Student Loan Calculations

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    Hello All,

    How do NACA underwriters calculate student loans? Do they use 1% rule that Traditional Lenders use or do they go by the payment that appears on the credit report?

    I know that the 1% rule is fairly new and having student loan debt while trying to purchase a house can be a hassle these days which is why I’m asking

    I found this verbiage in the NACA Handbook does this still hold true ?

    For student loans, your Housing Counselor will work with you to determine your monthly student loan payment. If your credit report shows a monthly payment that payment can be used or, if you disagree, you can provide proof of the actual monthly payment. If your credit report does not show a payment (typically when deferred or in forbearance) then the servicer for the loans must produce a statement with the loan account numbers listing the fixed payment for which you are eligible once the student loans are out of
    deferment or forbearance.

    Thanks in advance



    Hello Cali_Cool_Guy,

    Yes, the information in your Home Buyer’s workbook is still correct. In our opinion, that “1% rule” is a disaster waiting to happen as it is nothing more than a shot-in-the-dark guess at a payment amount, and will result in an inaccurate budget and affordability amount.

    One of the biggest reasons the NACA program works as well as it does is its uncompromising detail in providing an accurate file for our members.

    If you or anyone want to verify that the information in your workbook is up to date, you can always find and download the very latest version of the workbook at

    Tim Trumble
    Online Operations, NACA

    • This reply was modified 5 years, 6 months ago by TTrumble.

    Thanks Tim,

    As always your insight proves invaluable. I totally agree with you regarding the 1% rule. This rule severely hurts young professionals/young families such as us.

    I believe that the rule is going to be changed sooner than later, but at that point interest rates maybe in the double digits by then.

    It just another reason why NACA is truly an advocate for the consumer and has the best mortgage deal in America .



    My MC told me that if I provided a letter that showed how much my income based repayment amount it is, that they would use that and not the 1%. If they used 1% for me, I would not be able to buy a home.


    CANDRAnATL, My MC informed me of the same thing. So I provided a detailed statement, and since I am currently in repayment under one of the plans based on my income, they will use that amount vs. the traditional lender 1%. Which for me would not make owning a home affordable.



    Thanks @CANDRAnATL and @Thomas 75

    It’s good to get confirmation from people you have gone/going through the process.

    How did you guys get the statement? Where there a template/form/statement that you were able to print out from your student loan servicer ? Or did you call-in and speak to someone who faxed/email you a statement specific to your case?




    The letter I showed is the letter I received once my loans consolidated and they told me my payment amount.

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