How Student Loans Are Viewed With Fha Loans

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
#1
(1) Definition Student Loan refers to liabilities incurred for educational purposes.
(2) Standard The Mortgagee must include all Student Loans in the Borrower’s liabilities, regardless of the payment type or status of payments.
(3) Required Documentation If the payment used for the monthly obligation is:
  • less than 1 percent of the outstanding balance reported on the Borrower’s credit report; and
  • less than the monthly payment reported on the Borrower’s credit report;
the Mortgagee must obtain written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor.
(4) Calculation of Monthly Obligation Regardless of the payment status, the Mortgagee must use either:
  • the greater of:
    • 1 percent of the outstanding balance on the loan; or
    • the monthly payment reported on the Borrower’s credit report; or
  • the actual documented payment, provided the payment will fully amortize the loan over its term.