The added clarity provided by the Federal Housing Administration s revised single-family handbook comes at the expense of lender flexibility to get loans qualified, including a popular workaround for borrowers with deferred student loan debt.
The government giveth, the government taketh away.
FHA just closed the loophole that allowed borrowers to not count deferred student loan payments in their debt to income (DTI) ratio, meaning borrowers will qualify for less than they were able to before. However, consumers with pending tax lien payments couldn’t get a FHA loan, new rules allow borrowers with a payment plan and three months of on-time payments to qualify.
So…that’s a wash, right? Wrong. “It tightens certain underwriting guidelines that were on the ‘why people love FHA’ list,” according to a source named in the article.