June 24, 2021
HUD Mortgagee Letter 2021-13 – Updated Student Loan Payment Calculations
Effected Programs: First Time Homebuyer and Homeward Bound Program
Effective Date: Immediately
Due to the current health concerns related to COVID-19, the vast majority of NJHMFA staff will be working remotely until further notice. Please contact Agency staff via their work email address. NJHMFA encourages all of our business partners and constituents to submit any and all documentation in an electronic format whenever possible as staff will continue to check email and review information submitted electronically.  
Attention Lenders:
This bulletin is regarding HUD’s updated Student Loan Payment Calculation requirements issued June 17, 2021.
HUD’s Mortgagee Letter 2021-13 (ML), issued on June 17, 2021, informs lenders of new student loan payment calculation requirements for the monthly payment obligation for FHA insured first mortgages. As issued in the Letter, this guidance must be used for all case numbers assigned on or after August 16, 2021, and lenders may begin using the announced policies immediately. 
NJHMFA recognizes that this represents a significant change to the way Debt-to-Income is calculated for FHA loans. Lenders are encouraged to use the new guidelines to help more New Jersey buyers qualify for our loans. Please note that NJHMFA has no overlays or restrictions regarding this new guideline and Participating Lenders are advised to follow the updated FHA guidelines regarding Student Loan Payment calculations.
See HUD Announcement: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_21_103
New Student Loan Payment Calculation:
For outstanding Student Loans, regardless of payment status, the Mortgagee must use:
  • The payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or
  • 0.50% of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero.

Questions? Need Help? 
If you have questions about one of our loan products or need help with a loan in the ILRS system, please e-mail your requests to SFLenders@njhmfa.gov.

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New Jersey Housing and Mortgage Finance Agency | 609-278-7400 | NJHousing.gov