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.
What this actually means.
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.
Where this can move.
Income type and history, recurring debts shown on credit, automated vs manual underwriting, compensating factors, and overlays can change the answer.
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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.