FHA Eases Student Loan Calculation in Bid to Tackle Mortgage Gap

June 18, 2021, 6:08 PM

The Biden administration is easing the Federal Housing Administration’s calculation of outstanding student loan debt in mortgage applications as part of a broader push to cut the racial home ownership gap.

The FHA, a component of the Housing and Urban Development Department that insures mortgages typically offered to lower-income and first-time borrowers, told lenders in a Thursday letterthat they could use a mortgage applicant’s actual monthly student loan payment—typically lower than the FHA’s previous threshold—when considering whether to offer a home loan.

“This new policy will make a big difference for individuals throughout our nation and is another step ...

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