Can You Buy A House With Student Loan Debt? What Lenders Count in 2026

Key takeaways

• Yes, you can buy a house with student loan debt. Lenders count a monthly student loan payment in your debt-to-income (DTI) ratio, not your total balance.
• Each mortgage program counts student loans differently. On a $60,000 balance that’s deferred or on a $0 plan, the counted payment ranges from $0 to $600 a month.
• Two 2026 federal changes can move your counted payment: the SAVE plan has ended, and the new Repayment Assistance Plan (RAP) has a $10 minimum payment.
• A defaulted federal student loan blocks FHA, VA, and USDA financing until you resolve the default.

Yes, you can buy a house with student loan debt. Mortgage lenders don’t reject applicants for having student loans. Instead, they factor your monthly student loan payment into your debt-to-income (DTI) ratio. The amount they count depends on three things: your mortgage program, your repayment plan, and whether your loans are in repayment, deferment, forbearance, or default.

Understanding how lenders count student loans is especially important in today’s housing market. The typical U.S. monthly mortgage payment hit $2,777 in early October 2026, one of the highest levels on record, according to Redfin. At the same time, Americans owe $1.65 trillion in student loans, and more than 1 in 10 of those balances are seriously past due, according to the Federal Reserve Bank of New York.

The good news is that buyers have more negotiating power than they’ve had in years. Nearly half of U.S. home sellers offered concessions in August 2026, and a record share of sellers cut their asking price in early October. Whether you’re shopping for a condo in New York City or a house in Chicago, this guide explains how lenders count your student loans and how to put yourself in a strong position to buy.

Can you get a mortgage with student loan debt?

Yes. Student loan debt is one factor in a mortgage application, not a disqualifier. Mortgage lenders review four things when you have student loans:

• Debt-to-income ratio: Your total monthly debt payments, including your counted student loan payment and the new mortgage payment, divided by your gross monthly income. Learn how DTI affects your mortgage.
• Credit score: On-time student loan payments build your credit history. Late or missed payments lower your score.
• Income and employment: Steady, documented income from a job, self-employment, or other verifiable sources.
• Savings: Money for your down payment, closing costs, and cash reserves.

How to calculate your debt-to-income ratio

To calculate your DTI ratio, add up your monthly debt payments, divide the total by your gross monthly income, and multiply by 100.

DTI = (total monthly debt payments ÷ gross monthly income) × 100

For example, a buyer who earns $6,000 a month before taxes and has a $250 car payment, a $300 student loan payment, and a $2,000 housing payment has a DTI of 42.5% ($2,550 ÷ $6,000 × 100). Many lenders use 43% as a benchmark, and some loan programs allow higher ratios for borrowers with strong credit or cash reserves. Your student loan payment uses part of that limit, so the way your lender counts it directly affects how much home you qualify for.

EXPERT TIP: Student loans show up in your DTI ratio.

“Student loans mainly affect qualifying through the debt-to-income ratio, which compares total monthly debt payments to gross monthly income,” says Dr. Kareem Tannous, Owner at Alliance Realty & Financial Services, Inc. “Lenders use the payment reported on the credit file or on the borrower’s repayment plan. When a plan shows a $0 payment, some loan programs use a percentage of the total balance instead. Lenders also review income stability, credit history, savings, and the down payment.”

How do lenders count student loans in your debt-to-income ratio?

Mortgage lenders count the monthly student loan payment shown on your credit report or your servicer’s documentation when that payment is above $0. When your payment is $0, deferred, or in forbearance, lenders substitute a calculated payment based on your loan balance, often called a placeholder payment. Each mortgage program sets its own rule:

Note: These are general guidelines. The payment your lender uses may vary based on your loan documentation, repayment plan, and any upcoming payment changes. Ask your lender to confirm how your student loans will be counted.

Student loan rules by mortgage program

• Conventional loans (Fannie Mae): Lenders count your reported or documented payment. A documented $0 income-driven payment can count as $0, while deferred loans and loans in forbearance typically count at 1% of the balance or a fully amortizing payment.
• Conventional loans (Freddie Mac): Lenders count your reported or documented payment when it’s above $0. A $0 payment, deferment, or forbearance counts at 0.5% of the balance. If you’re on an income-driven repayment plan with an upcoming payment increase or recertification, different calculations may apply.
• FHA loans: Lenders count your reported payment when it’s above $0. Otherwise, they count 0.5% of the outstanding balance.
• VA loans: Lenders count the higher of your reported payment or 5% of the balance divided by 12, unless you document your actual payment. Student loans deferred at least 12 months past closing aren’t counted.
• USDA loans: Lenders count your reported payment when it’s above $0. Otherwise, they count 0.5% of the balance.

Example: How $60,000 in student loans counts by loan program

Here’s the monthly payment a lender would count for the same $60,000 federal student loan balance in three situations:

On the same $60,000 balance, the counted payment ranges from $0 to $600 a month depending on the loan program. If your student loans are deferred, in forbearance, or on a $0 plan, compare loan programs with your lender before you apply.

EXPERT TIP: Check your servicer records early.

“Buyers may benefit from checking their loan servicer’s records early so the reported payment is accurate,” says Dr. Kareem Tannous. “Paying down credit card balances and avoiding new debt before applying often makes the biggest difference. An income-driven repayment plan may lower the required monthly payment, and a mortgage professional can show how that change affects the numbers. Keeping every payment on time is essential.”

How much house can you afford with student loans?

Your counted student loan payment affects how much you can qualify to spend on a home. The higher the payment your mortgage lender includes in your debt-to-income (DTI) ratio, the less room you have for a monthly housing payment.

For example, say you earn $72,000 a year ($6,000 a month before taxes) and have a $250 car payment. At a 43% DTI, your total monthly debt limit is $2,580. Here’s how different student loan payments affect the amount left for a housing, including your mortgage principal, interest, property taxes, and insurance:

In this example, a $600 counted student loan payment reduces your available monthly housing budget by $600 compared to a $0 payment. That’s why understanding how your lender calculates your student loan payment can make a meaningful difference in how much home you qualify for.

How to use these numbers when shopping for a home

Start by estimating what you can comfortably afford each month, including your mortgage payment, property taxes, homeowners insurance, and any HOA fees. Then compare that amount with what a lender may approve based on your income, existing debts, and student loan payments.

To put this into perspective, Redfin reported a median monthly mortgage payment of $2,777 in the four weeks ending October 11, 2026. Using the same 43% DTI limit and $250 car payment, a buyer would need an annual income of about $84,500 to cover a $2,777 housing payment with a $0 counted student loan payment, or about $101,200 with a $600 counted payment. 

Your own payment depends on your price, down payment, rate, property taxes, and insurance. A lower price point, a larger down payment, or a different loan program can close the gap. Plug your numbers into Redfin’s affordability calculator and check today’s mortgage rates as you plan.

How do the 2026 student loan changes affect home buyers?

Federal student loan repayment changed in 2026, and two changes can move the payment your mortgage lender counts: the end of the SAVE plan and the launch of the Repayment Assistance Plan (RAP).

What happens to SAVE borrowers when they apply for a mortgage?

The SAVE plan ended after a March 2026 court order. Starting July 1, 2026, federal loan servicers began sending SAVE borrowers notices giving them 90 days to choose a new plan, , followed by a final 30-day notice before automatic enrollment in the Standard or Tiered Standard plan. Many SAVE borrowers spent months in forbearance, and forbearance triggers a calculated payment: 1% of the balance on a Fannie Mae conventional loan and 0.5% on FHA, Freddie Mac, and USDA loans, depending on documentation and program requirements. Moving to a plan with a documented monthly payment can lower the amount your lender counts.

How does the RAP plan affect your mortgage application?

The Repayment Assistance Plan (RAP) launched July 1, 2026. RAP payments equal 1% to 10% of your adjusted gross income (AGI), minus $50 per dependent, with a $10 minimum payment. Because RAP payments never drop to $0, FHA, Freddie Mac, and USDA lenders count your actual RAP payment instead of the 0.5% placeholder. For example, a borrower with a $45,000 AGI and no dependents would pay about $150 a month under RAP, half the $300 placeholder on a $60,000 balance.

When can switching to RAP raise your counted payment?

Switching to RAP can raise your counted payment if you’re on an older income-driven plan with a documented $0 payment and plan to use a Fannie Mae conventional loan, because RAP’s $10 minimum replaces a payment Fannie Mae would count as $0. Taking out a new federal loan or consolidating on or after July 1, 2026, also limits all of your federal loans to RAP or the Tiered Standard plan. Run the numbers with your lender before you switch plans or consolidate.

Can you buy a house if your student loans are in default?

You can’t get an FHA, VA, or USDA loan while a federal student loan is in default. Defaulted federal student loans are flagged in CAIVRS (the Credit Alert Interactive Voice Response System), the federal government’s delinquent-debt screening database, which lenders check for government-backed mortgages. A default also damages your credit score, which affects conventional loan approval and pricing.

To qualify, bring defaulted federal loans back into good standing through loan rehabilitation or consolidation before you apply, and ask your lender how many months of on-time payments they need to see afterward. Private student loans aren’t reported to CAIVRS, but a private loan default or collection account still hurts your credit and can affect approval on any loan type.

How to buy a house with student loans in 8 steps

1. Check how your student loans appear on your credit reports

Pull your free reports at AnnualCreditReport.com and confirm each student loan shows the correct balance, status, and monthly payment. A missing or $0 payment can trigger a placeholder payment. Dispute errors with the credit bureau and your servicer before you apply.

2. Get your payment documented

Ask your servicer for a statement showing your repayment plan and monthly payment. Your lender needs this statement when your payment is $0, lower than the payment on your credit report, or not reported at all.

3. Choose your repayment plan before you apply

The plan you’re on when you apply sets the payment your lender counts. Compare your repayment options against the student loan rules for the mortgage program you plan to use.

4. Lower your other monthly debts

Paying off a credit card or small loan frees up DTI room. Avoid opening new credit, like a car loan, before you apply, and keep credit card balances low to protect your credit score.

5. Match your loan program to your student loan situation

• Deferred at least 12 months past closing and VA-eligible: A VA loan doesn’t count the payment.
• Documented $0 income-driven payment: A Fannie Mae conventional loan counts it as $0.
• Smaller down payment or lower credit score: FHA loans allow 3.5% down with a 580 credit score and count $0 or deferred payments at 0.5% of your balance.
• Buying in an eligible rural or suburban area: USDA loans require no down payment for qualified borrowers.

6. Use down payment assistance and seller concessions

State and local down payment assistance programs can cover part of your down payment or closing costs. You can also ask the seller to cover closing costs or buy down your mortgage rate. With sellers offering concessions in 44.7% of U.S. home sales in August 2026, according to Redfin, a closing cost credit can protect the savings you need for reserves.

EXPERT TIP: Work backward from your monthly payment. 

“In Central Texas, affordability is the biggest factor, so I always start by asking buyers what monthly payment they’re truly comfortable with and then we work backwards from there,” says Brandon Holley, Owner at Holley Homes Realty. “Next, I get them talking with a lender early, so they know exactly how their student loans are being counted and what options they have to lower that payment. Keeping every payment on time and avoiding new credit before applying goes a long way. I also have buyers look at new construction, because builder incentives can often help cover closing costs and buy down the interest rate, which gets them closer to their number than they expect.”

7. Consider a co-borrower

Adding a co-borrower combines your incomes, which can lower your DTI. Both borrowers are equally responsible for repaying the mortgage, and the co-borrower’s debts count too.

8. Get pre-approved and ask how your loans were counted

A mortgage pre-approval shows how much you can borrow and signals to sellers that you’re ready to buy. Ask your lender which student loan payment they used and whether a different loan program would count it lower.

EXPERT TIP: Start with a conversation.

“Buying a home with student loan debt is only getting more common, but it’s far from a new problem. People have been doing it successfully for the last 20 to 25 years. The instinct is to assume debt automatically disqualifies you from a mortgage, but that’s not true. The smartest first move is a conversation with your agent and a lender to understand your exact position, because that’s what turns a vague fear into a real, workable number,” says DJ DellaSala, CEO of DJ & Lindsey Real Estate.

Should you refinance your student loans before buying a house?

It depends on the type of loan. Refinancing private student loans at a lower rate or longer term can lower your monthly payment and your DTI, although a longer term may increase the total interest you pay. Refinancing federal loans into a private loan ends your access to federal income-driven plans, deferment, forbearance, and forgiveness programs, and you can’t move convert the debt back into federal loans. Refinancing also involves a hard credit inquiry, so finish it before you start your mortgage application.

Should you pay off student loans before buying a house?

You don’t have to pay off student loans before buying a house. If your DTI fits your loan program’s requirements and you have savings for a down payment, closing costs, and an emergency fund, you may be able to buy with student loans. Paying down debt first makes more sense when your monthly payments push your DTI above your program’s limit or leave little room in your budget. If your federal loans are in default, you’ll need to resolve the default before qualifying for certain government-backed mortgages. For a deeper look, read should you pay off student loans before buying a house?

Frequently asked questions about buying a house with student loans

Do student loans hurt your chances of getting a mortgage?

Student loans raise your DTI ratio, which lowers the loan amount you qualify for. They don’t disqualify you from a mortgage, and a history of on-time student loan payments can help your credit score.

Do lenders count deferred student loans?

Yes, on most loan programs. Fannie Mae counts 1% of the balance or a fully amortizing payment. FHA, Freddie Mac, and USDA count 0.5% of the balance. VA loans don’t count student loans deferred at least 12 months past your closing date.

What DTI do you need to buy a house with student loans?

Many lenders use a 43% DTI as a benchmark, including your student loan payment and new housing payment. Some loan programs allow higher ratios for borrowers with strong credit or cash reserves.

Can you get an FHA loan with student loans in forbearance?

Yes, as long as your federal student loans aren’t in default. FHA lenders count 0.5% of your outstanding balance as your monthly payment while your loans are in forbearance.

Does an income-driven repayment plan help you qualify for a mortgage?

A lower documented student loan payment lowers your DTI on every loan program. A $0 payment counts as $0 only on a Fannie Mae conventional loan; FHA, Freddie Mac, and USDA lenders use 0.5% of your balance instead.

Can you buy a house with $100,000 in student loans?

Yes. Your student loan balance matters most when a lender uses a placeholder payment. On $100,000, the 0.5% placeholder is $500 a month and the 1% placeholder is $1,000 a month. With a documented monthly payment above $0, lenders count that payment instead.

Does the end of the SAVE plan affect my mortgage application?

It can. Former SAVE borrowers in forbearance have their loans counted at 0.5% or 1% of the balance, depending on the loan program. Moving to a plan with a documented payment, such as RAP or IBR, gives your lender an actual payment to use.

The post Can You Buy A House With Student Loan Debt? What Lenders Count in 2026 appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.