How do student loans count in conventional DTI?
Fannie Mae uses the actual reported payment from the credit report, or 1% of the outstanding balance if the credit report shows $0 (deferred). Freddie Mac uses the actual payment if reported, or 0.5% of the outstanding balance for deferred or income-driven loans. The difference matters on tight files.
Plain-English explanation
Student-loan DTI calculation differs between Fannie and Freddie. Fannie's DU: actual payment from the credit report, OR if $0 is reported, 1% of the outstanding balance. Freddie's LP: actual payment if reported, or 0.5% of the outstanding balance for deferred/IDR loans. On a $80k student loan balance with $0 payment showing, that's $800/month under Fannie vs $400/month under Freddie — a real DTI difference. Lenders sometimes choose the engine that fits the file. Subject to Fannie/Freddie guidelines.
What can change the answer?
Income type and history, recurring debts shown on credit, automated vs manual underwriting, compensating factors, and overlays can change the answer.
Want the real answer for your conventional file?
Conventional guidelines are the rule. Your credit, income, DTI, PMI, LLPAs, and Florida payment math are what decide the actual answer.
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.