April 25 Fannie Mae said on Tuesday it
had launched several new programs for borrowers saddled with
student loans to reduce their interest payments or help them buy
U.S. student loans outstanding, which reached a record $1.31
trillion in 2016, have raised concerns about their drag on
consumer spending and homeownership, according to analysts.
"These new policies provide three flexible payment solutions
to future and current homeowners and, in turn, allow lenders to
serve more borrowers," Jonathan Lawless, Fannie Mae's vice
president of customer solutions said in a statement.
One of the programs allows homeowners to refinance by
combining their mortgage with student loans, which may result in
a sizable drop in monthly payments.
There are roughly 8.5 million homeowners with student loans,
according to Lawless.
Interest rates on private student loans may run as high as 8
percent, compared with under 4 percent on a 30-year fixed-rate
mortgage in the latest week.
For a homeowner to qualify for refinancing under the Fannie
May program, the consolidated total of the mortgage and student
loan cannot exceed $424,100. The homeowner must also meet other
borrowing criteria for the loan, Lawless said.
For potential new home buyers, Fannie Mae said a consumer
saddled with student loans would be able to exclude debt such as
credit cards, auto loans, and student loans paid by someone else
from their debt-to-income ratio.
It will also allow lenders to accept student loan payment
information on credit reports, making it easier for borrowers
with student debt to qualify for a mortgage, the
Washington-based mortgage finance agency said.
Fannie Mae and Freddie Mac guarantee home loans
and package them into securities for resale to investors.
(Reporting by Richard Leong)