How Fannie Mae and Freddie Mac Treat RSU Income in 2025

 

Introduction

Restricted stock units (RSUs) are a common form of compensation for tech professionals and employees at large corporations. While RSUs can make up a significant part of income, they are not always straightforward when it comes to qualifying for a mortgage.

This blog dives into how Fannie Mae and Freddie Mac, the two largest conventional mortgage agencies, treat RSU income in 2025. Their guidelines set the standard for conventional loans, and understanding their rules is the first step for anyone hoping to use RSUs in the qualification process.

 

Why Agency Guidelines Matter

Most lenders sell their loans to Fannie Mae or Freddie Mac after closing. That means they must follow the agencies’ rules on which types of income can be counted. If your RSU income does not meet their criteria, it usually will not be included in your qualifying income calculation.

This is where things can get tricky. Unlike salary, RSUs are not guaranteed and often depend on vesting schedules, stock performance, and company policies. Agencies want to see that RSUs represent reliable, ongoing income before they allow them to count toward your mortgage approval.

 

Fannie Mae Guidelines for RSU Income

Fannie Mae treats RSUs under its category of “other income sources.” To qualify:

1. RSUs must be vested and distributed
   • Only vested and distributed RSUs can be counted. Unvested or restricted shares are excluded.
2. History of receipt is required
   • Time-based RSUs: At least 12 months of vested and distributed income from the current employer.
   • Performance-based RSUs: At least 24 months of history. In some cases, 12–24 months may be accepted if there are strong compensating factors such as a stable employer or evidence of ongoing awards.
3. Future continuation must be documented
   • The vesting schedule should show additional shares or cash distributions in the future.
   • If the vesting schedule ends soon, documentation of new or ongoing grants may be required.
4. Public company requirement
   • RSUs must come from a publicly traded company. Private company RSUs are generally not accepted.
5. Documentation requirements
   • RSU grant letter.
   • Vesting schedule (past and future).
   • Employer verification of future awards.
   • Brokerage or stock statements.
   • Paystubs and W-2s showing RSU income.

 

Freddie Mac Guidelines for RSU Income

Freddie Mac’s rules are similar, though sometimes interpreted slightly differently:

• They also require RSUs to be vested and distributed.
• A history of receipt is needed, typically 12 months for time-based RSUs and 24 months for performance-based.
• Continuance must be shown with future vesting schedules or employer documentation.

In practice, Freddie Mac can be marginally more flexible in certain scenarios, but the overall expectations mirror Fannie Mae’s.

 

Key Differences Between Time-Based and Performance-Based RSUs

Agencies make a clear distinction:

• Time-based RSUs vest predictably (for example, 25 percent per year). Since the vesting is scheduled, agencies allow them to be used with just one year of history.
• Performance-based RSUs depend on company or individual goals being met. Because they are less predictable, agencies generally require two years of history.

Borrower takeaway: If your RSUs are time-based, you can use them sooner. If they are performance-based, you will need more history and stronger documentation.

 

Challenges Borrowers Face

Even when RSUs meet the agency rules, borrowers often hit roadblocks:

• Incomplete documentation: Missing vesting schedules or grant letters can delay approvals.
• Stock volatility: A falling share price can reduce qualifying income.
• Limited history: New employees or those with fewer than 12 months of vesting may not be able to use RSUs yet.
• Employer stability: Lenders consider layoffs or corporate instability as risk factors.

We cover these in more detail in our blog: Top 7 Mistakes Borrowers Make When Using RSUs for a Mortgage.

 

Why Working With a Broker Matters

The guidelines are written in black and white, but interpretations vary. One lender may reject your RSU income, while another may allow it with the same documentation.

This is where working with a mortgage broker makes a difference:

• Brokers have access to multiple investors. If one declines based on their interpretation of Fannie or Freddie rules, we can pivot to another who may be more flexible.
• Big banks are limited. If you go directly to a large retail bank, you are locked into their interpretation. With RSUs being a developing area in mortgage lending, this can mean the difference between approval and denial.

 

Example: How Guidelines Apply in Real Life

Borrower A works for a Fortune 100 company with steady, time-based RSUs for three years. They provide W-2s, paystubs, and a vesting schedule showing future awards. Result: RSUs are fully counted under Fannie Mae rules.

Borrower B recently joined a mid-stage tech startup with performance-based RSUs. They have only 10 months of vesting history and no guaranteed future schedule. Result: RSUs are excluded until more history is documented.

 

What Borrowers Should Do Now

If RSUs are part of your compensation and you plan to buy a home:

• Gather your grant letter, vesting schedule, and past W-2s.
• Track your vesting history carefully.
• Confirm your employer’s future grant policy.
• Talk to a mortgage advisor early, especially if RSUs make up a large share of your income.

 

Conclusion

Fannie Mae and Freddie Mac do allow RSU income to count toward mortgage qualification, but the rules are strict. The type of RSU, your vesting history, and your documentation all matter.

Because RSU income is still a growing concept in mortgage lending, interpretations vary across lenders. That’s why working with a mortgage broker can be so valuable. Instead of being locked into one lender’s view, a broker can shop your file with multiple investors to find the best path forward.

This blog is part of our RSU and mortgage series. Be sure to also read: Documentation Checklist: Proving RSU Income for Mortgage Approval for a step-by-step look at the paperwork you’ll need.