How do student loans count in conventional DTI?
The repayment status and conventional program matter. Fannie Mae may accept a documented $0 income-driven payment; that is different from its treatment of deferment or forbearance.
What this actually means.
For Fannie Mae, use the supported current payment when appropriate. A documented $0 income-driven payment may be counted as $0; a deferred or forborne loan uses 1% of the balance or a documented fully amortizing payment. Freddie Mac generally requires a positive amount and uses 0.5% when the report shows $0 unless the file supports a different current positive payment. Upcoming income recertification or payment changes need review under the applicable rules.
A simple example
Illustration only. This is not an approval or a loan offer.
Where this can move.
Fannie Mae, Freddie Mac, FHA or another program; repayment versus deferment or forbearance; current statements; upcoming payment changes; and lender requirements.
Check the sources
- Fannie Mae: monthly debts, student loans and IRS plans
- Freddie Mac: student-loan payment guidance (PDF)
Sources checked . Program guidance and lender requirements can change.
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More conventional questions on DTI.
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.