Can I Buy a House with Student Loans? Here’s What Every Homebuyer Should Know About the End of the SAVE Plan

Written by Lesley Guerrero | Chief Operating Officer | Mortgage Loan Originator | NMLS #1615801

Helping Texans make smarter home financing decisions through practical mortgage education.

If you have federal student loans and are planning to buy a home, recent changes to student loan repayment deserve your attention. This is a little bit of a lengthy read, but worth your time.

The SAVE or Saving on a Valuable Education Plan ended in March 2026. Beginning July 1, 2026, eligible borrowers gained access to an income-driven repayment option called the Repayment Assistance Plan, or RAP. Depending on the borrower’s loans and eligibility, other repayment options may also be available.

What is RAP?

The Repayment Assistance Plan is an income-driven repayment plan. A borrower’s required payment is based primarily on income and number of dependents rather than only on the student loan balance.

That distinction matters because an $80,000 student loan balance does not automatically produce a particular RAP payment. Two borrowers with the same balance could have different required payments because their incomes or family circumstances are different.

For mortgage qualification, however, the lender must still determine whether the RAP payment is established, documented and acceptable under the guidelines for the mortgage program being used.

The important mortgage question is not simply whether you have student loans. It is:

What monthly student loan payment will the mortgage lender be required to include when calculating your debt-to-income ratio?

Mortgage lenders generally focus on your required monthly obligations compared with your qualifying monthly income. This calculation is known as your debt-to-income ratio, or DTI.

Your total student loan balance is not automatically disqualifying. However, the balance can still matter when the mortgage program requires the lender to calculate a payment as a percentage of the outstanding amount.

A change in your student loan repayment plan could therefore change:

The monthly payment used for mortgage qualification
Your debt-to-income ratio
The purchase price or mortgage payment for which you qualify
Which mortgage program is most favorable for your circumstances

The payment you make is not always the payment used for mortgage qualification

If your credit report shows an accurate monthly student loan payment greater than $0, the lender can generally use that payment.

The situation becomes more complicated when:

The credit report shows a $0 payment
The loan is deferred or in forbearance
The reported payment does not match the most recent servicer statement
A new repayment application is still being processed

In those situations, different mortgage programs may produce very different qualifying payments.

How different mortgage programs may treat a $0 payment

Consider a borrower with a $50,000 student-loan balance and a $0 payment shown on the credit report.

Fannie Mae conventional financing

If the borrower is enrolled in an income-driven repayment plan and documentation verifies that the actual required payment is $0, Fannie Mae may allow the lender to use $0 for qualification.

However, if the loan is deferred or in forbearance, the lender generally must use either:

1% of the outstanding balance, or
A fully amortizing payment calculated from the documented loan terms

On a $50,000 balance, the 1% calculation would be $500 per month.

Freddie Mac conventional financing

If the credit report shows a $0 monthly payment, Freddie Mac generally requires the lender to use 0.5% of the outstanding balance unless other documentation supports a current payment greater than $0.

On a $50,000 balance, that calculation would be $250 per month.

FHA financing

If the credit report shows a $0 monthly payment, FHA generally requires the lender to use 0.5% of the outstanding balance.

On a $50,000 balance, that would also be $250 per month.

If an actual payment greater than $0 is properly documented, FHA may generally use the documented payment instead.

Why the difference matters

Assume the borrower above earns $6,000 per month before taxes.

A qualifying student loan payment of:

$0
$250
or $500

could produce a materially different debt-to-income ratio, even though the borrower and student loan balance are exactly the same. That difference could affect the mortgage amount available to the borrower or make one mortgage program more suitable than another.

What if my credit report shows an old payment?

During the transition away from SAVE, your credit report may not always match the most recent information from the student loan servicer.

When the payment shown on the credit report appears inaccurate or outdated, the mortgage lender may request:

The latest student loan statement showing required monthly payment
Evidence that a repayment-plan application has been approved
Additional information about deferment, forbearance or repayment status

A $0 payment appearing on a credit report does not automatically mean the lender can use $0. The reason for the $0 payment and the documentation supporting it matter.

Can a student loan payment ever be excluded?

In some situations, yes.

For example, some conventional mortgage guidelines may allow a student loan payment to be excluded when another person, such as a parent, has made the payments for at least the most recent 12 months. The lender must generally document the on-time payment history.

Student loans associated with forgiveness, cancellation or discharge programs may also receive different treatment in limited circumstances. Eligibility for a forgiveness program alone is not always enough; the mortgage lender must obtain the documentation required by the applicable loan program.

Should you change repayment plans to qualify for a mortgage?

Don’t select a student loan repayment plan solely because it appears to improve mortgage qualification.

A lower required monthly payment could help your debt-to-income ratio, but the repayment plan may also affect:

Total interest paid & how quickly the principal balance declines
Length of repayment
Eligibility for forgiveness
Tax or financial planning considerations

Your student loan servicer or financial adviser can help you evaluate repayment options. Your mortgage professional can explain how the documented payment would likely be treated under the mortgage programs you are considering.

Checklist of What to gather before applying for a mortgage

If you have student loans, gather the following before beginning the mortgage process:

Your most recent student loan statement
Your required monthly payment
Documentation showing whether the loan is in repayment, deferment or forbearance
Confirmation of any recently approved repayment-plan change
Documentation if someone else has made the payments for the past 12 months, if applicable
Documentation relating to an established forgiveness, cancellation or discharge program

The bottom line

Student loans do not automatically prevent you from buying a home.

However, the end of SAVE and the introduction of RAP may change the payment some borrowers are required to make. That payment may also change the amount included in the borrower’s mortgage debt-to-income ratio.

Because Fannie Mae, Freddie Mac and FHA do not treat every $0 payment or repayment status the same way, the mortgage program and the supporting documentation can make a significant difference.

Before assuming that your student loans prevent you from buying or changing your repayment plan solely to improve your mortgage qualification, have the numbers reviewed under more than one mortgage program.

Disclaimer: Your milage may vary. Guidelines change. Work with your mortgage professional.

Reviewed: July 2026

Estimated Reading Time: 7 minutes

Topics: Student Loans, First-Time Homebuyers, Conventional Loans, FHA Loans, Mortgage Tips, SAVE

About the Author

Mission Mortgage of Texas, Inc.

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