Student Loan FAQs

Wondering how to factor existing student debt into your clients’ DTI ratios?

Keep this checklist handy and you can skip study hall.

  • FHA: Use documented payments, if fully amortized over full term. If no payments are documented, use 1% of the existing principal balance.
  • Freddie Mac: Use documented payments. If no payments are documented, use 1% of the existing principal balance.
  • Fannie Mae: Use 1% of the principal balance for payment. You can use less than 1% of the principal balance for payment if you’re able to document a fully-amortizing payment.
  • USDA: Use greater of:
    • 1% of the principal balance for payment, or a
    • Documented payment history.
  • VA: Use documented payments. Clients can still qualify with no recent payments if they have been deferred for 12 months.

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