-
FHA LOANS WITH STUDENT LOANS
Can I buy a house via FHA loan with high student loans?
-
1 Reply
-
FHA loans are a popular option for borrowers with student loans because they have flexible credit requirements and income limits. However, you must know how student loans affect your eligibility and debt-to-income ratio (DTI) when applying for an FHA loan.
Key Considerations for FHA Loans with Student Loans:
Impact on DTI: Considerations about Student Loans under HUD Guidelines:
Calculating DTI with Student Loans:
The Federal Housing Administration uses the percentage of a person’s monthly income to pay debts as a DTI ratio. This includes even those in deferment or forbearance.
If the Loan Is in Repayment
If your student loan is in repayment, the actual amount paid per month will be used to calculate the debt-to-income ratio, provided it is fully amortized. On Income-driven Repayment (IDR), lenders use what is on your credit report as your monthly payment.
If the Loan Is in Deferment or Forbearance:
For this category of people, lenders should take 0.50% percent of the outstanding balance to calculate monthly payments towards DTI. Unless more than 0.50% can be proved using relevant documents showing actual payments, which is less than 0.50%.
Income-Driven Repayment Plans
Lenders may consider 0.50% of the loan balance when calculating DTIs unless a fully amortized payment plan shows otherwise. This is even if your IDR has low payments or $0 monthly.