There have been several posters recently who have mentioned Federally Guaranteed Student Loans and whether or not the count towards debt ratio. The answers to these questions have been all over the board as far as accuracy. Here is the basic correct information:
1) If you are going for a conforming mortgage, one that conforms to either Fannie Mae or Freddie Mac guidelines, Federally Guaranteed Student Loans will count towards your debt ratio whether you are in repayment or in deferment. This is in the guidelines and while there may be conforming lenders or two that will not count them, they can not sell those loans as part of a Fannie Mae or Freddie Mac guaranteed MBS (Mortgage Backed Security). The lender would have to portfolio them.
2) If you are going for an FHA/VA/USDA Rural Development then as long as you can document that the loan(s) will be in deferment/forbearance for at least the next 12 months after closing they are not supposed to be counted towards debt ratio.
3) If you are going for a nonconforming/subprime mortgage each lender will have their own rules. Generally the rules will be in line with FHA. However, some lenders will require that 2 yrs deferment/forbearance be documented otherwise the loans will be counted.
While it has been decided amongst the Mods and Leads here in the Mortgage Forum not to discuss credit repair or issues and to direct posters to the appropriate forum, this is not a credit repair issue.
Defaulted Federally Guaranteed Student Loans
If you are attempting to obtain any Federally backed Mortgage, FHA/VA/USDA, a defaulted Federally Guaranteed Student Loan will automatically disqualify you. There is no statute of limitations on defaulted student loans. This is true no matter what type of Federally Guaranteed Student Loan you have. When a government backed/guaranteed loan of any type goes into default, it is listed in CAIVRS until the loan is satisfied. All FHA/VA/USDA mortgage applications check CAIVRS for defaulted loans. It does not matter whether the defaulted loan is listed on a credit report or not. It will be in CAIVRS.
CAIVRS stands for: Credit Alert Interactive Voice Response System and is accessed on HUD's website. CAIVRS is for professionals only. CAIVRS was developed by the Department of Housing and Urban Development in June 1987 as a shared database of defaulted Federal debtors, and enables processors of applications for Federal credit benefit to identify individuals who are in default or have had claims paid on direct or guaranteed Federal loans, or are delinquent or other debts owed to Federal agencies.
Student Loan FAQ
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