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UPDATE: USDA Student Loan Guidelines for Calculating Monthly Payments

February 24th, 2023 by Sean Stephens

What are USDA Student Loan Guidelines for Calculating Monthly Payments? How can the updated USDA Student Loan Guidelines help you purchase a home in Florida, Texas, Tennessee, or Alabama?Improved USDA Guidelines on Student Loans

As many of us know, student loan debt can have a major impact on qualifying for a mortgage!

Understanding the improved monthly payment calculations for USDA student loan guidelines can mean the difference between homeownership and a missed opportunity!

In today’s short video, I will review updated USDA student loan guidelines and break down the calculations so you will be in the know.

Now, before we get started, don’t forget to take advantage and download our USDA Blueprint for Success with the link below. This free guide is designed to walk you through the process step-by-step and is a great tool for both homebuyers and Realtors alike.

Unfortunately, the fact is that qualifying to buy a home with student loan debt is becoming a bigger challenge each and every day, and this is not just a problem for First-Time Homebuyers. While many of us may say that seems like common sense, the actual numbers are somewhat staggering.

In a recent Federal Reserve report, it listed that total student loan debt is now more than $1.7 trillion! Now, after we all have taken a deep breath, let’s review the improved USDA student loan guidelines for calculating student loan monthly payments.

USDA Student Loan Guidelines – Payment Calculations

USDA Student Loan Guidelines require that lenders use the following payments for outstanding student loans, regardless of payment status:

  • The payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or
  • One half (.50) percent of the outstanding loan balance documented on the credit report or creditor verification, when the payment amount is zero.

For example purposes, let’s look at the following scenarios:

Ex. 1:  $20,000 owed in student loan debt and the payment amount reported on the credit report was $75.00.

Since that amount is above zero, we would use $75.00 as the monthly amount against their debt-to-income ratios.

Remember that debt-to-income ratios compare total monthly expenses against monthly income and are used in determining overall loan amount eligibility.

Ex. 2: $10,000 is owed on a student loan and the verified monthly payment amount is $0. In this case, the monthly payment would be calculated by taking the $10,000 X .50% = $50.00 per month as the student loan payment.

USDA Guidelines on Student Loans in FL, AL, TN, TX

Additional USDA Student Loan Guidelines

USDA student loan guidelines provide for the following:

  • Student loans in the applicant’s name alone but paid by another party remain the legal responsibility of the applicant. The applicable payment must be included in the monthly debts.
  • Student loans in a “forgiveness” plan/program remain the legal responsibility of the applicant until they are released of liability from the creditor. The applicable payment must be included in the monthly debts.

Summary – USDA Student Loan Guidelines

In summary, USDA student loan guidelines continue to improve, but understand that regardless of your loan status, a minimum monthly payment will be calculated even if no payment is currently due.

USDA Approved Lender

As a USDA Approved Lender, we will walk you through the USDA loan qualifying process step-by-step. Just call, text, or email to discuss your scenario and let us show you the “Metroplex” difference!

Call/Text: 863-593-2001
800-806-9836 Ext. 280

Thank you again for forwarding and sharing today’s video with any friends, family, co-workers, or clients who are looking to buy, sell, or refinance!

As always, I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

P.S. – You can download our “USDA Blueprint for Success” by CLICKING HERE.

How to qualify for a USDA loan with student loans in Florida, Texas, Tennessee, and Alabama





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