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Paragon Blog

Fannie Mae Eases Student Debt Policy

Memphis, TN - May 17, 2017

Great news for homebuyers and homeowners with student loan debt!

Fannie Mae has announced new policies to help borrowers with student debt qualify for a home purchase or refinance loan.

The new rules provide three flexible solutions to current and future homeowners, while allowing lenders to serve more borrowers. These solutions include:

  • Student Loan Cash-Out Refinance: Offers homeowners the opportunity to pay off high interest rate student debt while potentially refinancing to a lower home loan rate.
  • Debt Paid by Others: Excludes non-mortgage debt (such as credit cards, auto loans and student loans) paid by someone else from the borrower's debt-to-income ratio, expanding borrower eligibility to qualify for a home loan.
  • Student Debt Repayment Calculation: Allows lenders to accept student loan payment information on credit reports, increasing the likelihood that borrowers with student debt could qualify for a loan.

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