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Student Loans With IBR Payments
Good morning, folks. Does anyone know about HUD, FANNIE MAE, and Freddie Mac suspending income-based repayment on FHA and Conventional loans? I heard you can no longer use IBR payments because IBR is getting sued. From my understanding, our borrowers can only use 0.50% of the outstanding student loan payment for debt-to-income ratio calculations. Appreciate any feedback. Seems most wholesale account executives and underwriters do not know about this either. Thank you in advance.
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2 Replies
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An important update from the Department of Educaton is below. Unfortunately, repayment options are paused in many instances while they work through the SAVE Program.
ed.gov
Department of Education Updates on Saving on a Valuable Education (SAVE Plan)
A Federal Court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans. The U.S. Department of Education is assessing the ruling.
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Thank you, Michelle for the quick reply. So, bottom line is until further notice, we can only use 0.50% of the outstanding student loan balance as a hypothetical debt on debt-to-income ratio calculations, correct?