RSU Income in Mortgage Underwriting: The 2-Year Rule Lenders Apply

A senior IC at a public tech company makes $220K base plus $250K in RSU vests each year. Their total comp is $470K. When they apply for a jumbo mortgage, the question is: how much of that $470K does the underwriter actually count?

The answer: usually all $220K of base, plus most of the $250K of RSU income, but only if they document it correctly. Get the paperwork wrong and the lender may count base salary only, which can cut borrowing power by 40-50%.

Fannie Mae, Freddie Mac, and most non-conforming lenders follow a 2-year history rule for variable income like RSUs. You need 2 years of consistent vesting (the historical side) plus evidence of continued vesting for at least 3 more years (the forward side). The underwriter averages the past 2 years of vest income and uses that average as the qualifying number.

The two-year history requirement

Lenders require two consecutive years of vested RSU income, usually evidenced by:

Two prior years of W-2s showing RSU income (Box 1 minus base salary plus employer 401(k) pretax, roughly)
Two prior years of paystubs or year-end equity statements from the employer
Employer verification of vesting schedule and historical vests
Brokerage statements showing share deposits at vest dates

For a new hire with only one year of vesting history, lenders typically exclude RSU income entirely. The borrower is qualified on base alone until the second year’s vest lands.

This is the most common surprise for people who recently joined a hot startup or tech company. Your RSU income from month 13 onwards looks real to you but doesn’t count for 11 more months.

The three-year forward projection

The historical number is trimmed by the forward outlook. Lenders want to see that the RSU income will continue for at least 3 more years to include it in qualification.

Documentation required:

Current grant agreement showing future vesting dates and quantities
Vesting schedule from the employer’s equity portal
Confirmation that the borrower is not on a PIP or otherwise at risk of separation
Sometimes a vesting projection letter from HR

A borrower with a large RSU grant that’s fully vesting in 12 months (no additional grants) may see the lender exclude RSU income entirely because there’s no forward continuity.

The 2-year average calculation

Most lenders average the past 2 years of RSU income and use that as the monthly number for DTI. If 2023 RSU income was $200K and 2024 RSU income was $280K, the qualifying figure is $240K per year, or $20K per month.

Some lenders apply a trim factor (85-90%) to account for stock volatility. A $240K average might get counted as $204K-$216K for DTI purposes.

Non-conforming jumbo lenders at Schwab, UBS, First Republic’s successor desks, and portfolio lenders sometimes use different averaging methods, most recent year only, or current grant schedule projected forward, for high-net-worth borrowers. These are exception-based and require manual underwriting.

What counts as RSU income on a W-2

The RSU vesting income appears in W-2 Box 1 (wages) and Box 14 (supplemental, labeled “RSU” or similar). Total comp = Base + Bonus + RSU vest value + ESPP discount + other.

Documentation challenge: the W-2 doesn’t distinguish between base, bonus, and RSU unless Box 14 is itemized. Lenders often request:

Paystub showing year-to-date base and supplemental
Year-end summary from employer payroll
Form 3922 for ESPP
Equity portal statements

A senior IC with multi-source compensation should pull all these documents together for the lender rather than expect the underwriter to decode it.

RSU income is share count × stock price at vest. Both vary. A borrower vesting 1,000 shares at $150 has $150K of income. If the stock drops to $100 next year for the same 1,000 shares, it’s $100K.

Underwriters handle this two ways:

Most use the historical dollar amount (backward-looking)
Some apply a 20% haircut to the most recent year if the stock declined materially

For tech companies with volatile prices (Meta, Tesla, Snap historically), this matters. A borrower who borrows aggressively against a peak-price vest year may find themselves unable to refinance if the stock drops and re-qualification uses the lower year.

The verification-of-employment friction

Underwriters typically contact the borrower’s employer to verify income and employment status. For RSU income, the verification includes:

Confirmation of grant value and vesting schedule
Historical vest amounts
Probability of continued employment (usually a vague “borrower is in good standing”)

Large tech employers have specialized HR processes for mortgage verification. Medium-sized or private companies may not. Brokers often recommend that borrowers give HR 2-4 weeks advance notice before starting the application.

Non-QM and portfolio lender paths

If you don’t meet the 2-year rule, new job, recent promotion, accelerated vesting, non-QM (non-qualified mortgage) and portfolio lenders offer alternative paths:

Asset-depletion loans (qualifies on liquid assets, not income)
Bank-statement loans (deposits over 12-24 months, not W-2)
Exception-based private bank loans for existing wealth-management clients

These paths cost more (rates 50-150bps higher) and require stronger net worth. But they sidestep the 2-year rule entirely.

Timing relative to job changes

Job change affects RSU income counting in specific ways:

Unvested RSUs at old employer are forfeited (typical)
New employer’s RSU grant starts a fresh 2-year clock
Some lenders accept the new grant with employer letter if the new job is in the same industry at similar comp level

A senior IC considering a job change should plan any mortgage application around the move. Applying before the move uses the old-employer RSU history. Applying after the move uses the new-employer history, which may take 2 years to establish.

Frequently asked

Can I use pre-IPO RSU “value” for qualification? Generally no for conforming loans, because pre-IPO RSUs are illiquid and the 409A valuation isn’t recognized as income. Some portfolio lenders will consider pre-IPO grant value with a heavy haircut for very wealthy borrowers, but this is rare.

What about bonus income? Same 2-year rule. Bonuses need 2 years of history plus expected continuation. A discretionary bonus paid every year is treated similarly to RSU vests.

Do lenders count vested-but-unsold RSUs? As income, yes (based on W-2). As assets, yes (based on brokerage statement value). Some lenders double-count these for DTI and down payment purposes; some apply an asset haircut of 30-40%.

Does my RSU withholding rate affect qualification? Not directly. Lenders use gross income, not net. Over-withholding or under-withholding doesn’t change the qualification number, but it does change the borrower’s monthly cash flow.

How does this interact with the SSA wage base? Not really. SSA wage base ($176,100 in 2025) caps Social Security payroll tax but doesn’t affect mortgage qualification. Lenders look at gross W-2 income regardless of FICA cap.