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FHA Announces Updates to Student Loan Debt Policies Allowing Greater Access to Mortgage Credit



FHA Announces Updates to Student Loan Debt Policies Allowing Greater Access to Mortgage Credit

On June 18, 2021, the Federal Housing Administration (FHA) announced the publication of Mortgagee Letter (ML) 2021-13, Student Loan Payment Calculation of Monthly Obligation. This ML updates the monthly mortgage payment calculation for borrowers with student loan debt who apply for FHA-insured mortgages. This updated guidance will provide greater access to mortgage credit for those, including people of color as well as those in the 25 to 49 years old age group, who are traditionally burdened with student loan debt. Read today’s Press Release.


This updated policy amplifies FHA’s commitment to enhancing its programs by breaking down longstanding barriers to affordable homeownership opportunities, including student loan debt, and will:


·         Further HUD’s mission of providing access to mortgage credit while ensuring borrowers maintain a long-term ability to repay their debt.

·         Remove potential roadblocks for borrowers making student loan payments that are struggling to qualify for an FHA-insured mortgage due to their debt-to-income (DTI) ratios being based on an implied repayment, rather than on an actual monthly repayment amount(s).

·         Revise the way in which FHA calculates monthly student loan liabilities for borrowers making payments and those without payments currently due when determining DTI ratios for qualifying potential borrowers for FHA-insured financing.

·         Align FHA standards to current industry standards and better reflect the myriad of student loan repayment alternatives offered through the U.S. Department of Education.

 The guidance in the ML applies to all FHA-insured Title II forward mortgage programs except non-credit qualifying streamline refinances, which do not require evaluation of the borrower’s debts.


Mortgagees may begin implementing this policy guidance immediately; however, it must be implemented for all mortgages with case numbers assigned on or after August 16, 2021.


At the core of FHA’s mission is the belief that that every person deserves the chance to live with security, dignity, and hope in a place they can call their own. Removing student loan debt barriers is only one part of HUD’s commitment to do everything it can to help advance affordable homeownership opportunities in the U.S., particularly in communities of color and other underserved communities.


To ask a question please email: [email protected]



HUD Hosts Industry-Wide Discussion on Advancing Racial Equity in Homeownership on June 24, 2021

On Thursday, June 24, 2021 at 2:00 PM to 3:30 PM Eastern time, the Department of Housing and Urban Development’s (HUD) Office of Housing Counseling and the Office of Single Family Housing are hosting an industry-wide discussion on Advancing Racial Equity in Homeownership. This National Homeownership Month Event begins with a special video presentation by HUD Secretary Marcia Fudge. Afterwards, there will be a live, virtual discussion offering participants an opportunity to hear from housing counseling agencies, advocacy groups, academia, and HUD. Register today to reserve your place!

June is National Homeownership Month please visit HUD’s website to learn more. 

There are just 43 days remaining until the HUD housing counselor certification final compliance date on August 01, 2021. Don’t delay, certify today!

Certification Frequently Asked Questions (FAQs): Do you have questions about HUD housing counselor certification?  Check out the Office of Housing Counseling’s FAQs on certification. They are organized into categories for handy keyword search. Topics include “Who needs to be certified?” or “What are the Certification Exam and Training offerings?”  For more information please ask HUD a question.

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