Making FHA Work for Borrowers with Student Debt Act of 2021

Bill: 117-hr-3861
Sponsor: full_name: Rep. Meeks, Gregory W. [D-NY-5]
Introduced: 2021-06-14
Policy area: Finance and Financial Sector
Latest action: action_date: 2021-06-14
text: Referred to the House Committee on Financial Services.

Summaries:
action_date: 2021-06-14
action_desc: Introduced in House
text: <p><strong>Making FHA Work for Borrowers with Student Debt Act of 2021 </strong></p> <p>This bill requires the Federal Housing Administration (FHA) to modify its treatment of student loan debt for purposes of determining eligibility for federally insured mortgages for single-family homes. Specifically, the FHA must calculate a borrower's student loan debt obligation as the monthly payment required in connection with the loan or, if no monthly payment is required, 0.5% of the outstanding balance of the loan. Currently, the FHA calculates a borrower's student loan debt obligation as 1% of the outstanding balance of the loan. </p>

tv_txt: I 117th CONGRESS 1st Session H. R. 3861 IN THE HOUSE OF REPRESENTATIVES June 14, 2021 Mr. Meeks (for himself and Ms. Williams of Georgia ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the National Housing Act to revise the treatment of student loan debt in the underwriting of FHA loans, and for other purposes.

1. Short title This Act may be cited as the Making FHA Work for Borrowers with Student Debt Act of 2021 . 2. Treatment of student loan debt being repaid Section 203 of the National Housing Act ( 12 U.S.C. 1709 ) is amended by inserting after subsection (r) the following new subsection: (s) Treatment of student loan debt being repaid (1) In general In determining eligibility of single-family mortgages, and mortgagors under such mortgages, for insurance under this title, for purposes of any calculation of the amount of liabilities of a mortgagor, or comparison of the amount of such liabilities to the income of the mortgagor, the Secretary shall consider a covered educational liability to be— (A) except as provided in subparagraph (B), in the same monthly amount as the amount that the mortgagor is actually required to pay on a monthly basis in connection with such liability; or (B) in the case of a mortgagor whose required monthly payment under such liability is $0, the amount equal to 0.5 percent of the outstanding balance of the loan in connection with such liability. (2) Covered educational liability For purposes of this subsection, the term covered educational liability means a liability— (A) that is a student loan incurred for educational purposes; (B) that is required to be repaid through payments made on a regular basis; and (C) for which documentation has been provided that is sufficient, in the determination of the Secretary, to demonstrate that the liability complies with the requirements under subparagraphs (A) and (B). .