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    I have my appt with my MC in June. I have student loans that are on an IBR payment plan. I am not making payments currently though because Great Lakes automatically placed my account in forbearance until September due to COVID. However, I’ll be returning to school this summer, meaning my loans will be in deferment due to me being a student. How does that work when it comes to getting qualified. How will my student loan payment be calculated? Will it still go by the IBR payment that’s already in place?


    You need to have your loan company write a letter on company letterhead stating what your payment would be if hypothetically you had to start paying today.

    IBRs and any other deferrerd, zero payment is OK…BUT you cannot factor a zero payment into your affordability. It must be worst case scenario based on your current financial outlook today. SO if you had to make payments today what can you afford while paying your student loans. The bank knows sometime in the future you will have to start paying and there is no guarantee you will be able to afford your mortgage and your student loans so they approve you on what you can do right now with the maximum possible payments coming out of your bank. That way you will at least for a short period of time have a cushion built in.

    • This reply was modified 2 years, 3 months ago by Nelsont.

    So, if NACA accepts IBR payments as long as they are not zero, would I be able to get my student loan company to provide a letter stating what my payment would be if I were paying and on another IBR plan? Because that will be the same route I take once I finish this program because it’s financially more feasible.


    You don’t have to change anything if you don’t want to. And in fact the fewer changes the better because there is less to review and less confusion to be had. Same with bank accounts. But I do no think it would work for a hypothetical switch. Underwriters do not connect dots. The look at your current picture and current accounts. They need data and explanations for your current situation. I would imagine if you hand in a letter for a hypothetical payment for a hypothetical switch of loan type then you will either get conditions to provide documentation for that loan (which you don’t have) or they will flat out ignore it and continue to issue conditions for the current IBR as if they aren’t reading the hypothetical switch part. That’s just my guess. From what I’ve seen you need to talk in YES and NO and HERE IS EXACTLY WHAT YOU ASK FOR. Anything else just confuses the situation.

    Whatever you do you need to have an official statement for everything that is currently zero that says what your monthly obligation would be today if it were not zero.


    Thank you for that info! I was worrying about whether me going back to school was a big mistake. I am glad that NACA will accept IBR payments though because that doesn’t negatively affect my DTI as much as the standard payments would. I guess I should wait until the program officially starts (5/4) and closer to my MC appt (6/9) to get that letter?


    Hello a3-owning2020,

    A letter from the servicer stating what your non-zero IBR payment would be is the preferred method for factoring your student loan into your budget and affordability.

    As you noted, NACA cannot accept a zero payment figure for student loan payments. The simple reason for this is that there is no getting around repaying a student loan, even with a bankruptcy. We realize however, that the “standard” 1% payment is an unrealistically large figure for virtually everyone.

    If you are already in an active IBR, an income-based non-zero payment figure such as the REPAYE program is acceptable. You will need to provide a copy of the letter from the creditor stating the payment amount.

    UPDATE: The REPAYE program is no longer acceptable by our lender.

    The only things we cannot accept are zero-dollar payments, deferred payments, forbearance payments (such as interest-only) and graduated payment plans.

    In short, as long as you can properly document it, the figure you provide should be acceptable. It will be figured into your monthly obligations and will become part of your DTI ratio.

    Should all else fail, we can use the figure from the government’s online income-based student loan repayment calculator ( as a last resort.

    I hope that clarifies things.

    Tim Trumble
    Online Operations, NACA

    • This reply was modified 1 year, 4 months ago by TTrumble.

    Sorry to bring up an old topic… if my repayment plan has me at zero but I pay more would NACA accept the amount I pay or deny it since the lender has the required payment at $0.


    You would just need to call your Loan servicer and ask them for an estimate of what your payment would be if it wasn’t at $0. Like mine are deferred because I’m in school and I was told to get a letter starting how much I would be paying if they weren’t. NACA accepts any payment except $0.


    @Ttrumble, our ATD is in November and we wanted to be prepared as much as possible. I have been getting conflicting information about the payment plan that NACA accepts. I was told by some members that their REPAYE was accepted, some REPAYE were not accepted even with non $0 payment, another counselor also mentioned that NACA only accepts IBR and ICR. After verifying the info on homebuyers workshop workbook, page 33, the acceptable payment plans are approved Income Based Repayment plan, standard payment, extended fixed payments, largest graduated payment. Unfortunately, it sounds like the term IBR is being used for the umbrella Income Driven Repayment (IDR) plan and it is causing a lot of confusion and immediate rejection for some who are in IDR-REPAYE. Unfortunately not all/everyone is eligible for IBR. For example, in our situation, IDR-REPAYE gives us the lowest possible monthly payment of $650 vs. an IDR-IBR that we are not eligible for because it is more than our standard 1% payment. Between my husband and I, our standard 1% payment is almost $1500.00. I have been unemployed for the last 5 years, and if this is the case, it will be impossible to afford our mortgage and standard student loan payments. Being on an income driven repayment plan (IDR) makes is doable. Please clarify. Thank you!

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