The situation
A new-construction buyer was being evaluated with FHA financing, but the amount of outstanding student loan debt produced a debt-to-income ratio that was too high. The debt-to-income ratio, called DTI, compares monthly debts with gross monthly income.
What went wrong
Under the rules in effect for this transaction, about four years before August 2026, the FHA calculation counted a monthly student loan payment of 1% of the balance, while the Freddie Mac conventional path Sarah evaluated counted 0.5% of the balance.
What Sarah did
She compared how each program treated the student loan payment and moved the file from FHA to a Freddie Mac conventional program.
The result
The counted debt payment decreased, the DTI fell, and the transaction closed.
The 1% and 0.5% figures describe the rules at the time of this transaction, about four years ago. They are not today's FHA or Freddie Mac guidelines, which have changed. Ask Sarah how student loans are counted today.
Facing something similar?
A denial, a shaky preapproval or a tricky income question is a reason to get a second look, ideally before you sign a contract. Send Sarah your scenario.
Send your scenario to Sarah See all case studies