{"id":909,"date":"2015-05-20T13:34:48","date_gmt":"2015-05-20T13:34:48","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=909"},"modified":"2020-07-13T22:35:05","modified_gmt":"2020-07-13T22:35:05","slug":"fha-student-loan-guidelines","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/fha-student-loan-guidelines\/","title":{"rendered":"FHA Student Loan Guidelines Affect on Home Buyers With Deferred Payments"},"content":{"rendered":"

A popular topic on the news and in people’s pocketbook\u00a0is the effect of rising college education expenses on families.\u00a0 Millennials and often their parents are mounting huge student loan balances.\u00a0 There is a lot of talks by individual states of making college tuition free for many.\u00a0 Actually New York just announced free tuition for income levels under $100,000.\u00a0 We have a long way to go to change the high cost of a college education and solving current debt levels.\u00a0 Therefore this article discusses current student loan debt’s affect on buying a home.\u00a0 So student loan debt, even with no payments required, may affect the ability to buy a home.\u00a0 When it comes to qualification, each mortgage loan type treats deferred or income based repayment (IBR) student loans a little differently.\u00a0 FHA student loan guidelines changed dramatically on 9\/14\/15.\u00a0 Therefore lets mainly discuss FHA student loan guidelines 2017.<\/p>\n

FHA Deferred Student Loan Payment Guideline Change 9\/14\/2015<\/h2>\n

Prior to September 14, 2015, FHA was the “go to” loan for buyers with deferred student loan debt.\u00a0 If student loan payments that<\/p>\n

\"FHA
New FHA student loan guidelines 2017<\/figcaption><\/figure>\n

are deferred greater than 1 year after closing could be excluded.\u00a0 Basically lenders would count no monthly payment in the debt ratio calculation.\u00a0 Obviously, this made FHA qualification much easier when there\u00a0are deferred payment\u00a0student loans.\u00a0 But the rules changed on 9\/14\/2015.\u00a0 Ultimately deferred student loan payments of $0 now must include a payment when qualifying a borrower.\u00a0 This is just another reason to get prequalified to buy a house up-front before making an offer on a house.\u00a0 Once preapproved, then it is off to look at homes<\/a> for sale!<\/p>\n

FHA Student Loan Guidelines 2017<\/h2>\n

Deferred student loan payments mean that for a period of time, borrowers are not required to make payments.\u00a0 Although, borrowers may make payments during this period.\u00a0 Another popular option for student loan borrowers is called Income Based Repayment or IBR.\u00a0 Student loan companies like Navient<\/a> determine a minimum required payment based on the income and debts of the borrower.\u00a0 There are even ways that a $0 IBR payment is approved.<\/p>\n

Income Based Repayment & Deferred Payment Student Loans Guidelines<\/h3>\n

The HUD \/ FHA Handbook 4000.1 <\/a>has the following requirements for student loans in these categories.\u00a0 Specifically, lenders must include all student loans in the borrower’s liabilities, regardless of payment status.\u00a0 Usually the amount used in calculating an FHA debt ratio is 1% of the outstanding balances.\u00a0 But if the payment is under 1% and can be proven to be a fully amortized payment, that may be used.\u00a0 Here are the actual current FHA student loan guidelines 2017:<\/p>\n

\"buying
Buying a home with student loans<\/figcaption><\/figure>\n

If the payment used for the monthly obligation is:<\/strong><\/p>\n