Freddie Mac Student Loan Guidelines
Freddie Mac does not currently allow you to have deferred student loan payments when qualifying for a home mortgage.
If you are still in school and not making payments on your student loans now, there are several methods that the lender will use to determine what payment will be used for qualifying purposes.
Payment Calculation Options
If no monthly payment is reported on a student loan on your credit report, the lender must document what the payment would be if you were to start making payments.
Examples of documentation of the required payment amount include:
- Payment listed on current credit report (IBR payments are OK)
- A statement from the student loan lender stating what the payment will be in the future; or
- A copy of the installment loan agreement; or
- If no other documentation can be obtained showing what your future payments would be, the lender must use 1% of the loan balance as the monthly payment for qualifying purposes.
IBR Income Based Repayment
Freddie Mac is currently the only underwriting method that will allow you to use an IBR, or income based repayment amount when qualifying for a home loan.
You DO NOT Have to Use 1% of the Balance
This is a common misunderstanding by inexperienced loan officers. In most cases, you can document your payments in one of the other ways recommended above.
You only need to use a 1% calculation if you cannot obtain any other documentation showing what your payments will be once you start repayment.
Not all loan officers know the guidelines, and not all lenders follow the same guidelines. It is possible that your loan officer does not have any experience with the guidelines, or the lender has chosen to create their own guidelines.
If a lender tells you something different than what you’ve read here, don’t be discouraged. Not all loan officers or lenders are created equal. Don’t take no for an answer!
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