Today, 44 million Americans have student loan debt. So, it’s no surprise that student debt may be what’s keeping your client from their dreams of owning a home.
But there’s good news—Fannie Mae recently implemented new policies that may help more potential buyers qualify for a mortgage loan.
“We understand the significant role that a monthly student loan payment plays in a potential home buyer’s consideration to take on a mortgage, and we want to be a part of the solution,” says Jonathan Lawless, Vice President of Customer Solutions for Fannie Mae.
This policy simplifies the way a lender calculates student debt payments into a borrower’s debt to income ratio (DTI); potentially lowering the borrower’s total DTI percentage. This allows lenders to accept student debt payment information listed on a credit report, even if it's an income-based repayment plan.
Who Can Benefit from the Changes?
These new Fannie Mae policies may be a good fit for your clients who have student debt or debts paid by others, like a car loan or credit card debt. This change Borrowers can potentially qualify for a home they may not have otherwise, or qualify for a higher-priced home.