Thursday, April 21, 2016

FHA Revises Student Loan Payment Calculation for Kentucky FHA Loans in 2016


FHA Revises Student Loan Payment Calculation for Kentucky FHA Loans in 2016




The Federal Housing Administration (FHA) revised guidelines for FHA Kentucky mortgage lenders when calculating student loan obligations for use in borrowers' debt-to-income ratio calculations. Consistent with industry practice, the revised guidance allows the same calculation criteria to be applied regardless of student loan payment plan type, such as income-based payment plans, or deferral status. Lenders may begin using the new guidance immediately, but must use the guidance for all case numbers assigned on or after Thursday, June 30, 2016.

The new  Kentucky FHA Mortgage guideline for student loans requires the lender to utilize 1 percent of the outstanding balance to establish the monthly payment or use the actual documented payment when the payment is fully amortized over the loan's term.