Can I buy a house if I have student loan debt?

Yes, you can buy a house if you have student loan debt that you are working to pay off.  

Nearly one in six Americans have student loans and student loan debt in 2025. While many think that student loan debt will prevent them from making other major financial decisions or getting a loan to buy a home, this is not always the case. Even with student loan debt, you could get a mortgage to buy a home. 

To start the process of buying a home when you have student debt, you can begin by completing a home loan application. 

Student loans aren’t the black mark that many think and shouldn’t stop you from getting a mortgage or buying a house. 

While student loans could make borrowing money to buy a home a little trickier and put some stress on your financial situation, student loans don’t necessarily prevent you from getting a mortgage. 

When looking at a mortgage application, lenders will see your student loans under your debt-to-income (DTI) ratio. 

Your DTI ratio shows lenders the percentage of your income that is already accounted for in paying back previous debts, like student loans. If your DTI ratio is too high, lenders might see this as a problem when applying for a home loan. 

Debt-to-income (DTI) ratio is a major factor that lenders consider when looking at your mortgage application. 

A DTI ratio will let lenders know how much of your salary is being used for paying back previous debts. The higher the DTI ratio you have, the harder it could be to get a home loan. Student loans will count toward your DTI ratio. 

Your DTI ratio can be calculated by dividing your total monthly debt payments from your gross monthly income before taxes, then multiple that number by 100. 

If you are actively paying your student loans regularly, lenders will use the amount you pay monthly when calculating your DTI ratio. If your loans are in deferment, lenders will handle this differently when calculating your DTI ratio. 

For example: 

$1,800 (total monthly debt payments) ÷ $6,000 (gross monthly income) = 0.30 

Multiply the decimal result by 100 to convert it to a percentage. This percentage is your DTI ratio. 

0.30 × 100 = 30% 

So, in this example, the DTI ratio is 30%.   

Not every loan looks at student loans the same way. These are some of the different ways loan types treat student loan payments and DTI. 

When looking to get a conventional home loan, lenders will include student loan in your DTI ratio. The maximum DTI ratio, which includes your student loans, lenders could approve is 50%. 

If you are looking to get a loan backed by the Federal Housing Administration (FHA) but have student loans in deferment, lenders will either use your total monthly payments or 0.5% of your total student loan amount when determining your DTI ratio. 

When looking at DTI ratios for FHA loans, the standard maximum front-end DTI ratio is 31% and the maximum back-end DTI ratio is 43%. However, borrowers who meet additional compensating factors could qualify for a higher DTI. 

VA and USDA loans are two government-backed loans that offer borrowers who meet certain criteria many benefits, including zero-down payment options. Another advantage of these government-backed loans is that the VA does not put a limit on DTI ratio and instead relies on residual income calculations to determine eligibility. While the USDA looks for a maximum DTI ratio of 41%, they can go higher if the borrower meets other factors. 

If you are looking to improve your chances of getting a mortgage approval, there are a few things you could do. 

• If you have the time, working up your credit score and working down your DTI are some of the best ways to improve your mortgage approval chances.
• Avoid taking on any new debts when looking to get a home loan.
• Lenders look for borrowers to have a stable work history. If you can, try to have at least two years of consistent work history.
• Saving for a larger down payment typically means that you will have less to borrow and lower monthly payments, which can be easier to qualify for.

Yes, you could buy a house even if your student loans are in default. 

With student loans in default, it may be harder to qualify for a home loan, but it is not impossible. Defaulting on student loans tend to raise your DTI ratio and lower your credit score. Some loan types may require you to resolve any defaulted debts before you could qualify. 

When lenders calculate your debt-to-income (DTI) ratio, they will look at all debts you have, even deferred student loans. Your DTI ratio plays a big part in determining whether your mortgage application gets approved. 

A student loan refinance could help you qualify for a mortgage.  

Refinancing your student loan could reduce the monthly payments you make toward your student loans, which could lower your DTI ratio or raise your credit score. These could help you qualify for a mortgage. 

Whether you have student loans or not, you can start applying for your mortgage by completing a home loan application online. 

A home loan application can let you know the type of mortgage you qualify for as well as show you what the terms of your mortgage will look like. During your home loan application, you will be connected with a professional Loan Officer who can explain what the terms of your mortgage are and break down how they got there. 

Start applying for a mortgage today by filling out a home loan application! 

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