How Do FHA Mortgage Lenders treat Student Loans?
Student Loan Payments – Student loan(s) would be calculated as follows, regardless of the payment status. FHA mortgage lenders must use either the greater of: 1% of the outstanding balance on the loan; or the monthly payment reported on the FHA mortgage applicants credit report; or the actual documented payment, provided the payment will fully amortize the loan over its term.
FHA – Student loans must be included in the FHA mortgage applicants liabilities, regardless of payment type or status of payments (cannot be excluded based on deferral or forbearance).
• The actual documented payment provided the payment will fully amortize the loan over its term.
• If the actual fully amortized payment is not provided then the greater of:
A) 1% of the outstanding balance of the loan;
B) The monthly payment reported on the borrower’s credit report.