Tech Equity Compensation
Mortgages Before and Right After Your Company's IPO
Paper wealth before an IPO and post-lockup illiquidity after make traditional mortgage qualification awkward. Here is how the timing actually works and what to do in each window.
Quick answer
Pre-IPO equity is generally not counted as either income or assets by most lenders. During the 90 to 180 day post-IPO lockup you can see the wealth on the screen but cannot sell. The path forward is usually asset-qualifying, pledged assets, or a short bridge, with a clean liquidation plan ready for the moment the lockup releases.
The Pre-IPO Qualification Problem
- -Unvested RSUs are not assets. For most lenders, an RSU grant on a private company is paper. There is no market price, no immediate liquidity, and no documented continuation.
- -ISO and NSO exercises have a real cost. Pre-IPO exercises bring AMT exposure on the spread between strike and 409A fair market value, and the cash to fund the exercise has to come from somewhere. Not tax advice. Consult your own CPA.
- -Income looks small relative to wealth. A senior tech employee with multi-million dollar equity often shows W-2 base plus a modest bonus, and the underwriter sees only the W-2.
Strategies Before IPO
Asset-qualifying
If you have a meaningful liquid portfolio outside your concentrated pre-IPO equity, an asset-qualifying program can convert that portfolio into qualifying income without you needing to show high W-2 earnings.
Pledged Asset Mortgage
Keep your separate brokerage portfolio invested and pledge it as additional collateral. See our pledged asset mortgage page for how it works and when it makes sense.
Bridge financing
A short-term bridge loan can provide cash for a down payment while you wait for the IPO and lockup release. The cost is real; the math needs to make sense.
Co-borrower or family gift
A parent or spouse with documented income and assets can co-borrow or gift part of the down payment, depending on the program. Documentation rules apply.
Wait if you can
Even a strong borrower has fewer and more expensive options pre-IPO. If the timing is flexible, planning around a post-lockup purchase often produces a better rate, a larger down payment, and a cleaner file.
The Post-IPO Lockup Period (Typically 90 to 180 Days)
The lockup is the window between the IPO and the date insiders, employees, and other restricted holders can sell. The exact terms are in the offering documents and your stock plan, but 180 days is the common default.
During the lockup you can see daily mark-to-market wealth that you cannot touch. The mortgage path during this window depends on what other liquidity you have:
- Specialty lenders may accept a post-IPO 10b5-1 plan as evidence of a scheduled liquidity source.
- Some lenders accept publicly traded company stock as pledged collateral, with a substantial haircut and concentration limits.
- Short-term bridge loans are common, with the take-out being post-lockup share sales.
- Asset-qualifying remains available if your separate liquid portfolio carries it.
Right After the Lockup Expires
Once the lockup releases, the shares are sellable subject to any insider trading windows and Rule 144 limitations for affiliates. Now you can:
- Liquidate to fund the down payment, reserves, and post-close cash position.
- Plan the tax impact: federal short-term capital gains are taxed as ordinary income, long-term as 0%, 15%, or 20%, plus state and possible Net Investment Income Tax. Not tax advice. Consult your own CPA.
- Use a 10b5-1 plan if you are an executive, an affiliate, or otherwise subject to insider trading rules. Setting up the plan in advance can give you trading windows aligned with your purchase timeline.
- Consider whether to keep concentrated company stock or diversify before the down payment use.
Common Mistakes
- -Exercising ISOs at IPO without a tax plan, then being hit by AMT.
- -Assuming the share price at IPO will hold through the lockup, and signing a purchase that only works at the IPO-day price.
- -Not pre-qualifying before IPO. Even if the answer is "wait until lockup releases," you want to know what is possible and what is not.
- -Concentrating all your down payment in your employer's stock during the lockup. A price move can undo a year of planning.
Frequently Asked Questions
Can I get a mortgage before my company IPOs?+
Yes, but it is harder than after. Conventional and jumbo lenders generally do not count unvested RSUs or restricted stock as either income or assets. Your qualifying picture is base salary, bonus history, and whatever liquid assets you actually hold outside the company. If that is enough on its own, a standard mortgage works. If not, asset-qualifying, pledged asset programs, or a bridge loan can fill the gap.
Will lenders count my unvested RSUs?+
On a private pre-IPO company, generally no. The shares are not publicly tradable, the valuation is internal (409A), and lenders treat them as paper. On a public company post-IPO, vested RSUs already shown on past pay stubs and tax returns can sometimes count as income if there is a documented continuation pattern. Unvested RSUs at a public company can occasionally be used by specialty lenders with a discount, but it is not standard.
How long is the typical IPO lockup?+
Most modern IPOs use a 180-day lockup. Some have shifted to staggered or early-release lockups (for example, 90 days for some early tranches), and some include trading-window-based releases tied to earnings. Your individual lockup is in your stock plan documents and the prospectus.
Can I pledge restricted stock as collateral?+
Some specialty lenders accept publicly traded vested stock as pledged collateral, typically with a significant haircut on advance rate and concentration limits if it is your employer's stock. Restricted stock (still subject to Rule 144 holding or insider trading restrictions) is much harder; some lenders accept it, many do not, and pricing reflects the constraint.
What is a 10b5-1 plan?+
A 10b5-1 plan is a pre-arranged trading plan that allows insiders and others with material non-public information to buy or sell company stock on a defined schedule. Lenders sometimes view a properly adopted 10b5-1 plan as evidence of a predictable liquidity source, which can help support the income or asset picture. Setup typically requires legal and compliance review with your employer. Not legal or tax advice. Consult your own attorney and CPA.
Should I exercise my ISOs at IPO?+
There is no one right answer. The exercise itself can trigger Alternative Minimum Tax (AMT) on the spread, and the share price after IPO can move significantly during your lockup. Many people work through this with a tax-aware financial planner well before the IPO date. Not tax advice. Consult your own CPA.
I want to buy a home the day my lockup ends. What do I do now?+
Start the financing conversation 60 to 90 days before lockup expires. Get pre-qualified on whatever you can support without the stock. Pre-build the documentation a lender would want for your post-lockup liquidation plan. If you have a brokerage portfolio separate from your company stock, a pledged asset mortgage (see our page) can keep you invested while you buy. Coordinate the offer and the sale window so you are not making a non-refundable purchase commitment contingent on a stock price that can move.
Plan the financing around the lockup
We work with tech employees through pre-IPO, lockup, and post-lockup windows. Email us with your scenario and we will map out the options.
Asset-qualifying
Qualify on portfolio, not W-2
Pledged asset mortgage
Keep the portfolio invested
Bridge loan
Short-term liquidity
Eligibility, rates, 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 estate strategy implications should be discussed with your own financial, tax, and legal advisors. Equal Housing Opportunity.