Innovations Help Borrowers Pay Down Student Debt and Overcome Debt Related Obstacles When Buying a
Home
PR Newswire
WASHINGTON, April 25, 2017
WASHINGTON, April 25, 2017 /PRNewswire/ -- Fannie Mae (OTC
Bulletin Board: FNMA) announced new policies that will help more borrowers with student debt qualify for a home loan. These
innovations address challenges and obstacles to homeownership due to a significant increase in student loan debt over the past
decade and provide access to credit for qualified borrowers. The new solutions give homeowners the opportunity to pay down
student debt with a mortgage refinance, allow borrowers to exclude non-mortgage debt paid by others as part of the loan
application process, and make it more likely for borrowers with student debt to qualify for a mortgage loan by allowing lenders
to accept student debt payments included on credit reports.
"We understand the significant role that a monthly student loan payment plays in a potential home buyer's consideration to
take on a mortgage, and we want to be a part of the solution," said Jonathan Lawless, Vice
President of Customer Solutions, Fannie Mae. "These new policies provide three flexible payment solutions to future and current
homeowners and, in turn, allow lenders to serve more borrowers."
Innovative Solutions for Making Homeownership Affordable for Borrowers with Student Debt
Because there is rarely a "one size fits all" approach to this issue, the policies announced today provide options to
borrowers based on their individual circumstances:
- Student Loan Cash-Out Refinance: Offers homeowners the flexibility to pay off high interest rate student debt while
potentially refinancing to a lower mortgage interest rate.
- Debt Paid by Others: Widens borrower eligibility to qualify for a home loan by excluding from the borrower's
debt-to-income ratio non-mortgage debt, such as credit cards, auto loans, and student loans, paid by someone else.
- Student Debt Payment Calculation: Makes it more likely for borrowers with student debt to qualify for a loan by
allowing lenders to accept student loan payment information on credit reports.
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We
partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing
finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae .
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/fannie-mae-introduces-innovative-solutions-for-borrowers-with-student-loan-debt-300445225.html
SOURCE Fannie Mae