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Conventional Loan Question: Does Fannie Mae accept income based repayment (IBR) plans for
student loans?

· Conventional Loan,DTI,Student Loans

No. 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 per the Selling Guide.

 

Hope that helps. Feel free to contact me if you have any questions at 949.667.2887 or info@hightouchlending.com.

- Brian Nguyen is a senior loan consultant (NMLS 659743) who learned more about this stuff than he ever intended to. The opinions expressed here are solely his own.

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