Monday, February 17, 2014

Student Loans an Kentucky USDA Rural Development Mortgage Loans Guidelines

Student Loans and Kentucky USDA Rural Development Mortgage Loans Guidelines

Kentucky FHA Loans and Deferred Student Loans

Deferred student loans with a deferment period of 12 months from the Note date may be excluded
on Kentucky FHA Loans and not counted in debt to income ratio.

Kentucky Student Loans: Conventional/Fixed Payment 

Student loans are long term debt obligations that must be
included in the debt ratio per section 1980.345(c)(1).
Student loans that are currently in repayment must have documentation to verify the
current payment due (e.g. letter from a loan services, online account verification's, or
other official written documentation). The credit report alone is not acceptable
documentation. Verification are valid for 120 days, 180 days for new construction.
A fixed loan payment will not adjust over the repayment term. The payment listed
on the documentation may be used for debt ratios.

√ √ √ Kentucky Student Loans: Graduated Payments for Ky USDA Loans

Graduated repayment plans typically start with low payments and then adjust every
12 months or more. Regardless of when payment adjustments occur, lenders must
utilize the highest payment documented on the repayment plan agreement in debt

√ √ √ Kentucky Student Loans: Deferred for Ky USDA Loans

Deferred student loans that are not in repayment status may use an estimated
payment of 1% of the loan balance reflected on the credit report, or a verified fixed
payment provided by the loan servicer to document the payment that will be due
once deferment ends.

√ √ √Kentucky Student Loans: Income Based Repayment (IBR) for KY USDA Loans

IBR amounts are not fixed payments and may increase
IBR payments of $0 are not eligible to be used in the debt ratio. The applicant must
provide documentation of the IBR payment plan from the loan servicer. The
following apply:
1. If the IBR payment is less than $100 and 1 percent of the total loan balance
is more than $100, a minimum payment of $100 must be included in the
debt ratios.
2. If the IBR payment is less than $100, and 1 percent of the total loan
balance is less than $100, a minimum payment of 1% of the loan balance
must be included in the debt ratios.
3. If the current IBR payment is over $100, use that payment amount in the
debt ratios.

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