Another Student Loan Question

[sherizel73]

The rules on mortgages and student loans are so confusing.  I'm finding a lot of conflicting information and even lenders don't seem to know what the rules are.  I'm checking to see if anyone here has any experience with a similar situation.  I know starting 6/30, FHA loans require taking 1% of the balance of the loan to figure out monthly payment regardless of whether the loan is deferred, in repayment, etc...  What about conventional loans, will they look at the payment documented on the credit report or will they also have to take 1%.  

My loan is in graduated repayment.  I have been paying for years and my payments continue to increase gradually as time goes on.  My payment is documented on my credit report but it's much less than 1% of the total balance.  When calculating DTI for a conventional loan, will the lender use the payment on my credit report or will they calculate 1% of the balance of the loan?   Thanks! 

[Anonymous]

Conventional loans will take 1% of the balance or the actual payment, whichever is higher. They can take a payment amount of less than 1% if that payment fully amortizes the loan. Here is the word for word explanation from Fannie Mae's Selling Guide:

B3-6-05: Monthly Debt Obligations (05/31/2016) Student Loans

For all student loans, whether deferred, in forbearance, or in repayment (not deferred), the lender must include a monthly payment in the borrower’s recurring monthly debt obligation when qualifying the borrower. 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.

[sherizel73]

Thank you for the information.  I'm still not clear, is a graduated repayment considered a calculated payment that will fully amortize the loan?  Trying to figure out what the difference is between the two items below. I'm assuming the first one is the standard repayment and the second is for income sensitive/graduated repayment.  Either way is good because it's less than the 1%. 

- 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; 

[Anonymous]

It is my understanding that a graduated payment plan  will not count the same way as the standard or extended standard as the payment amount will change over time and the amount you pay today will not fully amortize the loan. I am on an extended standard plan and doing that means I will make the same payment for the next however many years until the loan is paid off. Graduated payments will increase so today's $300 payment may be $700 in 5 years for example and today's payment will change over time.