Biden Makes It Easier for Student Loan Borrowers to Get a Mortgage -

"The new rule supported by the Biden administration proposed that FHA lenders drop the requirement to calculate student loan payments at 1%."

Why this is important: As part of the application and approval process for mortgages, lenders review the overall debt burden of an applicant (or applicants). Lending rules for the Federal Housing Authority required that the debt load – referred to as the debt-to-income ratio – total 43 percent or less of monthly income. The former rules also required specific calculations for student loans as part of the debt-to-income ratio, regardless of the actual monthly payment the borrower was making on their student loans. This calculation hurt applicants with high student loan balances. The Biden administration has proposed that the calculation use the actual student loan payment to determine mortgage loan eligibility, and experts believe this will make is possible for more individuals to qualify for FHA loans. Companies offering FHA-backed loans should pay attention to any guidance issued by the FHA with respect to rule changes to DTI calculations and particularly as they relate to the impact of student loans on those calculations.