restricted stock in the homebuying process

A lender will permit the use of vested restricted stock units (RSU) as reserves or income for qualifying purposes.

If you are in the Silicon Valley or anywhere else that has startups offering restricted stock units, there is now good news if you want to get a mortgage.

Lenders had no clue how to actually use the RSU for mortgage qualifying but I have one lender that finally gets it. Here are the criteria:

  • RSU can be used as income for qualifying purposes if the applicant paid income taxes on receipt of the stock.
  • borrower must demonstrate two-year history of receiving RSU as a form of compensation with a strong indication that the receipt of RSU is likely to continue.
  • documentation regarding the conditions under which RSU can be redeemed.
  • borrower must be 100% vested in stock being used for income.

Have questions? Contact me fred at arrivva dot com or 650 935 5626.

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