FHA Student Loan Payment Calculation For 2021
The U.S. Department of Housing and Urban Development (HUD) has updated the payment calculation of monthly obligation for student loans. The change is effective for all case numbers assigned on or after August 16, 2021
Lenders must include all student loans in the Borrower’s liabilities, regardless of the payment type or status of payments.
Required Documentation: If the payment used for the monthly obligation is less than the monthly payment reported on the Borrower’s credit report, the Lender must obtain written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor or student loan servicer. The Lender may exclude the payment from the Borrower’s monthly debt calculation where written documentation from the student loan program, creditor, or student loan servicer indicates that the loan balance has been forgiven, canceled, discharged, or otherwise paid in full.
Calculation of Monthly Obligation: For outstanding Student Loans, regardless of payment status, the Lender must use:
- the payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or
- 5 percent of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero
FHA announces major changes in in Mortgagee Letter 2021-13. We can now calculate your student loan payments based on 0.5% of the balance or take a Income Based Repayment Plan! FHA Updates the rules on Student Loan monthly payments deferred or Income Based Repayment plan… (4) Calculation of Monthly Obligation For outstanding Student Loans, regardless of payment status, the Mortgagee must use: • the payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or • 0.5 percent of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero.
Kentucky FHA Mortgage Lender 