The Quick Read: The order of your two closings changes the math on both loans, so sequence is a real decision, not a formality. Each loan gets its own approval, its own appraisal and its own debt-to-income test. Only RSUs that have vested and been delivered to you count as income, and they count as an averaged figure, not your latest vest. Whether cash-out goes first, the purchase goes first, or the cash-out funds the down payment depends on your income history, your equity and how each lender treats the timing.
What Does “Sequencing” Actually Mean Here?
Sequencing means deciding which loan closes first and what each file will look like to the next underwriter. You are working with two moving parts: a cash-out refinance on the home you live in, and a purchase loan on a second home. Each one adds or changes a monthly obligation. Each one has to be qualified with the other’s payment in the ratio.
Here is the catch. A larger cash-out loan raises your primary payment, which leaves less room for the second-home loan. Buying first puts the second-home payment on the cash-out file instead. Neither order is automatically better. It turns on your income, your equity and your appetite for risk.
If either loan crosses your county’s conforming limit, it becomes a jumbo. The FHFA conforming loan limit addendum explains that the limit is set by county and adjusts higher in expensive areas. So check your own county. A cash-out on the current home and a second-home purchase can land on opposite sides of that line, which changes which lender lanes you can use.
Jumbo loans are not bought by Fannie Mae or Freddie Mac, so there is no single national jumbo rulebook. Across the wholesale lanes Lendmire places files with, the rules on RSU income, reserves and second homes differ from lender to lender. Agency guidelines are the reference point most of them borrow from. That is why this article uses agency rules as a baseline and says so each time.
Do RSUs Count as Income for a Jumbo Loan?
Yes, but only vested, delivered shares, and only on a track record. Unvested grants are not income at qualification. Lenders look for stock that has vested and been released to you without restrictions, from a publicly traded company.
The agency baseline is spelled out in the Fannie Mae Selling Guide section on restricted stock units. Its documentation list typically includes:
- A verification of employment showing stock distributions, or your latest paystub plus two years of W-2s.
- Evidence the stock is publicly traded.
- Your vesting schedule, past and future.
- A brokerage or bank statement showing prior distributions.
- When pay arrives as shares, the 200-day moving average share price.
The method matters because it surprises people. When income is paid in shares, mortgage-insurer training material describes valuing it using that 200-day average price times the vested pre-tax shares, then spreading it over a set number of months (Radian’s RSU job aid). That is a mortgage-insurer summary of the agency method, so treat it as a guide, not a jumbo rule.
So a big recent vest does not map one-to-one into qualifying income. A strong vest followed by a quiet one gets blended. And a share price that drifts down can pull the average down with it.
How much history is enough?
For performance-based awards, insurer training material recommends about two years of history with the current employer. Shorter history may work with offsetting factors, such as future vesting at least matching past vesting. Lenders also want to see that the income will likely continue. Some jumbo lenders are stricter than the agencies and some are more flexible. That is a lender-by-lender matter.
Three Ways to Order the Two Loans
The three common sequences each shift where the pressure lands.
| Sequence | How it works | Pressure point |
|---|---|---|
| Cash-out first | Refinance primary, then buy the second home | Bigger primary payment sits in the purchase ratio |
| Purchase first | Buy the second home, then refinance primary | Second-home payment sits in the cash-out ratio |
| Proceeds as down payment | Cash-out funds feed the purchase | Timing of funds and seasoning of the cash |
Cash-out first
This path locks in your equity before you commit to the second home. The cost is that your new, larger primary payment goes into the second-home qualification. If your RSU income is already stretched in the ratio, the purchase loan may fall short. Cash-out first also lets you see the actual proceeds before you shop for the second home.
Purchase first
If you have cash or other assets for the down payment, buying first keeps the cash-out amount flexible. The risk reverses. The second-home payment now weighs on the refinance file, and your cash-out leverage on the primary home is limited by what the lender allows.
Proceeds as the down payment
This is the most common plan for equity-rich, cash-light borrowers. Documented cash-out proceeds that sit in your account are treated as assets. How soon a lender wants them seasoned varies, so ask the loan officer about timing before you set a contract date. Lendmire’s piece Can You Use A Cash Out Refinance To Pay A Downpayment On A Second Home walks through that version in more detail.
One timing fact belongs in every plan. A refinance of your principal home carries a three-business-day right to cancel under Regulation Z’s rescission rule. Funds generally disburse after that period ends. So never build a second-home closing date that depends on those funds arriving early.
How the Jumbo Cash-Out Itself Is Underwritten
Start with equity and leverage. Our jumbo lanes allow cash-out at lower leverage than a purchase. Several lanes reach 89.99% combined loan-to-value on the headline set, while the rest stop at 80%, and cash-out sits below those purchase limits. The largest lanes carry a cash cap. A 660 decision score is the floor on the headline lane, and loans reach $5,000,000 on the largest lanes. The ratio ceiling is 50% on the fixed lanes, 45% on adjustable and 43% on interest-only. All of this is subject to lender guidelines and full file review, and none of it is a commitment to lend.
Reserves are measured in months of the full payment and rise with the loan amount. On the biggest loans, expect two appraisals above a lane’s threshold amount. After cash-out, reserves are a real question: some lenders count freshly received proceeds and some do not.
The agency reference points are lower than jumbo purchase limits. The Fannie Mae eligibility matrix caps cash-out at 80% on a one-unit primary home and 75% on a one-unit second home. Those are conforming caps only, not jumbo figures. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
If you are weighing this path, the jumbo cash-out refinance program page lays out the lanes side by side.
The Second-Home Rules That Trip People Up
Occupancy decides leverage, so it must be represented accurately. Under the agency baseline, a second home is a single unit you occupy for part of the year. It is suitable for year-round use and under your exclusive control. It is not a timeshare or part of a rental pool (Fannie Mae occupancy types).
Two consequences follow:
- Projected rental income from the second home cannot be used to qualify under the agency baseline.
- If your real plan is to rent it out, a different occupancy classification applies, with different leverage.
Lower-risk occupancy is priced better, which can tempt borrowers to misstate use. Don’t. Misrepresenting occupancy is a file-breaker.
On the jumbo side, our lanes treat primary, second-home and investment occupancy at lane-specific leverage. Second-home leverage usually sits below primary. A few lanes accept non-warrantable condominiums, which matters in resort markets.
A Worked Walk-Through
Picture a borrower with a solid base salary and several years of vesting history at a public company. She owns her primary home with substantial equity. She wants a second home at a price near her primary home’s value.
Step one: Her loan officer averages her RSU distributions over the history window and adds that to base pay. Her ratio comes out comfortably under the lane’s ceiling.
Step two: Cash-out first. Her primary payment rises. Re-run the ratio with that higher payment plus the proposed second-home payment. If it lands near the ceiling, she has three levers: a smaller cash-out, a larger down payment on the second home, or a lane with a higher ratio ceiling.
Step three: Reserves. After both closings, can she show the required months of payments on both properties? If proceeds do not count toward reserves with her lender, she needs other liquid assets.
Now flip her profile: low base pay and a large pile of vested shares. Income-based qualification may fall short. Some lenders will consider assets instead. Others will not. Ask early, because the answer decides which lender you talk to.
Where the General Rule Breaks
- Recent IPO or new employer. Pre-IPO history generally does not count, and the 200-day average may not exist yet. You may have to qualify on base pay or wait.
- Sign-on RSUs. Sign-on RSU bonuses that vest over a period are generally not eligible as qualifying income under the mortgage-insurer summaries.
- Private company stock. Evidence that the stock is publicly traded is a standard documentation item, so private-company RSUs usually do not meet it.
- Performance-based awards. Standards for history differ from time-based vesting, and the award agreement is typically required.
- Rescission. It applies to the primary-home refinance only, not to the second-home purchase. The CFPB has been reviewing the rule, so do not assume it has changed.
- Falling share price. The 200-day average can drop between application and closing.
What Should You Stress-Test Before You Commit?
Ask what happens if the stock falls or grants stop after closing. Which payment can you carry on base pay alone? A cash-out loan increases the debt on the home you live in. If the larger payment relies on equity pay, your primary residence is the asset at risk. A jumbo cash-out that works only at the peak of your vest history is a thin file.
Also compare alternatives. Selling vested shares avoids new debt but may carry a tax cost. Buying the second home from savings avoids a second ratio test. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
RSU (restricted stock unit): A grant of company stock that becomes yours as it vests over time.
Vested and distributed: Shares released to you with no remaining restrictions, the only RSU form that counts as income.
200-day moving average: The average share price over the last 200 days, used to value share-paid income.
Debt-to-income ratio: Your monthly debts divided by your monthly income, tested against a lane’s ceiling.
Rescission: A three-business-day right to cancel certain refinances of your primary home.
Seasoning: How long funds must sit in your account before a lender treats them as your own assets.
Frequently Asked Questions
Should I close the cash-out or the second home first?
It depends on which file has more room. Cash-out first loads a bigger primary payment into the purchase ratio. Purchase first loads the second-home payment into the refinance ratio. Run both orders with your loan officer before choosing.
Can I use unvested RSUs to qualify?
No. Only vested shares delivered to you without restriction count. Unvested grants may help a lender judge continuance, but they are not income at qualification.
Can I use cash-out proceeds as my second-home down payment?
Often yes, once the funds are documented in your account. Seasoning rules vary, and funds generally arrive only after the rescission period ends. Never schedule the purchase closing around an early disbursement.
Will expected rental income from the second home help me qualify?
Under the agency baseline, no. A second home must be kept for personal use, and rental income cannot be used to qualify. Planning to rent it out changes the occupancy classification and the leverage.
Does one lender have to handle both loans?
Not necessarily. Each loan is its own approval with its own appraisal, and RSU documentation may need to be resubmitted. Using one lender can streamline paperwork, but lane terms still decide which fits each loan.
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. A Lendmire loan officer can also run both sequences against your RSU history before you sign a purchase contract.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. 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 conforming loan limit addendum
2. Fannie Mae Selling Guide: Restricted Stock Units
4. CFPB Regulation Z, 12 CFR 1026.23
5. Fannie Mae Eligibility Matrix
6. Fannie Mae Selling Guide: Occupancy Types
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: How to Sequence a Jumbo Cash-Out and a Second-Home Purchase · How to Document RSU and Bonus Income for a Jumbo Cash-Out · How to Compare Jumbo Cash-Out Cost Against a Second Lien
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.