The Quick Read: Lenders document restricted stock units and deferred compensation by proving what you have actually received, not what you have been promised. Vested, distributed shares and deferred-comp payouts already being paid can count as income, subject to the lender’s history and continuance tests. Unvested grants and balances still accruing generally do not. Most files turn on the documented income and the lender’s own underwriting standards.
Key Takeaways
- Only income the lender actually relies on has to be documented, but whatever it relies on has to be verified with reliable records.
- RSUs count after they vest and are distributed to you without restrictions. A grant’s headline value is not income.
- Deferred compensation is treated case by case. Expect the lender to ask for proof of receipt and proof it will continue.
- Qualifying income is usually an averaged figure, so it can come in lower than your paycheck suggests.
- Program figures below are subject to lender guidelines and full file review. Nothing here is a commitment to lend.
What Is a Jumbo Cash-Out Refinance for Equity-Compensation Earners?
A jumbo cash-out refinance replaces your current mortgage with a larger one and hands you the difference in cash. It is “jumbo” when the new loan starts one dollar above your county’s conforming limit. FHFA sets those limits each year, and the ceiling in high-cost counties is 150% of the baseline. Check your own county’s number on FHFA’s conforming loan limit page instead of trusting a blog post.
Why does the pay mix matter? Because a base salary is simple to document and equity pay is not. A paystub shows salary every two weeks. Deferred compensation may not show up at all until a plan pays out. The loan itself is the easy part. Proving the income is the work.
Across the wholesale programs Lendmire places consumer files with, the headline jumbo lane works with a 660 decision score, leverage up to 90% on purchase, and loans up to $5,000,000 on the largest lanes. Cash-out sits at lower leverage than purchase, and the largest lanes add a cash cap. Fixed lanes allow a 50% debt-to-income ceiling, while the adjustable lanes stop at 45% and the interest-only lanes at 43%. The jumbo cash-out refinance program page lays out how leverage, ratios, and reserves scale with the loan amount. All of it is subject to lender guidelines and file review.
How Is Jumbo Cash-Out Income Underwritten, Step by Step?
Underwriting follows a sequence: classify the income, establish history, collect documents, convert to a monthly figure, then test the cash-out rules and the appraisal. Each step can sink a file if the paper trail is thin, so it helps to see the order.
Step 1: Classify the income
Fannie Mae’s Selling Guide says restricted stock must have vested and been distributed to the borrower without restrictions. Unvested RSUs are not income. A sign-on bonus paid in restricted stock that vests over any length of time is not eligible either. Jumbo loans are not bought by the agencies, so each investor writes its own rules, but this guide is the common reference point and most start from it.
Deferred compensation is different. No agency guidance reviewed here treats non-qualified deferred comp payouts as income in a tidy formula. In practice, lenders look for documented receipt and a reasonable expectation the payments continue. How they weigh that depends on the investor.
Step 2: Establish history
Lenders want a track record. Fannie Mae recommends a two-year history for performance-based awards and lets shorter histories work with offsetting strengths. History requirements vary by lender and award type, so confirm yours before you plan around a date.
Step 3: Collect the documents
Using the agency baseline, expect the lender to ask for:
- A completed verification of employment showing restricted stock distributions, or your latest paystub showing receipt plus two years of W-2s.
- Evidence the stock is publicly traded.
- The current vesting schedule, showing past and future vesting.
- A brokerage or bank statement showing receipt of prior distributions.
- A verbal verification of employment.
- For income paid in shares, the 200-day moving average of the stock price.
Jumbo lenders often ask for more than this baseline, not less. Federal rules back up the paper requirement. The CFPB’s ability-to-repay compliance guide says a creditor generally cannot rely on what a consumer says about income and must verify it with reasonably reliable third-party records. It also says a creditor need not verify income it does not rely on. That is useful: you document the income that qualifies you, not every dollar you earn.
Step 4: Convert to monthly qualifying income
This is the lender’s math, and you do not control it. Share price and averaging method drive the result. The same vested shares can produce different monthly figures under different methods, which is why a falling stock can shrink your qualifying income even when your grant looks generous. Bonus income can be considered too, as long as it is verified.
Step 5: Apply the cash-out rules
Agency cash-out rules set the baseline that jumbo lenders often tighten. Fannie Mae’s cash-out refinance page says:
- The existing first mortgage must be at least 12 months old, measured note date to note date.
- At least one borrower must have been on title for six months before disbursement.
- For loans run through its automated underwriting system, a debt-to-income ratio above 45% calls for six months of reserves.
- A property that was listed for sale must come off the market on or before disbursement.
Treat the loan-age clock and the title clock as separate. Passing one does not satisfy the other.
Step 6: Appraisal and decision
The appraised value sets your maximum loan and how much cash is available. On the wholesale jumbo lanes Lendmire works with, reserves are measured in months of the full payment and rise with the loan amount. Above a lane’s threshold amount, two appraisals are required. Cash-out leverage is lower than purchase leverage, and a cash cap applies on the largest lanes.
What Does the Document Checklist Look Like by Income Type?
The documents differ by income type, so build your folder by category. This table shows what each piece proves and who issues it.
| Document | What it proves | Who issues it |
|---|---|---|
| Vesting schedule | Past and future vest dates | Plan administrator |
| Brokerage statement | Shares were delivered and held | Your broker |
| W-2s (two years) | Income was reported | Employer |
| Recent paystub | Current receipt of equity pay | Employer |
| Deferred-comp plan statement | Balance and payout terms | Plan administrator |
| Employer letter | Payout schedule continues | HR or payroll |
Pull them from the right people. HR handles employment verification and letters. The plan administrator or equity platform holds vesting schedules. Your broker holds the delivery records. Your CPA can reconcile any mismatch.
How Do Lenders Treat Each Type of Equity Pay?
| Pay type | Counts as income? | Main risk |
|---|---|---|
| Vested, distributed RSUs | Generally yes, after history test | Falling share price |
| Unvested RSUs | No | Treated as future promise |
| Deferred comp being paid out | Often, with continuance proof | Payout may end soon |
| Deferred comp still accruing | Generally no | Not yet received |
| RSUs deferred into a plan | Case by case | Documentation is heavy |
Notice the pattern. Receipt is what counts. A balance on a statement is not the same as a payment in your account.
Where Does the General Rule Break?
Several edge cases change the answer, and each is worth asking about before you apply.
Employment-related assets as income. Fannie Mae has a path that converts certain assets into a qualifying income stream, but that section excludes stock options and non-vested restricted stock. Third-party summaries also say it is limited to purchases and limited cash-out refinances. A cash-out borrower should assume it is unavailable unless a lender says otherwise.
Delayed financing. If you bought a home with cash and want to pull money out within six months, the agency exception requires a documented source of funds. It is narrow.
Limited cash-out is a different product. It carries its own rules, including no high-balance loans. It is not a substitute for a jumbo cash-out.
Double-counting. Shares counted as income generally should not also be counted as assets for reserves. If you plan to use unsold shares for reserves, say so up front and let the lender sort out which bucket they belong in.
Mismatched paper. A W-2 that shows a vest the brokerage statement dates differently, a mid-year job change, or a new grant that has not vested can all cause conditions. A short written explanation, with the plan administrator’s records attached, usually does more than a long phone call.
Occupancy. This article covers a primary residence. Second homes and investment properties carry different leverage on the same lanes, so occupancy decides the numbers.
Income chapter changes. Fannie Mae restructured its income chapter in a March announcement, so older articles may cite topic numbers that have moved.
How Does a Deferred-Comp Payout Differ From RSU Income?
An RSU is a stream you can trace through brokerage records. Deferred comp is often a payout schedule you have to prove through plan documents. Two things drive the lender’s view: how much is paid each year and how long it will keep coming.
Lenders usually care about the annual amount actually received, not the total balance. A large balance paid out over a few years looks very different from the same balance in a single lump sum. A lump sum is typically a one-time event, and lenders are wary of counting one-time events as ongoing income.
Confidentiality can be a snag. Some employers will not hand over the full plan agreement. An employer statement summarizing the terms and payout schedule can often fill that gap, depending on the lender. Ask the lender what form of letter it will accept before you ask HR to write one.
Picture a borrower with steady salary, three years of vested RSUs, and a deferred-comp plan that began paying out last year. The RSUs likely carry the file, because the history is long and traceable. The deferred-comp payout may count partly or not at all, depending on how many years of payments remain. If the file works without it, leaving it out is often simpler.
What Does the Borrower’s Decision Look Like in Practice?
The practical decision is whether to qualify on a narrow, well-documented slice of your pay or fight for every dollar of it. Fewer income sources usually means a cleaner file. More sources can lift your qualifying income but raise the paper burden. The flip point is your debt-to-income ratio. If salary alone clears the ceiling, stop there. If it does not, equity pay may be what closes the gap, and the extra paperwork earns its keep.
A few planning notes:
- Sequence your documents. Vest dates matter. A paystub right after a vest shows receipt more clearly than one from a quiet month.
- Expect lower qualifying income than your paycheck suggests. The figure is averaged and documented, not the grant’s headline value.
- Watch seasoning. The first loan has to age and the vesting history has to be in place. Gathering statements takes effort, so start early.
- Understand cost mechanics. The CFPB notes a jumbo mortgage may cost more than a conforming one, and first-lien jumbos can be classified as higher-priced mortgage loans at a defined threshold above the average prime offer rate. That is about classification, not a quote.
- Taxes. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit. The IRS is the starting point for vesting questions.
Key Terms Defined
RSU (restricted stock unit): A promise of company shares that you receive only after a vesting condition is met.
Vesting: The point at which you earn the shares and they become yours without restriction.
Deferred compensation: Pay earned now but scheduled to be paid later under a plan.
Continuance: Evidence that income will keep arriving, which lenders test before counting it.
200-day moving average: An averaged stock price lenders may use to value share-based income.
Cash-out refinance: A new, larger mortgage that pays off the old one and gives you the difference in cash.
Frequently Asked Questions
Do unvested RSUs help me qualify for a jumbo cash-out?
No. Only vested shares distributed to you without restrictions count as income under the agency baseline. Unvested grants are a future promise. Some lenders may look at them as a sign of job stability, but they do not add qualifying income.
Can I use deferred compensation as qualifying income?
Sometimes. The lender generally wants proof you are already receiving payments and that they will continue. The treatment depends on the investor and the plan. A balance that has not started paying out usually does not count.
Why is my qualifying income lower than my RSU grant suggests?
Lenders convert equity pay into an averaged monthly figure using a documented share price and a history period. A falling stock lowers that figure. The grant’s headline value is not what gets counted.
Does cash-out leverage differ from purchase leverage?
Yes. On the wholesale jumbo lanes, cash-out sits at lower leverage than purchase, and the largest lanes add a cash cap. Purchase leverage reaches 90% on the headline lane. Exact limits are subject to lender guidelines and full file review.
What if my employer won’t release my deferred-comp agreement?
Ask the lender whether an employer statement of terms and payout schedule is acceptable. Many lenders can work from that in place of the full agreement, though it depends on the program.
Next Steps
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Call 828-256-2183 to talk through which income you would rely on before you gather a single statement, or request a scenario review.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see jumbo loan programs.
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References
1. FHFA – 2026 Conforming Loan Limit Values
2. FHFA – Conforming Loan Limit data page
3. Fannie Mae Selling Guide B3-3.3-07: Restricted Stock Units
4. CFPB – ATR/QM Small Entity Compliance Guide
5. Fannie Mae Selling Guide B2-1.3-03: Cash-Out Refinance Transactions
6. Fannie Mae Announcement SEL-2026-02
7. CFPB – Higher-priced mortgage loan
8. IRS
This article is part of Lendmire’s Jumbo Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Jumbo Cash-Out Reserve Requirements for a W-2 Earner · How to Document RSU and Bonus Income for a Jumbo Cash-Out · Jumbo Cash-Out Credit and DTI Requirements With RSU Income
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.