That is complete BS!! this is an email I received DIRECTLY from the FHA! NOT a lender who does FHA loans. Tell them to get off their butts and research!!
Dear Tavery ,
Thank you for contacting the FHA Resource Center. A response to your inquiry is provided below. If the information does not fully address your question, please forward this email (do not reply) to email@example.com, and provide additional information so that we may better serve you. You may also speak directly to a customer service representative by calling 1-800-CALL-FHA (1-800-225-5342) or visit our online knowledge base at www.hud.gov/answers, 24 hours/7 days a week.
Your question was regarding Student loan CAIVRS .
Please see below the following excerpt from the HB 4000.1 regarding student loans. The highlighted portion best pertains to your question.
4000.1 II. A. 4. iv. (H) Student Loans (TOTAL)
Student Loan refers to liabilities incurred for educational purposes.
The Mortgagee must include all Student Loans in the Borrower’s liabilities, regardless of the payment type or status of payments.
(3) Required Documentation
If the payment used for the monthly obligation is:
less than 1 percent of the outstanding balance reported on the Borrower’s credit report; and
less than the monthly payment reported on the Borrower’s credit report;
the Mortgagee must obtain written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor.
(4) Calculation of Monthly Obligation
Regardless of the payment status, the Mortgagee must use either:
the greater of:
1 percent of the outstanding balance on the loan; or
the monthly payment reported on the Borrower’s credit report; or
the actual documented payment, provided the payment will fully amortize the loan over its term.
If the repayment plan will fully amortize the loan over its term, then yes, it can be used.
DE underwriters are expected to exercise due diligence in their review of the case file and apply basic underwriting criteria to their specific situation and make the appropriate determination.
FHA Customer Service Team
When we went to buy our house, I was a year into my rehab and we wanted to do an FHA, our mortgage broker gave it to us straight and said flat out leave me of the loan or would risk not being approved or having to go conventional with a higher dp. He said let my loans be in repayment a bit longer and refinance back into an FHA adding me on. Doing that worked, we ended with a lower interest rate and payments, we did that exactly at the 1 year mark. THe only way that hurts more then helps is if the person with the bulk of the income is the defaulter. If any of you find yourself thinking you have a default and it isn't a private student loan check https://www.nslds.ed.gov/nslds/nslds_SA/ and click on Financial Aid Review, that will tell you the balance and who the current servicer is to try to get it rehabbed or consolidated.