How do student loans under an income-based repayment plan affect a purchaser's eligibility for the USDA rural housing loan?

nleadingham397, seems like there is some confusion here in the responses you received. We will use whatever the monthly payment currently is under an income-based repayment plan. Seems like the answers you received were in reference to deferred student loan payments, where they are not in repayment. This is not the case with your scenario based on your question.Justin Murray jmurray@WintrustMortgage.com 312 256 4065, I lend in SC

Per USDA guidelines, a $0 student loan payment based on the IBR is not considered a "Consistent" payment.. meaning that each year, you have to reapply for the IBR payment.. at some time, you will be obligated to start making payments.. therefore, USDA will not allow a $0 payment.. Likewise, if your student loan servicer cannot produce documentation showing what your "Fixed" payment would be if you were not in the IBR program, then USDA will add 1% of your outstanding balance as an anticipated student loan payment.. They have to establish a consistent payment for USDA qualifying.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

You now have to use 2% of the balance as the monthly payment regardless of the structure of the repayment.

Guidelines now require minimum 1% of the balance be used. If you owe $20,000 that would be $200/mo be used as the payment in calculating your debt ratio's. (Brokers may have different/higher requirements based on where they place the loan.)