To qualify for a home loan with Fannie Mae, you cannot currently have deferred student loan payments.
There are several techniques your lender can employ to determine what payment will be used for qualifying purposes if you are still enrolled in school and are not currently making payments on your student loans.
Fannie Mae recently updated its policies to permit borrowers to use the payment that appears on your credit report. That can be a payment made via IBR, PAYE, or REPAYE that does not completely pay off your loan at the end of the term.
When calculating the repayment amount for a loan that is deferred or in forbearance, your lender must choose one of the methods listed below:
There are numerous websites where you can find the most recent student loan interest rates. Click Here for an example.
The repayment period to be used when calculating a fully amortizing payment at the current market rate is specified in the following table.
IBR Income Based Repayment
Fannie Mae recently updated its policies to permit borrowers to use the payment that appears on your credit report. That can be a payment made via IBR, PAYE, or REPAYE that does not completely pay off your loan at the end of the term.
You DO NOT Have to Use 1% of the Balance
This is a common misunderstanding by inexperienced loan officers. You can typically prove your payments in one of the other ways mentioned above.
If you can’t find any other documentation outlining your payments once repayment begins, you only need to use a 1% calculation.
Not all loan officers are familiar with the rules, and not all lenders adhere to the same rules.
It’s possible that your loan officer lacks knowledge of the regulations or that the lender decided to develop their own regulations.
Don’t be deterred if a lender tells you something different than what you’ve read here. Not all loan officers or lenders are created equal. Don’t take no for an answer!.
How Do I Get My Questions Answered?
We developed this tool to assist you in sifting through the countless viewpoints and articles that may or may not directly address your question.
On this website, there are several ways to ask questions and receive professional advice.
In addition to looking into your concerns and offering you professional advice, I might be able to connect you with a lender friend who I know has experience with your particular circumstance and can assist.
FAQ
Does Fannie Mae count student loans?
If you have student loans, you may still be eligible for a Fannie Mae mortgage or refinance.
What does Fannie Mae require for student loan payments?
Your debt to income ratio is calculated in accordance with Fannie Mae 2022 regulations for student loan payments. Fannie Mae: The lender must calculate the borrower’s recurring monthly debt obligation to include a monthly payment using one of the methods listed below: 1% of the outstanding balance.
How are student loans calculated on a conventional loan?
In addition, the lender must figure each loan’s interest rate at 5% of the outstanding balance divided by 12 months (for illustration, take a $25,000 student loan balance multiplied by 5% to get $1,250; divide that by 12 months to get $104). 17 per month).
Does Fannie Mae allow income based repayment student loans?
Even if the income-based repayment (IBR) is for nothing, Fannie Mae will accept it. Additionally, Fannie Mae offers a program called HomeReady that only needs a 3% down payment. I would advise you to speak with the student loan servicer and submit an application for an IBR payment.