{"id":2504,"date":"2017-05-02T10:33:58","date_gmt":"2017-05-02T15:33:58","guid":{"rendered":"https:\/\/riverbankfinance.com\/blog\/?p=2504"},"modified":"2017-05-02T12:23:46","modified_gmt":"2017-05-02T17:23:46","slug":"fannie-mae-relaxes-guidelines-for-student-loan-debt","status":"publish","type":"post","link":"https:\/\/riverbankfinance.com\/blog\/fannie-mae-relaxes-guidelines-for-student-loan-debt\/","title":{"rendered":"Fannie Mae Relaxes Guidelines for Student Loan Debt"},"content":{"rendered":"

For homebuyers who have been denied for a mortgage due to student loan payments, relief may be in sight. As of April 25th 2017, Fannie Mae is relaxing rules on the amount of student loan debt a mortgage seeker can hold for Conventional mortgages<\/a>. <\/span><\/p>\n

Previously, Fannie Mae guidelines required lenders to count at least 1% of their student loan debt as a payment in order to qualify for a home loan. According to Fannie Mae, seven in every 10 graduates of public and non-profit colleges have student loan debt. The result is that 44\u00a0million Americans have student loans they are paying off.\u00a0According to Fannie Mae\u2019s press release, the average amount of student loan debt for one graduate is $34,000. Based on the previous calculations this would prevent many college graduates from becoming homeowners.<\/span><\/p>\n

Fannie Mae changed the rules so that lenders can look at repayment plans that are INCOME-BASED instead of the 1% rule.<\/span><\/p>\n

RELATED ARTICLE: Buying a Home with Student Loan Debt<\/a><\/p>\n

Income Based Repayment Plans for Student Loans<\/h2>\n

Going back to that average of $34,000, a graduate paying off their student loans the old way would have to pay $340 per month, or 1% of the loan, to be approved for a mortgage. Depending on the kind of job they have and their other expense needs, that may not be reasonable. So now, lenders can see that they\u00a0are paying what they can AFFORD based on their income, which can be LOWER than the 1% without hurting their odds of approval. <\/span><\/p>\n

This is good news for college graduates who still have student loans and are looking to get approved for a mortgage. If you\u2019d like to start that process right now complete our online mortgage application<\/a>.<\/span><\/p>\n

Good News for College Loan Debt Consolidation:<\/h2>\n

In addition to this news, home owners who are seeking to reduce their overall debt can refinance their home loan at a lower rate, cash it out, and pay off their student loans with the cash that\u2019s available. According to Fannie Mae, the changes mean:<\/span><\/p>\n