FHA issued Mortgagee Letter 2021-13, modifying the calculation of student loan payments for purposes of determining debt-to-income ratios. Per the Mortgagee Letter, lenders must now use the payment amount reported on the credit report or the actual documented payment (when the payment amount is above zero), or .5% of the outstanding loan balance (when the payment amount on the credit report is zero). Previously, lenders were required to use the actual documented payment, or the greater of 1% of the outstanding loan balance or the monthly payment reported on the credit report. The modified calculation is effective for case numbers assigned on or after August 16, 2021 (lenders may, however, use the modified calculation immediately).
Click to view the FHA Mortgagee Letter 2021-13: https://www.tenaco.com/wp-content/uploads/2021/06/FHA-Mortgage-Letter-2021-13-06-17-21.pdf
