Do We Have to Count Student Loans for an FHA Mortgage if I Am in Forbearance?

Do We Have to Count Student Loans for an FHA Mortgage if I Am in Forbearance?

Shorter Answer:

Yes, we still have to count your student loan debt against you for debt to income purposes if your loans are in repayment or forbearance.

Longer Answer:

Are you applying for an FHA mortgage and wondering if your student loans in forbearance will affect your approval? You’re not alone. With millions of Americans carrying student loan debt, understanding how these loans impact your FHA home loan eligibility is crucial. In this article, we’ll break down everything you need to know about student loans, forbearance, and FHA mortgage requirements in 2025.

What Is an FHA Mortgage?

An FHA mortgage is a home loan backed by the Federal Housing Administration, designed to help first-time homebuyers and those with lower credit scores qualify for a mortgage. FHA loans are popular because they require lower down payments and have more flexible credit requirements compared to conventional loans.

How Do Student Loans Affect FHA Mortgage Approval?

When you apply for an FHA loan, lenders must evaluate your debt-to-income ratio (DTI). This ratio compares your monthly debt payments to your gross monthly income. Student loans—even if they are in forbearance or deferred—are included in this calculation.

Do Student Loans in Forbearance Count for FHA Loans?

Yes, student loans in forbearance must be counted when applying for an FHA mortgage. According to the latest FHA guidelines (HUD Handbook 4000.1), lenders are required to include student loan payments in your DTI calculation, even if your loans are in forbearance, deferment, or you are not currently making payments.

FHA Student Loan Guidelines 2025

  • If your student loan is in forbearance or deferment: The lender must use either .5% of the outstanding loan balance or the actual payment amount (if it is fully amortizing and documented in your file), whichever is greater.
  • If your payment is $0 due to forbearance: The lender will still use .5% of the loan balance as your monthly payment for DTI purposes, unless your loan servicer provides documentation of a lower, fully amortizing payment.

Example:
If you owe $30,000 in student loans and are in forbearance, the lender will count $150/month (.5% of $30,000) as your monthly student loan payment, even if you are not currently required to pay anything.

Why Does the FHA Count Student Loans in Forbearance?

The FHA includes student loans in forbearance in your DTI calculation to ensure you can afford your mortgage payments once your student loan payments resume. This protects both you and the lender from future financial hardship.

How to Improve Your Chances of FHA Loan Approval

  1. Lower Your DTI: Pay down other debts or increase your income to improve your debt-to-income ratio.
  2. Provide Documentation: If you have a lower, fully amortizing payment plan, provide official documentation from your loan servicer.
  3. Consider Loan Consolidation or Income-Driven Repayment: These options may lower your calculated monthly payment, but you must provide proof to your lender.

Frequently Asked Questions

Can I Get an FHA Loan with Student Loans in Forbearance?

Yes, you can qualify for an FHA loan with student loans in forbearance, but the lender will include a calculated payment in your DTI ratio.

What If My Student Loan Payment Is $0?

If your payment is $0 due to forbearance or deferment, the lender will use .5% of your loan balance as the monthly payment for qualification purposes.

Do All Lenders Follow the Same FHA Student Loan Guidelines?

Yes, all FHA-approved lenders must follow HUD’s guidelines regarding student loans and forbearance.

Conculsion

If you’re planning to buy a home with an FHA loan and have student loans in forbearance, it’s important to understand how these loans will impact your mortgage approval. Consult with an FHA-approved lender to review your specific situation and explore your options.


These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact me.

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