Student Loan Calculation
The debt-to-income ratio (DTI) is an important number used to calculate the potential home-buying power a borrower has. below is a look at the calculations that will be used to determine the DTI for borrowers who have outstanding student loan debt and are applying for the following home loans
Fannie Mae
Monthly student loan payments as listed on credit report or student loan statements; if deferred or in forbearance or have zero payment amount, either 1% of the balance or one monthly payment.
Freddie Mac
Monthly student loan payment as listed on the credit report or student loan statement; if deferred or in forbearance, 0.5% of the balance.
FHA
Monthly student loan payment as listed on the credit report or student loan statement; if deferred or in forbearance or have zero payment amount, 0.5% of the balance.
VA
Monthly student loan payment as listed on the credit report, student loan statement, or 5% of the balance divided by 12 months, whichever is higher; if deferred, not included in underwriting.
Student loan debt payment calculations aim to help more borrowers obtain homeownership despite student loan debt that may have previously held them back.