Major FHA Student Loan Monthly Payment Policy.
By George Souto, Your Connecticut Mortgage Expert
(George Souto NMLS #65149 FHA, CHFA, VA Mortgages)
FHA just issued Mortgagee Letter 2021-13 revising the FHA policy on student loans. Prior to Mortgagee Letter 2021-13, FHA required the monthly payments on student loans which were not in repayment or showed a "0" monthly payment on credit reports, to be established at 1% of the outstanding balance. This policy has had a huge negative impact on the ability of borrowers with students to qualify for a mortgage. 1% of the outstanding balance is far more than student loan monthly payments which are income based, and even larger than student loan monthly payments which are not income base.The new FHA policy for establishing the monthly payment for student loans have been revised as follows:If the payment is less than the monthly payment reported on the Borrower’s credit report, must obtain...
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