Fannie Mae lightens load for student- debt carryers

Here’s some good news for people burdened with student loan debts: Mortgage investor Fannie Mae has just made it easier to purchase a first home or do a “cashout” refinancing to pay off student debt.

Roughly 43 million Americans are carrying $1.4 trillion worth of student debt, according to estimates. It is a key reason why so many young, would-be home buyers remain renters — or camped out with their parents.

So Fannie’s changes could be game-changers. There are three:

■ If you’re one of the 5 million-plus borrowers who participate in federal reducedpayment plans, your actual monthly payments will count for your debt-to-income ratio. Previously, lenders were required to factor in 1 percent of your loan balance.

■ For 8.5 million homeowners carrying student debt, Fannie has lowered the costs of a “cash out” refinancing, provided the cash is used to retire student debt. Among the potential beneficiaries: parents who help pay off their kids’ student loans.

■ If you have nonmortgage debts being paid by someone else — say your parents pay your credit-card bill — these no longer will count in your DTI, provided the payments have been made for 12 months.

“This is a step toward common sense,” said John Meussner, a loan officer at Mason McDuffie Mortgage in Orange County, California.

He described a customer who couldn’t qualify for a refinance under the old rules: a parent with $100,000 in debt she took to pay for her children’s education. She was actually paying just $100 a month.

But not every lender is enthusiastic about the changes. Steve Stamets, loan officer with Mortgage Link Inc. in Rockville, Maryland, worries that borrowers who already have trouble paying down student loans could end up defaulting on their mortgages.