Local mortgage companies are turning to new mortgage solutions for Amazon employees, as Seattle Times reports that some mortgage loan originators will now consider potential earnings from restricted stock units as income to qualify for a loan. This is a vast change from historic practices, as lenders have generally avoided market-dependent unit values when determining qualification amounts.
According to the Times, all Amazon employees are capped at a salary of $160,000 (regardless of level or responsibility) and further compensation generally arrives in restricted stock units that vest over a four-year period. These new lending programs are particularly beneficial to new Amazon hires who have been compensated in stock option but have not yet received the returns.
Though many other tech companies in the region (like Microsoft, Google and Facebook) utilize restricted stock units as payment, the base salary at Amazon makes it a primary focus of these lending programs. The Times writes that “upcoming payouts from Amazon’s restricted stock units could cause a major influx of cash into the Seattle housing market. Companywide, Amazon has 16.2 million restricted stock units outstanding as of June 30, with a value of close to $1.3 billion, according to SEC filings.”