TIP OF THE DAY- FREDDIE RESTRICTED STOCK AS INCOME

TIP OF THE DAY- FREDDIE RESTRICTED STOCK (RS) AND RETRICTED STOCK UNITS (RSU) AS INCOME

 

RS and RSU subject to performance-based vesting provisions

History of receipt:

·         Two years, consecutive

·         To be considered for history of receipt, RS and RSU used for qualifying must have vested and been distributed to the Borrower from their current employer, without restriction

Continuance: Must be likely to continue for at least the next three years

Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements

All of the following:

·         YTD paystub(s) documenting all YTD earnings, including payout(s) of RS or RSU, W-2 forms for the most recent two calendar years and a 10-day PCV. Income verification obtained through a third-party verification service provider as described in Section 5302.3 is not permitted.

Or all of the following:

·         Written VOE documenting all YTD earnings (including payout(s) of RS or RSU) as well as earnings for the most recent two calendar years, and a 10-day PCV. Income verification obtained through a third-party verification service provider as described in Section 5302.3 is not permitted.

Additional documentation requirements applicable to all documentation levels:

The Mortgage file must contain:

·         Evidence the stock is publicly traded

·         RS and/or RSU agreement

·         Most recent vesting schedule(s) detailing past and future vesting

·         Evidence of receipt of previous year(s) payout(s) of RS/RSU (e.g., year-end paystub, employer-provided statement paired with a brokerage or bank statement showing transfer of shares or funds) that must, at a minimum, include:

o    Date(s) of the payout(s)

o    The number of vested shares or its cash equivalent distributed to the Borrower (pre-tax)

RS & RSU subject to time-based vesting provisions

History of receipt:

·         One year

·         To be considered for history of receipt, RS and RSU used for qualifying must have vested and been distributed to the Borrower from their current employer, without restriction

Continuance: Must continue for at least the next 3 years

Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements

All of the following:

·         YTD paystub(s) documenting all YTD earnings, including payout(s) of RS or RSU, W-2 form for the most recent calendar year, and a 10-day PCV. Income verification obtained through a third-party verification service provider as described in Section 5302.3 is not permitted.

Or all of the following:

·         Written VOE documenting all YTD earnings (including payout(s) of RS or RSU) as well as earnings for the most recent calendar year, and a 10-day PCV. Income verification obtained through a third-party verification service provider as described in Section 5302.3 is not permitted.

Additional documentation requirements applicable to all documentation levels:

The Mortgage file must contain:

·         Evidence the stock is publicly traded

·         RS and/or RSU agreement

·         Most recent vesting schedule(s) detailing past and future vesting

·         Evidence of receipt of previous year's payout(s) of RS/RSU (e.g., year-end paystub, employer-provided statement paired with a brokerage or bank statement showing transfer of shares or funds) that must, at a minimum, include:

o    Date(s) of the payout(s)

o    The number of vested shares or its cash equivalent distributed to the Borrower (pre-tax)

 

justin brown