VA and Student Loans

Anonymous — Tue, 14 Feb 2017 10:46:38 GMT

Ø VA Circular 26-17-02 – Student Loans. Please review and familiarize yourself with the changes.
o Deferred Student Loans – If a lender was provided written evidence that the payment is or will be deferred for at least 12 months beyond the note date, a monthly payment does not need to be considered.
o Loans in Repayment or Deferred less than 12 months after the Note date – Calculate the anticipated monthly obligation ( threshold payment ) on the Loan Analysis and then use the payment established in either 1. The lender must use the payment reported on the credit report for each student loan if it is greater than the calculated threshold payment above; OR 2. If the payment reported on the credit report is less than the threshold payment calculation, the file must have a statement from the student loan servicer that reflects the actual loan terms and payments for each loan. This documentation from the student loan servicer must be dated within 60 days of the Note date. Loan ‘estimates’ as printed online would not be acceptable.
o The threshold payment is the outstanding balance of the student loan times 5% divided by 12 months is considered the anticipated monthly payment. i.e. $25,000 loan x 5% = $1250 / 12 months = $104.17/month.

My mortgage age lender sent me the above info. I am freaking out about my student loans. I currently have an IBR payment of $0. They will deferred when I purchase at the end of the year. I currently have $80k. If I did my calculations right, they won't take 1% or 2% of the outstanding balance as they have in the past, but instead calculate it as $80,000 x 5% / 12. Is that correct?

Re: VA and Student Loans

Anonymous — Tue, 14 Feb 2017 12:51:23 GMT

$333 a month sounds about right. $80,000 is a lot money and will take forever to pay off at that amount.

Re: VA and Student Loans

ShanetheMortgageMan — Tue, 14 Feb 2017 21:15:10 GMT

This new circular has some confusing verbiage, but this week I've confirmed with VA that they will use whatever payment the student loan servicer verifies. So if you have a monthly statement from the student loan servicer showing your payment is $0 because it's in an income based repayment, then a VA lender should use $0 as the qualifying payment amount.

I made a post about this awhile back at http://ficoforums.myfico.com/t5/Mortgage-Loans/New-VA-student-loan-guidelines/td-p/4847504

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VA and Student Loans

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