Hi guys! I'm a real estate broker in the Chicagoland area- can any lenders offer some insight on how to help first time home buyers qualify for the FHA program despite having student loan debt. A lot of my current lender referrals are not knowledgeable on how to help buyers get qualified if they look at 1% of the student repayment and therefor impacts their overall DTI.. if any lender has some insight I'd really appreciate it and I'd love to build a relationship for referrals in the future.
Hello @Melanie E. Miller , I do my fair share of down payment assistance because I like to help everyone out. With that being said, there is no way to get around the 1% rule with student loan monthly payments affecting their debt to income ratio on an FHA loan.
Conventional down payment assistance is the only program that allows you to take a lesser payment due to being on a fully amortized payment plan or income based repayment plan in lieu of 1% as per Fannie Mae and Freddie Mac. Down payment assistance for Veterans also follows their own rule of thumb that is not in line with FHA. I hope this helps. It's not the lenders fault or them being not being knowledgeable. They seem to know what their talking about.