Using RSUs to buy a home works differently than using regular salary because lenders don’t count unvested stock the same way they count a paycheck. Most lenders will only count RSU income once you have a two-year vesting history and can show your employer is likely to keep issuing grants — a single new-hire grant with no track record usually won’t count toward qualifying income, even if it’s worth a lot on paper.
That distinction matters because it means your salary alone, not your total compensation package, often determines how much mortgage you qualify for in the early years at a company. See Jumbo Loans Explained for High Earners for how this plays out once your qualifying income crosses into jumbo territory, which is common in the Bay Area.
Selling vested shares for a down payment
Many tech buyers plan to sell some vested RSU shares to fund part of their down payment. A few things to think through before you do:
- Shares held less than a year are taxed as short-term capital gains at your ordinary income rate; shares held over a year qualify for long-term capital gains rates.
- Selling a large block at once can push you into a higher tax bracket for that year.
- Lenders will want a paper trail (brokerage statements) showing the source of funds, so plan the sale a few months before you apply, not the week of your offer.
Using RSUs as ongoing qualifying income instead
If you’d rather keep your shares invested than sell them, some lenders will average two years of vested RSU income (documented via your W-2 and vesting schedule) and count a portion of it toward your qualifying income, similar to how they treat bonus income. This usually results in a higher approved loan amount than salary alone, without touching your equity position. Ask your loan officer directly whether they underwrite RSU income this way — not all of them do.
Two incomes, two stock plans
If you and a partner both receive equity compensation, combining two vesting schedules can complicate how a lender documents your income. Two-Income Households: Combining Buying Power covers how lenders typically handle this.
For the full picture of what else affects your buying power and the rest of the purchase process, start at the Tech Employee’s Guide to Buying in Silicon Valley, or the general Complete Buyer’s Guide.
The IRS’s topic page on stock options and equity compensation explains how vesting and sale timing affect your tax bill — review your specific grant type (RSUs vs. ISOs vs. NSOs) with a tax professional before deciding when to sell.
A quick example
Say you have $150,000 in vested RSUs and your lender agrees to count two years of vesting history as qualifying income. That documented income, on top of your salary, can move you from a conforming loan into jumbo-loan territory — which changes your rate, your down payment requirement, and sometimes your reserve requirements. This is exactly why it’s worth having this conversation with a loan officer before you start touring homes, not after you’ve already found one you want to offer on.
Already own a home you’d need to sell first?
If buying your next home depends on selling an existing one, get a free estimate at the Home Value Estimator and review the Seller’s Guide for how to time both sides of the move.
This page is general information, not tax or lending advice. How RSU income and asset sales are treated varies by lender, employer plan, and individual tax situation — consult a licensed mortgage professional and a tax advisor before making decisions about selling or holding stock compensation.
Laxmi Penupothula · Intero Real Estate · DRE #02047105 · Serving Fremont, Milpitas, San Jose, Santa Clara, Union City & Newark. Equal Housing Opportunity.