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60 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Student Debt Holders Get Relief From FHA A new policy change by the FHA will assist borrowers with student loan debt in their quest for homeownership. T he Federal Housing Administration (FHA) has announced updates to its student loan monthly payment calculations to take steps to remove barriers and provide more access to afford- able single-family FHA-insured mortgage financing for creditwor- thy individuals with student loan debt. The updated policy more closely aligns FHA student loan debt calculation policies with other housing agencies, helping to streamline and simplify origina- tions for borrowers with student loan debt obligations. "As our country comes to- gether to remember Juneteenth and acknowledge National Homeownership Month, we are reminded of a basic truth: that, too often in our history, the march toward freedom has been a long, halting, and uneven journey," said U.S. Department of Housing & Urban Development (HUD) Secretary Marcia L. Fudge. "Homeownership is the corner- stone of the American Dream and the best way to build generational wealth. I am proud that FHA is taking action to make it easier for borrowers with student loan debt to qualify for a federally insured mortgage. This new policy will make a big difference for individ- uals throughout our nation and is another step in our mandate to promote equity and opportunity for homeownership." The policy updates apply to FHA Single Family Title II for- ward mortgages and remove the current requirement that lenders calculate a borrower's student loan monthly payment of 1% of the outstanding student loan balance for student loans that are not fully amortizing or are not in repay- ment. The new policy bases the monthly payment on the actual student loan payment, which is often lower, and helps homebuy- ers who, with student debt, meet minimum eligibility requirements for an FHA-insured mortgage. "Today, as we prepare to celebrate Juneteenth and recog- nize June as Homeownership Awareness Month, it is critical that we reflect on all of the ways that racial discrimination is woven into our society, especially in our housing system," said U.S. Senator Sherrod Brown, Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. "Too many generations of Black families are locked out of the opportunity to get an affordable mortgage, own their own home, and build wealth to pass on to their children and grandchildren. I commend HUD and Secretary Fudge for taking this first step to address inequities in our hous- ing system and look forward to continuing to work together to increase access to homeownership and address disparities." Lenders may implement the changes immediately but must implement the changes for FHA Case Numbers assigned on or after August 16, 2021. Principal Deputy Assistant Secretary for the Federal Housing Administration Lopa Kolluri said, "These changes remove unneces- sary constraints for otherwise creditworthy borrowers and reinforce FHA's ability to serve those who need us most, includ- ing first-time homebuyers and underserved communities." "Homeownership is the cornerstone of the American Dream and the best way to build generational wealth. I am proud that FHA is taking action to make it easier for borrowers with student loan debt to qualify for a federally insured mortgage." —Marcia L. Fudge, Secretary, U.S. Department of Housing & Urban Development