NOTE: please see updated 2021 rules on student loans here.
New FHA student loan changes coming: FHA announced some positive changes coming to the way student loan debt is calculated by lender and banks. The old FHA loan policy for student loan debt required mortgage companies to calculate a monthly payment for deferred Student Loans using 2 percent of the outstanding balance, and include the payment in the Borrowers Debt-to-Income ratio for qualification purposes. New rules going into effect June 30, 2016 will reduce this to only 1% of the outstanding student loan balance! This guidance is effective for all case numbers assigned on or after June 30, 2016.
Great news for home buyers with significant student loan debt. Please read all the latest 2016 FHA guidelines here. FHA still permits home purchases with as little as 3.5% down payment and very attractive 30 year fix rates. Please contact us at ph: 800-743-7556 with any questions. Borrowers can also submit the short info request form on the right side for expedited service.