Yes — you can buy a home if you have student loans. Most people do.
You’re far from alone: roughly 42.3 million Americans carry federal student loan debt, and 37% of first-time homebuyers have student loan debt. Among student-debt holders who don’t yet own a home, 72% believe that debt will delay homeownership. That fear is real — but student loans do not automatically stop you from qualifying.
Most of my first-time buyers have student loans. A lot of them also have car payments, credit cards, or other obligations. The real question isn’t whether you have student debt — it’s whether your full financial picture works for approval.
How student loans are treated in underwriting
Student loans are treated like any other monthly debt. If a payment shows on your credit report, it’s usually counted in your debt-to-income ratio (DTI) — your total monthly debt payments divided by your gross monthly income. That includes student loans, car payments, credit cards, and your future housing payment (principal, interest, taxes, insurance, and HOA).
A strong DTI is often 43% or below, though some programs go higher depending on the strength of the file — FHA and others can sometimes stretch to around 50% in the right scenario. So yes, student loans affect qualification. No, they usually don’t prevent it.
The biggest factor isn’t your balance — it’s the monthly payment that has to be counted. A borrower with a large balance but a manageable payment may qualify just fine, while someone with several other debts may need a better strategy. That’s where a good loan officer earns their keep: we look at your income, the debts on your credit, your savings, the right loan program, and whether anything should be paid off or left alone.
What if my student loans are deferred?
A lot of people think deferred loans don’t count. Usually not true — if no payment shows, lenders often still count one using agency rules:
- Fannie Mae: may use 1% of the balance, or a documented fully-amortizing payment; a documented $0 payment may be allowed for some income-driven plans.
- Freddie Mac: if the credit report shows zero, uses 0.5% of the balance.
- FHA: if the credit report shows zero, also uses 0.5% of the balance.
Plain-English version: deferred student loans don’t automatically knock you out — they just need to be handled correctly.
What if I’m on an income-driven repayment plan?
That can help. If your payment is reduced under an income-driven plan, lenders may be able to use that lower documented payment depending on the program and your paperwork. For Fannie Mae, documented $0 payments may also be usable in some situations. Mortgage underwriting is basically a game of “prove it on paper” — so documentation matters.
You don’t have to wait forever
This is the message I most want buyers to hear. Most buyers today carry some debt. The Federal Reserve reports the 2024 median education debt among borrowers was between $20,000 and $24,999 — manageable, not impossible. And honestly, student loans may have funded the education that gives you the income to buy in the first place. Student debt usually doesn’t mean “game over” — it just means you need the right structure.
Should you apply if you have student loans?
If you’re serious about buying, it’s worth the conversation now. Don’t disqualify yourself before a professional reviews your numbers. Sometimes the answer is “yes, you’re ready.” Sometimes it’s “not yet, but here’s exactly what needs to improve.” Both are valuable — what you don’t want is to spend six months assuming you can’t buy when you may already be closer than you think.
Final thoughts
Yes, you can buy a home with student loans. Student debt is one part of your picture — it affects qualification but usually doesn’t stop it. What matters is your income, monthly obligations, down payment, credit profile, and the strategy used to structure the loan.
Want a closer look at what you qualify for? Call me at (404) 561-6695, or see what you qualify for. For most buyers, the issue isn’t the student loans — it’s whether they have the right plan.
Ty Keller | Mortgage Loan Originator | Ty Closes Loans — powered by Edge Home Finance, LLC | NMLS #566248 | Licensed in GA, FL, CO, NC, SC