May 9, 2014
A reader asks, “My student loans are currently based on my income/family size. It says I have a 0.00 payment every month. It is good for a year, and my income will be staying the same amount.”
“I printed all this out to submit to the lender, but my loan officer really wanted/needed a monthly repayment amount, which I cannot give him. I am wondering if the lender will just estimate a monthly repayment number or how that works?”
The problem in this situation is that the lender’s standards are likely the applicable guidelines above and beyond what is stated in the FHA loan rules found in HUD 4155.1 Chapter Four under the heading titled, “Borrower Liabilities: Projected Obligations and Obligations Not Considered Debt”.
Section Six of Chapter Four states:
“Debt payments such as a student loan or balloon note scheduled to begin or come due within 12 months of the mortgage loan closing must be included by the lender as anticipated monthly obligations during the underwriting analysis.”
What about FHA borrowers who plan on deferring student loan debt? FHA loan rules anticipate this situation, stating:
“Debt payments do not have to be classified as projected obligations if the borrower provides written evidence that the debt will be deferred to a period outside the 12-month timeframe.”
Lender standards may apply above and beyond these rules–borrowers should check with the lender to see what may be required in these cases.
Do you have questions about FHA home loans? Ask us in the comments section. You can get information about applying or getting pre-approved for an FHA loan at FHA.com, a private company and not a government website.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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