Income · Fannie Mae Selling GuideRSU income for a mortgage: how Fannie Mae counts restricted stock

Many tech and corporate employees are paid partly in restricted stock units. Fannie Mae's Selling Guide (B3-3.3-07) lets restricted stock count as income once it has vested and been distributed to the borrower without restrictions – but sign-on bonuses paid in restricted stock never count, however they vest. The lender documents the income with a verification of employment (Form 1005) showing the distributions, or the latest paystub and two years of W-2s, plus evidence the stock is publicly traded, the current vesting schedule with past and future vesting, the 200-day moving average share price for stock paid in shares, and brokerage or bank statements showing prior distributions; a verbal verification of employment is also required. For performance-based awards two years of history is recommended, but 12 to 24 months can work with offsetting factors such as future vesting at least equal to past vesting for 24 months, or five years of restricted stock income from any employer. Time-based awards need 12 months with the current employer, and a one-time award must keep vesting for at least three years from the application. The income is averaged over the most recent 24 months – for shares, the 200-day moving average price times the vested shares distributed in that period, divided by 24; for cash, the cash distributed divided by 24 – or over the actual months when the history is 12 to 24 months.