FHA loans · HUD Handbook 4000.1FHA student loans and other debts: what counts in the debt-to-income ratio

FHA counts all of a borrower's student loans, whatever the payment type or status. The lender uses the payment on the credit report or the actual documented payment when it is above zero, and 0.5% of the outstanding balance when the credit report shows a $0 payment; a loan documented as forgiven, canceled, discharged or paid in full can be left out. Using a payment lower than the credit report shows takes written documentation from the creditor or servicer. Revolving accounts use the payment on the credit report, or the current statement, or 5% of the balance. Other deferred debts and accounts in forbearance count too – the actual payment if available, otherwise the terms or 5% of the balance. Thirty-day accounts are left out only if paid in full every month for the past 12 months; with a late payment, 5% of the balance counts. Child support and maintenance always count, from the greater of the decree amount or the garnishment; alimony counts unless income was reduced by it. Federal debt on a repayment plan counts. And when the borrower lives in – or the home is in – a community property state, the non-borrowing spouse's debts count in the ratios unless state law excludes them, though that spouse's credit history is not a reason to deny the loan.