Student Loan Inquiry

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    According to the handbook debt over 2-years old will not be factored in your debt to income ratio.

    Why is this not the case for “private” student loans? These loans are not governed like other federal student loans.

    Also, why if you’re on IBR plan and have a $0 payment, is NACA requiring a different payment? If the federal government has determined that you qualify for a $0 payment.

    Thanks for your help with these questions



    I cant answer the part about the student loan being private but I can tell you that all lenders to include NACA will require you to be in repayment status on your loan before you can get financed for a mtg. Most lenders will count the IBR payment as at least 3% of your loan amount. In my case if I would have stayed in IBR I would have had an estimated payment of $4,500.00 but instead I knew to go into a repayment plan prior to being submitted. So I am paying $274.00 a month. That is a huge difference in my income to debt ratio. I would imagine that as with all lenders Student loans have a higher chance of wage garnishment which could cause you to loose your house. I hope this helps.


    Yes that helps and I did convert my loans to repayment.

    If I could just get the “rule/clarity” about the other question it will all make sense.

    Thanks again


    @goldiebrown8043 Hang in there. I know it can be stressful. I just moved into my home 3 weeks ago and it was worth every min of stress.It literally took me 5 months from my homebuyer class until close. And part of that time was 5 weeks waiting for the sellers to move so I could close. However, in the thick of it that times seemed like forever.


    Hello goldiebrown8043,

    Even though private student loans don’t fall under all of the same guidelines as federal ones, the fact of the matter is that they WILL be repaid at some point. Just like the federally backed loans, you can’t even get them discharged in bankruptcy. So since they will be paid back in the foreseeable future and will affect your affordability, a zero payment figure is not acceptable.

    Furthermore, you seem to be misinterpreting the two year rule. That rule applies to judgements and collections activities, not active debts.

    In short, the student loan repayment is factored into your budget now so that you don’t suddenly find yourself with an unaffordable mortgage payment when the payments do begin.

    Tim Trumble
    Online Operations, NACA

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