Are student loans a barrier to mortgage approval?
Yes and no. Student loans can affect your ability to be approved for a mortgage, but good news is here! On Friday June, 18 2021 the Federal Housing Administration announced they were taking extra steps to make housing more accessible to those with student loan debt.
Efforts made by the FHA include removal of a requirement that lenders calculate a percentage of outstanding student loan debt when determining eligibility. The new policy will now take into consideration actual student loan payments, which are oftentimes much lower. All of this to say, borrowers who may not have been eligible for an FHA-insured mortgage may now meet minimum requirements.
Why is this important? Per Marcia L. Fudge, Housing and Urban Development Secretary, “As our country comes together to remember Juneteenth and acknowledge National Homeownership Month, we are reminded of a basic truth: that, too often in our history, the march toward freedom has been a long, halting, and uneven journey. Homeownership is the cornerstone of the American Dream and the best way to build generational wealth. I am proud that FHA is taking action to make it easier for borrowers with student loan debt to qualify for a federally insured mortgage. This new policy will make a big difference for individuals throughout our nation and is another step in our mandate to promote equity and opportunity for homeownership.”
So, what could this potentially mean for you?
To get qualified by a loan officer, check out our Find a Loan Officer tool!
For more on this announcement from the FHA, please click here.
Source: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_21_103
Disclaimer: Homeside Financial, LLC is an Equal Housing Lender; Co. NMLS ID #1124061. www.nmlsconsumeraccess.org. Not an offer of credit or commitment to make a loan; all approvals are subject to underwriting guidelines including but not limited to: acceptable current credit worthiness, income history, etc. Loan programs & options are subject to change at any time. Homeside Financial, LLC is a mortgage lender and is not affiliated with or acting on behalf of HUD, VA, FHA or any agency of the federal government.