Page 30 - AreaNewsletters "July 2020" issue

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payment terms.
Freddie Mac guidelines are slightly different. If your student loans are in repayment, deferment or forbearance, when cal- culating the monthly student loan payment for the DTI ratio: • If the monthly student loan payment amount is greater than
0, the lender may use the monthly payment amount reported on your credit report or other student loan documentation in the lender’s le, or
• If the student loan monthly payment amount reported on your credit report is 0, the lender may use 0.5% of the outstanding balance, as reported on the credit report.
program.
If you are purchasing a house using an FHA loan, the lender must include all student loans in your liabilities, regardless of the payment type or status of payments when calculating your DTI ratio.
If the student loan payment used for the monthly obligation is: • less than 1% of the outstanding balance reported on your
credit report, and
• less than the monthly payment reported on your credit report; The lender must obtain written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor. Regardless of the payment status, the lender must use the greater of:
• 1% of the outstanding balance on the student loan;
For student loan forgiveness, cancellation, discharge and em- ployment-contingent repayment programs, payment may be excluded from the monthly DTI ratio if documentation indicates:
• The loan has fewer than 10 monthly payments remaining, or • • Monthly payment on the student loan is deferred or in forbear- •
ance. At the end of the deferment or forbearance period the
full balance of your student loan will be forgiven, canceled, • discharged or paid if in an employment-contingent repayment program. And, •
• You currently meet requirements for student loan forgiveness, cancellation, discharge or employment-contingent repayment
or the monthly payment reported on your credit report; or The actual documented payment, provided the payment will fully amortize the student loan over its term.
If a student loan payment amount is listed on credit, the listed monthly payment is used when calculating DTI.
If there is no payment amount listed on credit, 1% of the outstanding student loan balance as listed on your credit report will be used. If you do not qualify with the 1%, then
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July 2020 • Castle Rock “AreaNewsletters” 30
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