Mortgage With Student Loans
How your student loans count when you qualify for a home loan, including deferred loans and income-driven plans. The rule depends on the loan type.
How student loans are counted
Each item below is a rule of at least one loan program we offer. Your loan type decides which one applies.
- Fannie Mae: a verified $0 income-driven payment can be counted as $0.
- Fannie Mae: when no payment is reported, deferred loans or loans in forbearance count at 1% of the balance or a payment based on the repayment terms.
- FHA: every student loan counts, whatever its payment status.
- FHA: when the credit report shows a zero payment, 0.5% of the balance is used.
- FHA: a balance that is forgiven, canceled, or discharged can be left out with written proof.
- Fannie Mae: a loan someone else pays can be left out with 12 months of proof.
Income-driven plans count
Deferred loans still count
FHA uses a set percent
Forgiven balances drop off
Paid by someone else
Pay off with a refinance
How Student Loans Affect A Mortgage
Student loans count as monthly debt when you qualify. How much each one counts depends on the loan program and your payment status.
On a Fannie Mae loan, the lender can use the student loan payment on your credit report. If the report does not show the correct payment, the payment on your most recent student loan statement can be used.
If the credit report shows $0 and you are on an income-driven plan, a Fannie Mae loan can qualify you with a verified $0 payment. FHA and Freddie Mac use 0.5% of the balance when the credit report shows zero. To pay student loans off with your home, see our student loan cash-out refinance.
Deferred loans and loans in forbearance still count. When the credit report shows no payment, a Fannie Mae loan counts them at 1% of the balance or a payment based on the repayment terms. On FHA, every student loan counts. At least one VA program leaves out a loan deferred at least 12 months past closing, with written proof of the deferment, and counts a loan in repayment at 5% of the balance divided by 12, unless the credit report shows a higher payment.
Why choose Saxton for a mortgage with student loans
For borrowers with student debt who want to know how each loan type will count it before they apply.
Income-Driven Plans Count
On a Fannie Mae loan, a verified $0 income-driven payment can be used as $0 when you qualify.
Deferred Loans Still Count
When the credit report shows no payment, Fannie Mae counts deferred loans or loans in forbearance at 1% of the balance or a payment based on the documented repayment terms.
FHA Uses A Set Percent
FHA counts every student loan. When the credit report shows a zero payment, 0.5% of the balance is used. FHA does this whatever the payment status of the loan.
Forgiven Balances Drop Off
FHA leaves out a balance that has been forgiven, canceled, discharged, or paid in full, with written proof. Freddie Mac can leave out a loan with 10 or fewer payments left before the full balance is forgiven, if you are eligible or approved for the forgiveness program.
Paid By Someone Else
A student loan someone else pays can be left out of a Fannie Mae loan with the most recent 12 months of canceled checks or bank statements from that person.
Pay Off With A Refinance
A Fannie Mae student loan cash-out refinance pays at least one student loan you owe in full at closing, directly to the servicer, with the cash-out pricing adjustment waived.
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Frequently Asked Questions
Straight answers about student loans and qualifying for a mortgage.
Yes. Student loans count as monthly debt. How much each one counts depends on the loan program and your payment status.
On a Fannie Mae loan, the lender can verify the $0 payment and qualify you with $0. FHA and Freddie Mac use 0.5% of the balance instead.
When the credit report shows no payment, a Fannie Mae loan counts them at 1% of the balance or a payment based on the repayment terms. On FHA, every student loan counts, using 0.5% of the balance when the credit report shows zero. At least one VA program leaves out a loan deferred at least 12 months past closing when you provide written proof of the deferment.
Yes, on FHA, with written proof the balance was forgiven, canceled, discharged, or paid in full. Freddie Mac can also leave out a loan with 10 or fewer payments left before the full balance is forgiven, if you are eligible or approved for the forgiveness program.
On a Fannie Mae loan they can be left out with the most recent 12 months of canceled checks or bank statements from the person paying, showing no late payments. This does not apply if the person paying is part of the sale, such as the seller or real estate agent.
Yes. A Fannie Mae student loan cash-out refinance pays at least one student loan you owe in full at closing, directly to the servicer. Partial payoffs are not allowed.
Not always. At least one VA program does not count a payment when you show in writing that the loan is deferred at least 12 months past closing.
Find out what you qualify for
Tell us about your student loans and your income, and we will show you which loan programs count them in your favor.
Get Pre-QualifiedLoan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Draw requirements and variable rate terms apply. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.