give to RSU income.
What if I exercise ISOs to get the down payment?+
Exercising ISOs can produce the cash for a down payment, but it also creates AMT exposure that varies year to year. Lenders want to see the source of funds documented and seasoned, typically 60 days in your account. If the exercise is recent, expect questions about AMT impact on the qualifying income and on the overall cash flow picture. Plan the exercise timing around the closing schedule with your tax advisor.
Can I qualify with only 1 year of RSU income?+
Sometimes yes, depending on the lender and the strength of the rest of the file. Standard agency overlay is 2 years, but program minimums and certain investor overlays accept 1 year combined with a remaining vesting schedule. Comp factors that help include a high base salary, long employer tenure, a large remaining vest, and strong reserves.
Does employer stock concentration hurt my application?+
It can, in two places. First, lenders sometimes discount RSU income when the borrower’s employer is also a heavy concentration in their net worth, because the income and the asset are correlated. Second, on pledged-asset programs employer stock is typically eligible only up to a stated concentration cap, often 10% to 25% of the pledged portfolio.
How is a sign-on bonus treated?+
Sign-on bonuses are typically excluded from qualifying income because they are one-time. If the sign-on is structured as an ongoing payment over multiple years and the employer letter confirms continuation, some lenders will include it.
Can I use pre-IPO stock for a down payment?+
Not directly. Private company stock is generally illiquid and not usable as down payment funds until a liquidity event or secondary sale. There are bridge structures and asset-qualifying paths that work around this. See our pre-IPO mortgage page for the specific strategies.
Price a mortgage with equity comp income
The live pricer handles conventional and jumbo scenarios. For complex equity comp files - 1-year RSU history, recent job change, large refresh grants, pre-IPO timing - email us with the specifics and we will run it through the right lender set.
HNW lending hub
All HNW programs we work with
Asset-qualifying
Qualify on assets, not income
Pre-IPO mortgage
Liquidity-event timing
Rates, eligibility, and program guidelines vary by lender and are subject to change. This page is general educational information and is not a commitment to lend or an offer of credit. Tax and investment strategy implications should be discussed with your own financial, tax, and legal advisors. Equal Housing Opportunity.