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Discovery QuizRelocating executives carry the most logistically complex mortgage file in corporate America: a job transition with new state residency, a relocation package now permanently taxable as W-2 wages under the July 2025 One Big Beautiful Bill Act (which made the TCJA suspension permanent for civilian employees), often a sign-on bonus and sometimes a "makewhole" payment for forfeited unvested equity at the prior employer, a prior residence that may or may not have sold by closing, multi-state tax allocation under IRC Section 861 source-of-income rules for the year of move, and a new home purchase that frequently overlaps with temporary housing in the destination market. Generalist lenders see the relocation reimbursement inflating the W-2 and either double-count it as continuing income or underqualify the executive on the lower base. We read the relocation letter, the gross-up structure, the prior-home sale status, and the two-home transition cash-flow picture, and structure the file accordingly.
Stairway Mortgage qualifies relocating executives using the methods that fit the real move — without double-counting the relocation reimbursement or underweighting the new comp package. A lateral C-suite hire with a six-figure relocation gross-up and a prior home still on the market, an internal transfer with full relocation but unchanged base comp, a returning expat coming off a FEIE-qualifying assignment in Europe, a multi-relocation track executive on their third move in five years, and a dual-career household with one spouse trailing the relocation each get qualified using the methods that fit their actual transition. We pick the right door before we quote. Or skip ahead: browse every loan program, run numbers on 100+ mortgage calculators, or check today's rates. For the parent hub and other executive paths, see our corporate executives mortgage hub.
Under IRS Publication 521 and the One Big Beautiful Bill Act (OBBBA, July 2025), civilian relocation reimbursements are permanently taxable W-2 wages. The pre-2018 tax-free treatment is gone except for active military and intelligence community.
Under IRC Section 861 source-of-income rules, the year of relocation triggers part-year resident filings in both the prior and new states. Coordinate with tax advisor before mortgage to avoid underwriting confusion.
Many relocating executives close on a new home before the prior residence sells. Bridge loans, contingent purchase contracts, and dual-mortgage qualification under Fannie Mae DTI rules are the three primary paths.
Lateral executive hires typically receive a sign-on bonus in the $50K–$500K range, plus relocation package, plus sometimes "makewhole" cash for forfeited unvested equity. Each is one-time and doesn’t qualify as continuing income but supports reserves.
Each relocation type has its own qualifying logic. A lateral C-suite hire has different mortgage mechanics than an internal transfer or a returning expat.
"Recruited for a senior role. Sign-on bonus + relocation + makewhole for unvested equity left behind."
"Same company, new market. Relocation package but unchanged base + equity comp."
"Returning from a foreign assignment. FEIE phasing out. W-2 transitioning back to standard US tax treatment."
"Third move in five years. Multiple prior employers’ W-2s. Rapid career trajectory."
"My spouse relocated for their role. I’m searching new role or working remote in same role."
Four methods cover almost every relocation file we’ve closed. The right method depends on whether your relocation is lateral or internal, your prior-home sale status, and whether you need bridge financing.
For lateral hires starting a new role. Fannie Mae and Freddie Mac both accept offer-letter income for new employment under Fannie Mae Selling Guide B3-3.1-01, typically with first paystubs to confirm. The relocation letter from the new employer is documented as part of the file, but the relocation reimbursement amount is not added to qualifying income because it’s one-time. Conventional jumbo dominates this path.
For internal transfers within the same company. Comp documentation is standard W-2 with the same employer; the relocation letter explains the move and the temporary housing arrangement if applicable. The relocation reimbursement appears on the W-2 but is documented as one-time so it’s not double-counted as continuing income. The file qualifies the same way the executive would have qualified pre-relocation.
For executives returning from foreign assignments who used the Foreign Earned Income Exclusion under IRC Section 911. The tax return shows reduced taxable income because of the FEIE, but qualifying income should use the full gross compensation, not net of exclusion. Coordinate with the tax advisor to document the pre-FEIE gross. Strong underwriting tip: many lenders mis-handle this and underqualify the returning expat by hundreds of thousands.
For relocating executives whose W-2 transition has gaps or whose new role doesn’t fit standard offer-letter timing. Under CFPB Reg Z’s Ability-to-Repay rule, bank-statement Non-QM qualifies based on 12–24 months of personal deposits at 50–75% counting. Useful for trailing spouses with employment gaps, returning expats with non-standard W-2, or executives in 90-day transition windows between major roles.
Seven loan-program categories cover essentially every relocating executive file we’ve closed. The mix is heavily weighted toward conventional jumbo with bridge/contingent considerations for two-home transitions.
Relocation mortgages combine a job transition, geographic move, tax-residency change, and often a simultaneous home sale and purchase. Each layer adds complexity that a generalist lender trained on stable single-employer single-state files isn’t equipped to handle.
The 2017 Tax Cuts and Jobs Act suspended the moving expense deduction and the employer-funded tax-free reimbursement for civilian employees, originally through 2025. The One Big Beautiful Bill Act passed in July 2025 made that suspension permanent. Every dollar an employer spends on civilian relocation reimbursement now permanently appears on W-2 boxes 1, 3, and 5 as taxable wages subject to 22% federal supplemental withholding and 7.65% FICA. Pre-2018 tax-free relocation is gone except for military and intelligence.
Under IRC Section 861 source-of-income rules, the year of relocation triggers part-year resident filings in both the prior and new states. Income is allocated to each state based on the number of days worked in each location. Some states (CA, NY, NJ, NC) are aggressive about claiming wages earned during the prior-state portion of the year, even after physical move. We document the federal W-2 separately from the state-allocation work paper because underwriting cares about federal wages, not state allocation.
Many relocating executives close on a new home before the prior residence sells. Three structural paths exist: (1) Bridge loan against prior-home equity, (2) Contingent purchase contract requiring prior sale before closing, (3) Dual-mortgage qualification with both mortgages in the DTI calculation under Fannie Mae B3-6-02. The right choice depends on the prior home’s market timing, the executive’s reserves, and the new market’s competitiveness.
While federal moving-expense deductions are permanently suspended, seven states still offer state-level deductions following pre-TCJA rules: California, New York, New Jersey, Massachusetts, Pennsylvania, Arkansas, and Hawaii. Relocating executives moving to or from these states should coordinate with tax advisors to claim the state-level deduction where applicable. The state deduction doesn’t change federal mortgage qualifying but affects total tax cash flow during the transition year.
Active-duty military service members moving under a Permanent Change of Station order retain the pre-TCJA tax-free reimbursement treatment under IRC Section 132(g). The reimbursement is excluded from W-2 wages. Combined with the VA loan’s 0% down and no PMI, military relocations are structurally the cleanest relocation files. We process VA-eligible military relocations differently because the W-2 wage profile is fundamentally different from civilian counterparts.
Many large employers (especially Fortune 500) work with corporate relocation companies (Cartus, Sirva, BGRS, Aires) that have preferred-lender networks. The preferred lender often offers an "expedited" relocation mortgage but at premium rates and with limited program flexibility. Going outside the preferred network is permitted and often yields better economics — better rates, broader program access, and a specialist who reads the relocation file structure. We routinely close relocating-executive files that started with the preferred lender and ended with Stairway.
A timeline view of how the right mortgage program changes as you progress from acceptance of the new role through the move, two-home overlap window, and post-relocation stable state.
Comp profile: Current employer W-2 through end-date + new employer offer letter + relocation package terms. Dominant qualifying method: Offer-letter income with first paystub when available, plus relocation letter documenting the structure. Common timing: 30–90 days before move date. Watch-out: Don’t resign current role until mortgage approved with offer letter; some lenders require continuous current employment until rate-lock.
Comp profile: Last paystub from prior employer + first paystubs from new employer; relocation reimbursements and gross-up appear in new W-2. Dominant qualifying method: If new home already under contract, close per plan; if still house-hunting, document temp housing arrangement. Common timing: 30–180 days of temp housing typical. Watch-out: Multi-state W-2 sourcing begins; coordinate with tax advisor before year-end filing.
Comp profile: New employer comp + prior-home mortgage still in DTI. Dominant qualifying method: Bridge loan against prior-home equity, contingent purchase contract, or dual-mortgage qualification with both mortgages in DTI. Common timing: 60–180 days if prior home doesn’t sell quickly. Watch-out: Prior-home mortgage may need to be rented to a tenant if vacancy extends; rental income then qualifies under Fannie Mae B3-3.1-08.
Comp profile: Full year of W-2 at new employer; relocation reimbursements no longer inflating box 1. Dominant qualifying method: Standard conventional jumbo or conforming on continuing income. Common timing: 12–18 months post-move. Watch-out: If considering a refinance, the post-move W-2 may now show LOWER box 1 than the move-year W-2 (because relocation reimbursements gone); document the comp continuity to avoid underwriter confusion.
Names abbreviated for client privacy. Company names anonymized. Numbers are real.
"Recruited as CFO at a Fort Lauderdale firm. Chicago house still on market. $200K sign-on, $85K relocation package with gross-up, $300K makewhole for forfeited equity. The first lender was confused by the W-2 numbers and double-counted the relocation. Jim’s team documented everything as one-time, qualified on the offer letter and first paystubs. $1.8M close on a Las Olas waterfront, bridge against the Chicago house. Chicago sold 47 days later."
"Returning to the US after four years in Singapore. My W-2s reflected the Foreign Earned Income Exclusion, so the taxable income looked low. The first lender used the FEIE-reduced number and offered $620K. Jim’s team used the full pre-FEIE gross compensation and the offer letter from the new US role. Approved at $1.3M for a Coconut Grove townhome."
"My husband relocated for an SVP role, I’m a remote-work senior director with my prior employer (continuing comp). The big bank wanted to see both spouses with new-market employment letters. Jim’s team documented my remote-work continuity and used both W-2s. Approved at $1.45M for a Plantation home. Closed 32 days from offer accept."
More relocating executive mortgage resources at Stairway
Lateral CFO hire moving from Chicago to Fort Lauderdale, four-year tenure at prior public company being left for a private-equity-backed firm in South Florida. Offer letter: $450K base, $200K sign-on bonus, $300K makewhole cash for forfeited unvested RSUs at the prior employer, $85K relocation package with full tax gross-up, and an annual bonus structure with first payment 12 months out. Chicago primary residence on market for $1.3M but not yet under contract. The first lender pulled the offer letter, saw the $450K base, added the $200K + $300K + $85K + gross-up to the qualifying picture (all one-time amounts), came up with $850K of "qualifying income," then got confused when the Chicago mortgage entered the DTI calculation and offered $1.2M maximum at jumbo rates with no bridge. We pulled the offer letter, the relocation letter, the makewhole structure documentation, the Chicago listing agreement, and structured the file properly: qualifying income on $450K base + projected annual bonus (year-2 documented under Fannie Mae B3-3.1-01), sign-on/makewhole/relocation/gross-up documented as one-time (supporting reserves and down payment, not qualifying income), bridge loan against Chicago equity for $400K to fund the new purchase before prior sale. Approved at $1.8M conventional jumbo + $400K bridge for a Las Olas waterfront home with dockage. Closed in 38 days. Chicago sold 47 days later for $1.34M; bridge paid off in full from sale proceeds. The structure was readable the entire time — the first lender just couldn’t separate the one-time relocation components from continuing comp.
No application. No credit pull. A 20-minute conversation where we look at your relocation package, your sign-on bonus and makewhole structure, your prior-home sale status, your new market target, and your continuing comp picture — then we tell you which loan program fits and roughly what the numbers look like. If we’re not the right shop, we’ll tell you that too.
Stairway Mortgage is a division of NEXA Mortgage LLC. Jim Blackburn NMLS #1072866.
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