Qualifying for a Mortgage with Income Based Repayment (IBR) Student Loans

by on 3.16.16 in Qualifying

UPDATED March, 2017

Student loans and mortgage qualifying are indeed a hot topic. Since first posting this article in March 2016 both FHA and Fannie Mae have made significant changes to their treatment of Income Based Repayment student loans.

Some of the changes will help those with IBR student loans while others most certainly will not.

There are questions and answers in the comments section of this article every day.  This information is always kept up to date, and will always have the most current guidelines.

Feel free to ask your questions below, or reach out to us directly if you have specific questions, or would like an introduction to a lender that has experience with these guidelines and can help.

As more Millennials are looking to buy their first home, many are faced with the challenge of student loan debt and how lenders calculate payments when determining debt to income ratios.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Unlike other types of debt that include monthly payments of principal and interest, student loans often have reduced or deferred payments that do not include principal repayment.

Specifically, Income Based Repayment (IBR) plans limit your federal student loan payments to a percentage of your income. These plans can go a long way towards making payments manageable for young professionals just entering the workforce at entry level salaries. For those with very low income, payments can be as little as $0.

This is where things get interesting for mortgage lenders seeking to make sound underwriting decisions. Should they calculate debt to income ratios using the payment set under the IBR plan? Or, since the payments must eventually rise if the loan is ever to be paid off, should they use some type of proxy for a fully amortizing payment?

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

The answer depends on the type of mortgage you are applying for. Since the vast majority of borrowers with student loan debt aren’t looking at Jumbo loans, we’re going to focus on the different ways Fannie Mae, Freddie Mac, FHA, VA and USDA answer this question.

If you love details, you can read the entire guideline in italics. If you like to get right to the point, skip to the BOTTOM LINE in bold.

IBR Using a Conventional Fannie Mae Loan

UPDATED April 25th, 2017 – Fannie Mae has recently updated its guidelines to allow borrowers to use the payment that appears on your credit report.  That can be an IBR, PAYE, or REPAYE payment that does not pay off your loan at the end of the term.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

If no payment is reported on the Credit Report, the lender must use one of the options below to determine the repayment amount:

  • 1% of the outstanding balance;
  • the actual payment that will fully amortize the loan(s) as documented in the credit report, by the student loan lender, or in documentation supplied by the borrower:
  • a calculated payment that will fully amortize the loan(s) based on the documented loan repayment terms: or
  • if the repayment terms are unknown, a calculated payment that will fully amortize the loan(s) based on the current prevailing student loan interest rate and the allowable repayment period shown in the table below.

The current prevailing student loan interest rate’ can be found on a variety of websites. For example. see U.S. Department of Education Federal Student Aid in E-1-03. List of Contacts.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

The following table specifies the repayment period to be used when calculating a fully amortizing payment.

Calculating a Student Loan Repayment

Total outstanding balance of all student loans Repayment Period
$1— $7.499 10 years
$7.500 — $9.999 12 years
$10.000 — $19,999 15 years
$20.000 —$39.999 20 years
$40.000 — $59.999 25 years
$60,000 + 30 years

Note: The lender is responsible for determining that the payment on the credit report or other documents provided by the student loan lender or borrower are fully amortizing payments.
Example: Calculating an Amortizing

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Payment Balance: $17.500
Repayment period: 15 years
Interest rate: 4.29%
Monthly Amortizing Payment: $132.00

BOTTOM LINE:  Use the actual amortizing payment. If you are unable to document the actual amortizing payment, use the calculated payment using the method above as it will nearly ALWAYS be less than 1% of the balance. If ALL ELSE FAILS, use 1% of the outstanding balance.

IBR Using a Conventional Freddie Mac Loan

When a monthly payment on an installment debt is not reported on the credit report or is listed as deferred, the Seller must obtain documentation verifying the monthly payment amount included in the monthly debt payment-to-income ratio. If no monthly payment is reported on a student loan that is deferred or is in forbearance, and there is no documentation in the Mortgage file indicating the proposed monthly payment amount (e.g., the loan verification letter), 1% of the outstanding balance will be considered to be the monthly amount for qualifying purposes.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Examples of documentation of the required payment amount include:

  • A direct verification obtained from the creditor
  • A copy of the installment loan agreement obtained from the Borrower, or
  • If payments are currently deferred, the payment amount that will be required once the deferment or forbearance period has ended, as stated in a copy of a financial institution’s student loan certification or the installment loan agreement

While the Freddie Mac seller guide has not changed since the publishing of this article, we have spoken directly to Freddie Mac and received confirmation that they will in fact use the IBR payment when calculating debt to income ratios.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

BOTTOM LINE:  Use the documented IBR payment as long as it is greater than zero. For any loans with no payment, including IBR loans, the lender must fall back to the forbearance guidelines and use 1% of the outstanding balance unless you are able to provide documentation verifying the proposed monthly payments will be less than 1%.

IBR Using a Government FHA Loan

FHA 4000.1 Section II. A. 4. B. (H)

(4)  Calculation of Monthly Obligation

Regardless of the payment status, the Mortgagee must use either:

  • the greater of:
  • 1 percent of the outstanding balance on the loan; or
  • the monthly payment reported on the Borrower’s credit report; or
  • the actual documented payment, provided the payment will fully amortize the loan over its term.

BOTTOM LINE:  Unless you are able to provide documentation from your lender showing the actual payment that would amortize your loan in full over a fixed loan term is less than 1% of the balance, the lender will use 1% of your outstanding loan balance as the payment.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

IBR Using a Government VA Loan

Student Loans (5/1/2017)

  • Deferred Student Loans: If student loan repayments are scheduled to begin within 12 months of the date of VA loan closing, lenders should consider the anticipated monthly obligation in the loan analysis.  If the borrower is able to provide evidence that the debt may be deferred for a period outside that timeframe, the debt need not be considered in the analysis.
  • Student loans in Repayment:

If a student loan is in repayment or scheduled to begin within 12 months from the date of a VA loan closing, you must consider the anticipated monthly obligation in the loan analysis.

The anticipated monthly obligation should use the greater of:

Calculated payment at a rate of 5% of the outstanding balance divided by 12 months (example:  $25,000 student loan balance x 5% = $1,250 divided by 12 months = $104.17); or the payment reported on credit report

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Standard Repayment Plan: The required monthly payment is to be used for qualification purposes.

If a monthly payment is not reflected on the credit report or there is need for the payment amount required for qualification purposes, documentation, as evidenced by a letter from creditor or repayment schedule, is required to verify monthly payment.

BOTTOM LINE: Use the above formula for to calculate any payments that are not fully amortized to pay off at the end of the term.

IBR Using a Government USDA Loan

If the borrower has a student loan with an income based repayment, you must use 1% of the balance. Below you will find the guideline directly from the USDA underwriting manual:

Student loans. Lenders must include the greater of

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

  • One percent of the outstanding loan balance. OR
  • The fixed payment as reflected on the credit report.

Income Based Repayment (IBR) plans; graduated plans, adjustable rates, interest only and deferred plans are examples of repayment plans that are subject to change and do not represent a fixed payment or repayment plan. These types of repayment plans are unacceptable to represent a long term fixed payment repayment plan.

WHAT DOES IT ALL MEAN?

VA and USDA loans are both limited. Unless you are a veteran or buying in a “rural” area as defined by the USDA, these loans aren’t an option. If they are, the good news is both have straightforward, borrower friendly treatment of IBR plans.

For most people, the question will come down to which programs you qualify for and then which offers the most favorable income based repayment calculation. If you need to use FHA due to lower credit scores or higher debt to income ratios, things just got a lot tougher.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

After offering guidance earlier this year allowing the use of IBR payments, the current guidelines require documentation of the actual amortizing payment or 1% of the outstanding balance will be used. In either case, the payment used for qualifying will be higher than the current IBR payment. If your loan balance is relatively large, this treatment will likely erase much, if not all, of the benefit of FHA’s higher debt to income ratios.

If you are able to qualify using Fannie Mae or Freddie Mac programs, you have a good bit more flexibility. In most cases, a borrower that can be approved through Fannie Mae’s automated underwriting system (AUS) will also be approved through Freddie Mac’s AUS. This is great news if you have an IBR payment that is greater than zero. Freddie will use the IBR payment reported on the credit report so you should be home free.

If you are working with a lender that ONLY offers loans underwritten to Fannie Mae guidelines OR you have an IBR payment of $0, Fannie has an option that will not be as bad as using 1% of the balance.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Let’s look at an actual scenario for a borrower I’m working with right now.

She’s looking to buy a home for $350,000. Her income is just over $72,000 per year. She just went through the annual review on her IBR plan and for the next 12 months she pays $146 a month on roughly $117,000 of student loan debt. If you’ve been paying attention up to this point, you see where this is going.

Since she has good credit and her debt to income ratios are under 45% using the IBR payment, we’re in luck. We can use Freddie Mac guidelines and pull the $146/month from the credit report and she’s good to go.

WHAT IF, her IBR payment had been set at zero? In that case, we could look at going FHA. Under current guidelines we simply use 1% of the $117,000 loan balance as the monthly payment. The bad news is this pushes us over the maximum FHA debt to income ratio of 56.9%. That doesn’t work so let’s move on to Fannie Mae.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP!

Assuming her lender would not give us documentation of a fully amortizing payment AND her loan documentation doesn’t provide enough information for us to calculate the amortizing payment, we have to use the calculated method using the ‘current prevailing student loan interest rate’.

Using the chart above we see that we use a 30 year term and the current prevailing interest rate is 4.29%. That leaves us with a monthly payment of $578. Even though the calculated payment is much higher than the actual IBR payment, we can keep the debt to income ratio just under the maximum 45% and approve the loan.

The bottom line is, “it’s complicated.” But there are options and if you’re working with an experienced loan officer who understands the intricacies of student loan qualifying guidelines, there should be an option for you. As always, we’re here to help. If you have any questions, or specific scenarios reach out directly or in the comments section below.

276 Comments
  1. Hi! I am in the same predicament as most of the commenters. I make $93500. I have a total of $193k in grade school debt. Some additional credit card debt and a credit score of 725. I pay $864/ month for consoldated loan and 107 for a private loan.I am possibility interested in a 2 family to reduce my portion of the mortgage. How will this impact my ibr? Is better to look at a single family loan. I had thought about an FHA loan but it sounds like it is best to pursue another type of loan. Any help would be appreciated. Thanks

    comment by Rachel
    on 7.15.17 at 3.24 pm
    1. Hi Rachel,
      You would not be able to use an IBR payment when calculating your debt to income ratio for an FHA loan. Freddie Mac Home Possible will allow you to buy a 2 unit property using your IBR payment.

      The hard part of this is going to be finding a lender that has experience with these guidelines, and that’s where I can help 🙂

      If you would like an introduction to someone that can help, shoot me an email to [email protected] and let me know what State you’re buying in.

      Hope this helps?

      comment by Scott Schang
      on 7.15.17 at 3.30 pm
  2. I’m going to hop on this awful IBR bandwagon… I have about 68k in loans, I’m approved for PSLF and my payment on the IBR is $0. Every option I’ve tried here in Idaho has or me over the DTI limits. So do I wait out the 3 years until my loans are forgiven? It seems like there should be consideration for PSLF program during underwriting?!?!?!

    comment by Elisha
    on 7.13.17 at 6.32 pm
    1. Hi Elisha,

      The lender you’ve spoken to may not understand the guidelines. Using a conventional loan, you can use your $0 on your IBR loan. As long as the loans are not deferment or forbearance, you can use the $0 payment.

      I have your email address, I will introduce you to a lender friend of mine in ID that has experience with this!

      Hope this helps?

      comment by Scott Schang
      on 7.13.17 at 6.56 pm
  3. I can’t find any information out there so far about GRADUATED repayment. My current payment is $256 for 2 years; then it jumps up and has a new stable payment for two years, then increases agin, etc. Can I use $256 for FHA even though it will eventually increase- it still fully amortizes over the 10years.

    comment by Patricia
    on 7.11.17 at 10.19 pm
    1. Hi Patricia,

      FHA is going to require that your payment be fully amortized to pay off at the end of a pre-determined term. It would make sense that using the payment that eventually pays off the loan at the end of the term, would be a way to approach this. Do you know what the final graduated payment is?

      The next challenge is going to be to find a FHA underwriter that agrees with me on that. I have not personally run into this specific situation, but I would definitely take this to an underwriter and fight for it.

      The other option would be Conventional financing. Is there any reason why you cannot use a Fannie Mae or Freddie Mac conventional loan? Both of these underwriting guidelines allow you to use the reported payment when calculating your debt to income ratio.

      If you would like an introduction to a lender that I know and trust, and has experience with student loans, shoot me an email to [email protected] with the State you’re buying in, and let’s see if we can get you some solid answers.

      Hope this helps?

      comment by Scott Schang
      on 7.12.17 at 11.49 am
      1. It would eventually be more than the 1%. My underwriter wants to use the 1% rule for approx $455, in the last two years of repayment i think it is around $700 each month. I am looking for a loophole- obviously, because I think the way the rule is worded and the way my verification is also worded I should be able to use the $256 payment. The rule says the actual payment if it full amortizes- which it does, and my verification letter says term: 119 months, based on the current principal balance and interest rate, your accounts total monthly payment amount will be 255.56. Obviously if I apply for a home loan in two years the amount would be different. I’m just wondering who has the final say? Will FHA deny the loan? will the underwriter get in trouble when my payment increases? No where on my verification letter does it say it is a graduated repayment. It is a grey area in my opinion- thanks for being a sounding board and I appreciate any further input you might have.

        comment by Patricia
        on 7.12.17 at 3.21 pm
        1. I spoke to an underwriter this morning about this. They stated that FHA will not allow a graduated payment, and that the 1% will be required.

          Your question about who has the final say? At the end of the day, it’s HUD/FHA. If HUD does not insure the loan, the lender who originated the loan is on the hook for an uninsured FHA loan. To a lender, that means you’ve got this loan on the books that you cannot sell, so that you can get your money back to lend to another borrower. It’s called an unsellable loan, or a buyback if the lender if forced to buy the loan back sometime in the future.

          Different lenders have different levels of tolerance for risk. Some lenders have their underwriters taking a very conservative stance, other lenders could take a less aggressive approach. My experience has always been that the rule is that an underwriter is going to take the absolutely most conservative approach to interpreting the guidelines.

          It is my opinion that if you are using FHA financing, your debt to income ratios will be calculated using 1% of the balance as a payment.

          comment by Scott Schang
          on 7.12.17 at 4.25 pm
  4. Hi, my husband owes 55k in student loans. He has decent credit. And he recently got a job with our county so he’s on the public service loan forgiveness program and since May qualified for a $0 monthly payment since he makes $43,200 and we are a family of 5. As of February when we spoke with a lender, we didn’t qualify because the debt to income ratio and he wasn’t on the program yet. Just wondering if you could tell me how being at $0 now would change from when he was ok deferment. I have bad credit due to hospital bills unfortunately. But like someone else who said who also happens to be frol Wisconsin, we’ve thought about divorcing so I don’t have to be included in the usda since I owe like $9k in hospital bills.

    comment by Elle
    on 7.11.17 at 4.41 pm
    1. I meant husband**

      comment by Elle
      on 7.11.17 at 4.42 pm
      1. I figured that out and fixed it 🙂

        comment by Scott Schang
        on 7.11.17 at 5.06 pm
    2. Hi Elle,

      As long as the student loan is not currently deferred, you can use conventional financing with a little as 3% down payment. Conventional financing will allow you to use a $0 IBR payment when qualifying.

      USDA is going to require you to use 1% of the loan balance when calculating your debt to income ratios. That basically adds a $55 debt to your liabilities for the purposes of qualifying.

      Divorcing should not be an option, and would not be an issue with a Conventional loan. If you medical bills are in collection status, most automated underwriting systems will not require that medical collections be paid.

      With a Conventional loan, you do not have to be on the loan, and your credit score will not hurt your ability to qualify.

      Hope this helps?

      P.S. I have a fantastic lender that has a lot of experience with IBR payments. I will make an introduction by email.

      comment by Scott Schang
      on 7.11.17 at 4.48 pm
      1. “I have a fantastic lender (in Wisconsin) that has a lot of experience with IBR payments. I will make an introduction by email.” You wrote this to a person from Wisconsin. I am on the 6th or 7th lender/loan rep who insists that I have to calculate the 1% into my total debt. I pay zero on the IDR repayment plan. Is that the same as IBR? I would love your person’s name also so I can get on with my life and buy a residence instead of spending my days researching, emailing and worrying no one will give me the loan. Thank you!!

        comment by Jackie Ponich
        on 7.18.17 at 7.01 pm
        1. Hi Jackie,

          Yes, I have a great lender in WI that can help. They can also help with your other question regarding automated underwriting decisions.

          I will send an introduction by email now. You should see their contact info in the next 10 minutes.

          Hope this helps

          comment by Scott Schang
          on 7.19.17 at 9.33 am
  5. HI I just had my lender tell me tat I can not get approved for an FHA loan because my student loans are 75,000 and with the 1% it will put me over the debt/income ratio limit. I can not get a traditional loan because I am only 2 years out of bankruptcy. Is there any way around this. My student loans are currently in IBR status with $13 a month payments.

    comment by Nicole
    on 7.7.17 at 2.51 pm
    1. Hi Nicole,
      FHA currently requires the use of 1% of the student loan balances unless a fully amortizing payment can be demonstrated. With IBR, you won’t be able to do that unless your lender can provide you documentation of what the actual amortizing payment would be. In our experience, the only way we’ve seen that happen is when the borrower switches from IBR to a traditional repayment plan.

      Depending on your exact qualifications there are a few options that allow the IBR payment for qualifying, including Fannie Mae and Freddie Mac which both have 3% down options. Where are you located? If you’d like, we can connect you with an expert lender in your area who is well versed in IBR guidelines.

      comment by Josh Lewis
      on 7.7.17 at 3.33 pm
  6. Thanks for the information. This is the most informative piece I have found. So, I have $56,000 in student loan debt and my IBR is $70. My other revolving debt totals $530 (car payment, credit cards). My income is only $39,000 as I work in a public service field. I am making qualified payment LZ towards my loan forgiveness after 10 years. I was interested in the FHA and USDA loans, but not sure if my debt to income ratio would put me over the top at this point!? Can you please help?

    comment by Tim
    on 7.5.17 at 4.49 am
    1. Hi Tim,

      Both USDA and FHA are going to require that you have an amortized student loan payment. Since your payment is IBR currently, you would either need adjust your repayment plan to pay off your loan at the end of the term, or use 1% of the balance as a qualifying payment.

      Your best chance at qualifying is to use a conventional loan. Conventional financing will allow as low as a 3% to 5% down payment, and will let you use your $70 IBR payment when qualifying.

      If you would like, I can introduce you to a lender that has experience with these guidelines? If you shoot me an email to [email protected], and let me know what State you’re buying in, I can make that introduction later today.

      Hope this helps?

      comment by Scott Schang
      on 7.5.17 at 10.08 am
  7. I have multiple student loans. Some of my loans are in repayment and i am enrolled in the Public Service loan forgiveness and i am on an income based repayment plan. I am in still in school and I have some loans in deferment. I was able to get a letter from my lender stating what my income based payment will be for those loans. Is this acceptable? Or will the lender still use the 1% of the loan for the monthly payment?

    comment by Nita
    on 6.30.17 at 5.49 am
    1. Hi Nita,

      Really good question! My experience is that the loan cannot be deferred, or the 1% will be used. I can see an underwriter potentially using that statement, but I think there’s a better way to protect yourself from surprises here.

      If you are currently looking to buy a home, I would start making the IBR payment on those loans. Once you buy the home, you can put those loans back into a deferred status.

      If you would like, shoot me an email to [email protected], and let me know what State you’re buying in, and I can introduce you to a lender friend of mine that has experience with these guidelines.

      Hope this helps?

      comment by Scott Schang
      on 6.30.17 at 9.17 am
  8. This Ibr rule seems so unfair. I work in public service income is minimal and qualify for IBR with zero monthly payment. I have $44k student loan debt and using the 1% rule would put my monthly calculations upward of $400/mth for DTI, but a person who maybe has an IBR payment of $1 obligation would only have that $1/mth factored in for dti? It just doesn’t make sense to me! Using this formula would drastically lessen the loan amount that I qualify for as opposed to the person who’s $1 is factored.

    comment by Jett
    on 6.22.17 at 8.39 am
    1. Hi Jett,

      As long as your student loans are in repayment, even with a $0 payment, you can qualify for a home loan now. You have to use a Conventional loan, but it’s very possible, we do these all the time.

      If you would like an introduction to someone that has experience with these guidelines, shoot me an email to [email protected] and let me know what State you’re trying to buy in.

      Hope this helps?

      comment by Scott Schang
      on 6.22.17 at 9.49 am
  9. hi so if someone uses the income based program ….for 48000….it states you could being paying alot more ….is it just going to grow and grow into 100000 dollars and more then ? while I sit and pay hardly anything because I do not make much at all but like to get a bank loan some day like for car or home ? plus I go crazy knowing I m paying let’s just say 100 month and my loan is growing and growing into doubke the amount or more …yikes please help thank u

    comment by Renee lefthand
    on 6.20.17 at 4.18 pm
    1. Hi Renee,

      Yes, that’s the way that it works. An IBR payment is covering a portion of the interest due on your loan. Each month, the unpaid interest is being added to the principal balance that you owe.

      Many that use IBR payments work in the public sector as a government worker, teach, police, fire and are eligible to have the loans forgiven in 10 years. If you do not work in the public sector, and some point, you’re going to have to start paying down your student loan.

      Now, let’s look at this another way. You can buy a home using your IBR payment. Over the years, you will earn equity in your home. Down the road, you can refinance your home to pay off your student loans.

      You’re right about one thing though, it’s going to have to be dealt with at some time.

      Hope this helps?

      comment by Scott Schang
      on 6.20.17 at 5.19 pm
  10. I have Ann ibr and a boyfriend who’s a veteran. It’s very complicated can you please recommend a good loan officer in my area. I live in Orlando Florida 32832

    comment by Clare Kramee
    on 6.19.17 at 9.33 am
    1. Yes Clare,

      I’ve will make an introduction by email.

      comment by Scott Schang
      on 6.19.17 at 12.28 pm
  11. I am looking for a mortgage lender in Wisconsin that is highly skilled in dealing with student loans. My husband and I have a combination 200,000 in student loans. His payment is zero, and my IBR is $560 a month. We have no other debt and we live frugally. Our income is about $115,000 a year. My plan was to purchase a home on my income ($90,000) and debt only, but we live in a community property state and they said they need to look at my husbands monthly debts (which is zero on IBR). We’ve even considered getting divorced until the home purchase is complete so that we don’t have to factor in his student loan debt. We want to purchase something under $200,000

    comment by Kate
    on 6.13.17 at 1.32 pm
    1. Hi Kate,

      Oh my gosh…you should not have to get divorced to do this! I am going to send you an introduction to a lender friend of mine that can help. Being in a community property State has nothing to do with using your husbands student loan debt. First of all, your lender is trying to get you approved for a FHA loan. That’s the reason for having to use your husband’s debt. Using a Fannie Mae conventional loan, not only do you not have to count your husband’s debt, but you can also use his $0 IBR payment when qualifying.

      You’ll see the introduction in a couple of minutes, hope this helps?

      comment by Scott Schang
      on 6.13.17 at 1.44 pm
  12. I filed chapter 7 bankruptcy over 2 years ago and I have 700 middle score, my IBR payment is $102.00 a month but I have over 150k in student loans. my dti is 58% Is it a program that could help me with a mortgage? or should just wait after the 4 year waiting period

    comment by Antionette
    on 6.5.17 at 12.16 pm
    1. Hi Antionette,

      At this time, only conventional underwriting guidelines will allow you to use an IBR payment when qualifying. If you DTI is 58% using your IBR payment, you’re going to need to do a little work on get your debts down, or use a co-signer to help income qualify.

      FHA will allow you to buy with a 56.99% back end DTI, but will not let you use your IBR payment.

      Conventional guidelines are going to require a 4 year waiting period following the discharge of a chapter 7 bankruptcy.

      Hope this helps?

      comment by Scott Schang
      on 6.5.17 at 12.24 pm
  13. I looking for someone to help me navigate getting a loan in the Austin Texas area. I have an IBR and am looking to buy in next year. I have my masters and racked up 120,000 in student loans. My income is 70,00 from employment, not sure if I can use child support as well… if so 80,000. My IBR is zero at this time.

    comment by Raven
    on 6.1.17 at 7.12 pm
    1. Hi Raven,

      I’ve made an introduction in a separate email. You would be eligible for conventional financing using a $0 payment as long as the loans are not deferred or in forbearance.

      You can use child support is you can document a history of receiving it, and show that it will continue for 3 years.

      Hope this helps?

      comment by Scott Schang
      on 6.1.17 at 8.28 pm
  14. Hello. I am like everyone caught in this student loan dilemma. My husband and I are looking for a FHA construction loan but current middle score is 624/626 according to the last mortgage company. After adding in the 1% student loan our DTI went from 36 to 74%. I’ve heard that they are tweaking the requirements for the student loan. Have you heard anything? Will there be changes soon? Should we wait it out? I’m in Mississippi and would love to work with you cause you seems so knowledgeable. But if not, please send a very good referral.

    comment by KWms
    on 6.1.17 at 12.02 pm
    1. Also our student loan combined is 260k and they are deferred. Should we get on an IBR plan?

      comment by KWms
      on 6.1.17 at 12.04 pm
      1. As long as your loans are deferred, your options are limited to the 1%, or you can use the Fannie Mae payment table to establish an amortized payment.

        If you get on an IBR plan, you can use that payment to qualify for a conventional loan. Your debt to income ratio would need to be under 50%, and you would most likely need a minimum of 5% down payment. There are conventional programs that allow for 3% down with income limits.

        I will make an introduction to a lender friend of mine that can help in Mississippi with experience with these guidelines. He can help walk you through all of these options.

        Hope this helps?

        comment by Scott Schang
        on 6.1.17 at 12.11 pm
  15. Looking for a IBR payment lender for a educator couple in Georgia. Do you have any recommendations? We have been searching for almost a year

    comment by Ms Taylor
    on 5.31.17 at 3.46 pm
    1. Hi Ms Taylor,

      Yes, I have a great lender that can help in Georgia and has a lot of experience with the IBR payment loan guidelines.

      I will send an introduction by email.

      Hope this helps?

      comment by Scott Schang
      on 5.31.17 at 5.01 pm
      1. Could you please refer me lender in the Atlanta GA area regarding the IBR also

        comment by T. Bell
        on 6.2.17 at 12.21 am
        1. comment by Scott Schang
          on 6.2.17 at 8.34 am
X
Contact
Your message has been sent.
Oops! That doesn't seem right.
X
Share
Email to a Friend
Your message has been sent.
From
To
Message
X
Create an Account
Your account has been created.
Check your email for additional account details.
Save
Searches
Add
Notes
Rate
Properties
Invite Someone to Your Search
Share your favorite properties and notes, and begin receiving suggestions based on joint activity.
X
Property Alerts
Your property alert has been saved successfully.
X
Reset Your Password
An email has been sent to you with additional details for resetting your password.
X
Request a Showing
Your request has been submitted. An agent will be in touch with you shortly to confirm the showing details.
Your Info