California broker uses pre-IPO stock to help buyers qualify for mortgages

A California mortgage brokerage is qualifying some pre-IPO employees for home loans by counting private-company shares as income, a workaround that could open doors for wealthy buyers stuck on traditional applications. The approach is gaining traction in California’s expensive housing market, where private equity can make borrowers look cash-poor on paper.

Why it matters: - Pre-IPO workers at companies like OpenAI, Anthropic and Stripe can hold seven- or eight-figure stakes and still fail standard mortgage underwriting. - In California, especially the Bay Area, that gap can block buyers from jumbo loans and delay home purchases even when they have substantial wealth. - The new lending approach gives some private-company employees a path to qualify before a company goes public or before they sell shares.

What happened: - A Good Lender, a California mortgage brokerage, has qualified clients for home loans using pre-IPO shares as income while the stock was still private. - The brokerage has used the approach on deals involving SpaceX stock before SpaceX went public and OpenAI stock while OpenAI remained private. - Rodney Roloff, founder of A Good Lender, said clients bought a home using stock as income rather than only base salary.

The details: - The program uses a portfolio-style underwriting method that treats private stock as an income stream through asset depletion. - The stock must have a reliable path to liquidity, such as periodic buybacks or tender offers. - The lender typically discounts the stock value by about 25% to account for taxes. - The remaining value is divided by a set period, commonly 84 months, to estimate added qualifying income. - In one example, $1.5 million in eligible pre-IPO stock adds roughly $13,400 a month in qualifying income on top of salary. - The final loan calculation depends on the lender, the borrower’s full financial profile and prevailing market rates. - Buyers can pair the strategy with a bridge loan to close on a home now and handle the equity side later.

Between the lines: - The trend reflects how long companies are staying private, often for a decade or more, which leaves more wealthy employees outside conventional mortgage rules. - Mainstream banks usually want stock to be publicly traded before counting it toward a loan, so private equity can look invisible in underwriting. - Portfolio lenders have more flexibility than large banks, but guidelines vary widely, so brokers often place these files across multiple institutions. - Roloff said Silicon Valley has created many paper millionaires whose stock could not help them qualify until now.

What's next: - More borrowers with private-company equity may seek this route as portfolio programs spread. - Lenders are likely to keep adjusting how they evaluate pre-IPO stock as the private market evolves. - California founders, early employees, executives and investors may see more options if they can document a predictable path to liquidity.

The bottom line: - Pre-IPO stock is starting to function like qualifying income for some mortgage borrowers, but only when a lender is willing to underwrite the asset case by case.