{"id":3353,"date":"2016-04-02T12:41:02","date_gmt":"2016-04-02T12:41:02","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=3353"},"modified":"2020-07-13T22:33:29","modified_gmt":"2020-07-13T22:33:29","slug":"student-loan-payments-and-usda-no-money-down-loans","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/student-loan-payments-and-usda-no-money-down-loans\/","title":{"rendered":"Student Loan Payments and USDA No Money Down Loans"},"content":{"rendered":"

Student Loan Payments and their Impact in the Total Debt Ratio<\/h2>\n

\"Student<\/h2>\n

Student loan payments are such a burden to many Americans but they can also be very confusing when it comes to getting a mortgage.\u00a0 Payments can be deferred until a later date, Income Based Repayment (IBR), fixed payments, graduated payments, adjustable payments, and others.\u00a0 One thing buyers with student loans<\/a> usually find out is that even though their minimum payments may be very low or even $0, that is not always the way mortgage guidelines look at it.\u00a0 USDA<\/strong><\/span><\/a>, like other mortgage programs, has its own way of looking at student loan payments.<\/p>\n

Recent USDA Clarification of Student Loan Payment Guidelines<\/h2>\n

This week we received a new announcement from USDA<\/strong><\/span><\/a> which states the following.\u00a0 “Recent updates to the 3555 Handbook intended to simplify guidance for the delivery of the guaranteed loan program have caused some misperception in regards to total debt ratio calculations, specifically in the subject of student loans.\u00a0 The Agency is working on revisions to Chapter 11: Ratio Analysis; however, we want to further clarify the subject at this time.<\/p>\n

Total debt includes monthly housing expenses plus any other credit obligations incurred by the applicant.\u00a0 Student loan payments must be included in the calculation of the total debt-to-income ratio and captured under liabilities on the application.”\u00a0 Student loan payments should be treated as described below:<\/p>\n

[av_button_big label=’The Ultimate FAFSA Guide (2018)’ description_pos=’below’ link=’manually,https:\/\/www.creditloan.com\/student-loans\/fafsa-guide\/’ link_target=’_blank’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ custom_font=’#ffffff’ color=’theme-color’ custom_bg=’#444444′ color_hover=’theme-color-subtle’ custom_bg_hover=’#444444′]
\nEverything you need to know about the Free Application for Federal Student Aid (FAFSA)
\n[\/av_button_big]<\/p>\n

If You Have Fixed payment student loans<\/strong>:<\/h3>\n

A fixed payment may be used in the debt ratio when the lender retains documentation to verify the payment is fixed, the interest rate is fixed, and the repayment term is fixed.\u00a0 There must be no future adjustments to the terms of the student loan payments.<\/p>\n

What if You Have Non-Fixed IBR payment student loans<\/strong>:<\/h3>\n

Payments for deferred loans, Income Based Repayment (IBR), Graduated, Adjustable, and other types of repayment agreements which are not fixed cannot be used in the total debt ratio calculation on USDA<\/strong><\/span><\/a> loans.\u00a0 Non-fixed student loan payments require a calculation\u00a0adjustment by lenders.\u00a0 Thus, lenders must figure 1% of the loan balance and no additional documentation is required.<\/p>\n

USDA Rural Development Home Loans offer buyers a great way to purchase a home with no down payment.\u00a0 Additionally they offer\u00a0a 30 year fixed rate payment plus relaxed credit guidelines.\u00a0 Even though USDA offers so much, many still thing of this program that is only for low income borrowers and small properties in the country.\u00a0 This couldn’t not be further from the truth.\u00a0\u00a0Households can actually make up to $121,250 or even more in some counties like Wake and Johnston.\u00a0 So contact our USDA home loan experts to see if USDA is the best option for your home purchase.<\/p>\n

Additional Student Loan Resources:<\/strong><\/h3>\n