Howdy!

Lenders are telling me that my student loans are hurting my DTI.

https://www.usnews.com/education/blogs/student-loan-ranger/articles/2017-05-03/new-fannie-mae-rules-help-home-buyers-owners

According to this article and a couple of other articles, the lenders no longer have to calculate the repayment at 1%. (I'm unsure of the correct terminology). Is there any truth to this article?

My husband and I are looking to purchase our first home, but we keep hitting road blocks due to our student loans.

It really depends on what kind of loan you want to do.

FHA guidelines say you use whatever number is greater between the payment on the credit report, or 1% of the balance.

*there is a some fine print that if your current payment will fully amortize the note they'll use it if it's less than 1%, but that's typically lender discretion*

Fannie Mae used to be the same as FHA but a few months ago they came out and said they'll use whatever's on the credit report, regardless of amortization. However, if the loans are in deferment and no payments listed on the credit report they'll take 1% of the balance.

Exactly what Fancy Said. Essentially, it just depends on which loan program you go with.

FHA:
Regardless of the payment status, the Mortgagee must use either: the greater of: 1 percent of the outstanding balance on the loan; or the monthly payment reported on the Borrower's credit report; or the actual documented payment, provided the payment will fully amortize the loan over its term.

Conventional:
If a monthly payment is provided on the credit report, the lender may use that amount as the monthly payment for qualifying purposes.
If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment (which may be the case for deferred loans or loans in forbearance), the lender must calculate a qualifying monthly payment using one of the options below:

• 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or
• a fully amortizing payment using the documented loan repayment terms.

UNLESS somebody else makes your student loan payments for you...

http://www.fanniemae.com/portal/media/financial-news/2017/student-loan-debt-6546.html