FHA student loans and monthly debts: the payment on the credit report is not always the payment FHA uses.
Qualifying debt is one of the most common places an FHA preapproval changes. Student loans, installment debts, revolving accounts and contingent liabilities each have their own treatment.
Student loans
FHA requires student loans to be included regardless of payment status. Under current policy, when the credit report reflects a monthly payment above $0, the lender generally uses the payment shown or the documented actual payment when permitted. When the reported payment is $0, FHA generally uses 0.5% of the outstanding balance as the monthly obligation.
Installment debt
Installment obligations are generally included in DTI. FHA has rules for debts with a limited number of payments remaining, but the underwriter must consider whether excluding the debt would affect the borrower's ability to make the mortgage payment.
Revolving debt
Revolving accounts require a monthly obligation. When a credit report does not show the required payment, FHA provides a calculation method rather than allowing the debt to disappear from DTI.
Contingent liabilities / co-signed debt
FHA can permit exclusion of certain obligations when another party is making the payments and the required payment history/documentation is established. The fact that “someone else pays it” is not enough without documentation.
Community-property states
When applicable, FHA requires consideration of a non-borrowing spouse's debts even though the spouse is not obligated on the FHA note. This can materially change qualification in community-property states.
Official policy baseline
This guide is based on HUD/FHA Single Family Housing Policy Handbook 4000.1. HUD identifies Handbook 4000.1 as its consolidated, comprehensive source of FHA Single Family policy. The current handbook update was published August 12, 2026. Always verify current Handbook policy and applicable Mortgagee Letters at the time of the transaction.