Student Loan Guidelines For Qualifying for a Mortgage Loan in Kentucky.
Loan type | Student Loan Payment Requirement |
FHA | Must be included in the borrower’s liabilities regardless of the payment type or status. The payment amount must be either: ▪ The greater of: · ..5% of the outstanding balance on the loan or · Monthly payment reported on the borrower’s credit report, or ▪ The servicer’s documented payment provided the payment will fully amortize the loan over the repayment term period |
VA | Deferred A payment does not need to be included if written evidence supports that the student loan debt will be deferred beyond 12 months of closing. In Repayment Include loans with payments starting within 12 months. Calculate threshold payment as a rate of 5% of outstanding balance divided by 12 months. If credit report payment is higher, use credit report payment. If current documentation from student loan servicer reflects actual terms and payment for each loan, the verified payments may be used even if less than the threshold payment calculation. |
USDA | Fixed Payment A permanent amortized, fixed payment is used when documentation supports fixed payment, interest and term. Non-Fixed payment Use .5% of the loan balance reflected on the credit report. Payment arrangements that are deferred or non-fixed (Income Based Repayment (IBR), graduated, adjustable, interest only, etc.) may not be used. |
Fannie | Loans in Repayment Period ▪ If provided, use the credit report payment ▪ If credit report is incorrect, obtain student loan documentation from the servicer to verify the payment used for qualification Income Driven Repayment Plan Use the student loan documentation to verify the actual monthly payment. Borrower may be qualified with a $0 payment if the documentation supports it. Loans in Deferment or Forbearance ▪ A payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment) or ▪ A fully amortizing payment using the documented loan repayment terms |
Freddie | Loans in Repayment Period Use the greater of payment reported on credit report or .5% of the higher of original or outstanding loan balance as shown on credit report. Loans in Deferment or Forbearance Use greater of payment reported on credit report or .5% of the higher of original or current outstanding loan balance as shown on the credit report. Loan Forgiveness Cancelation Discharge Employment Contingent Repayment Programs Payment may be excluded if file contains documentation that indicates: ▪ Monthly payment is deferred and/or in forbearance and full balance of the loan will be forgiven, canceled, discharged or will be paid if qualified for an employment-contingent repayment program and ▪ Borrower currently meets requirements for the student loan forgiveness/cancelation program Obtain documentation from the student loan servicer to show the loan will be forgiven, canceled, discharged or that the borrower qualifies and is approved under an employment contingent repayment program that will extinguish the debt. |
Joel Lobb
Mortgage Loan Officer
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
fax: 502-327-9119
email: kentuckyloan@gmail.com
email: kentuckyloan@gmail.com
