Fannie Mae Eases Lending Rules To Lower Barrier Of Student Loans

Fannie Mae Eases Lending Rules To Lower Barrier Of Student Loans

Fannie Mae plans to roll out a program they piloted last year to all 1,800 lenders they work with to help borrowers—or people who would like to be borrowers—overcome the obstacle of hefty student loans. The program provides more flexibility for grads who have financial help from family members and those who are on a flexible payment schedule with their student loan company. 

Specifically, the program allows for the following parameters: 

  • Cash-out refinance option: borrowers can roll their high-interest student loans into the money they borrow for a mortgage at a lower rate
  • Borrowers can exclude debt on their record that someone else is paying off on their behalf (such as student loans in their name that a parent is paying off)
  • Where student loan borrowers have a flexible payment arrangement (such as income-based repayment schedules), lenders are now allowed to take in to account the actual monthly payment amount rather than the higher amount that the borrowers would be responsible for under a regular payment plan. 

In addition to the press release on Fannie Mae's website, here's a helpful summary in the New York Times that you can share with your clients. 

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