The enterprise introduces three new initiatives to help them qualify for a home loan
With student loans looming to an all-time high, Fannie Mae has come up with new initiatives to help borrowers with debt to still qualify for a home loan, according to a news release.
Some 44 million borrowers have amassed over $1.4trn in student loan debt, according to data from Student Loan Hero. That amount is $620bn higher than the country’s total credit card debt.
"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 at Fannie Mae.
As there is no “one-size-fits-all” solution to paying off student debt, the agency has come up with three ways to cater to borrowers’ needs:
- the option to pay off high-interest rates “while potentially refinancing to a lower mortgage interest rate”
- excluding non-mortgage debt paid by someone else -- such as credit cards and auto loans -- to widen borrower eligibility
- making “lenders accept student loan payment information on credit reports”
"These new policies provide three flexible payment solutions to future and current homeowners and, in turn, allow lenders to serve more borrowers,” Lawless added.
