Student Loans and Buying a Home in Arizona After RAP
Quick answer
Yes, you can buy a home in Arizona with student loans. What matters is the monthly payment your lender has to count. Fannie Mae can count a documented $0 income-driven payment as $0, while FHA uses your payment if it's above $0, or 0.5% of the balance if it's $0. The new Repayment Assistance Plan (RAP), open since July 1, 2026, sets payments by income, so your qualifying number may change.
Can I buy a house in Arizona if I have student loans?
Yes. Student loans don't rule you out. The balance isn't the big deal. The monthly payment your lender counts is.
That number goes into your debt-to-income ratio, or DTI. And each loan type counts it a little differently.
I'm Andria Townsend, a loan officer based in San Tan Valley. Let's walk through it.
What changed with student loans in July 2026?
The U.S. Department of Education says two new plans opened on July 1, 2026: the Repayment Assistance Plan (RAP) and the Tiered Standard plan.
Under RAP, payments are set between 1% and 10% of your income, and they drop by $50 a month for each dependent. Tiered Standard spreads payments over 10, 15, 20, or 25 years, based on how much you owe.
If you're on an older plan with loans made before July 1, 2026, the Department says you have until July 1, 2028, to pick RAP, Tiered Standard, or IBR.
Why does a home buyer care? Because your plan sets your payment. And your payment is what the lender counts.
How does Fannie Mae count student loans?
Fannie Mae's Selling Guide (B3-6-05, updated August 5, 2026) says:
- If your credit report shows a payment, the lender can use it.
- If you're on an income-driven plan and your real payment is $0, the lender can use $0, with paperwork from your servicer.
- If your loans are deferred or in forbearance, the lender uses 1% of the balance or a payment that fully pays off the loan under your terms.
How does FHA count student loans?
FHA is a common choice for first-time buyers here in Pinal County. HUD's rule is simple:
- If your payment is above $0, the lender uses that payment.
- If your credit report shows $0, the lender uses 0.5% of the balance.
Here's a quick example. Say you owe $40,000 and your report shows $0. FHA would count $200 a month. Fannie Mae, with the right $0 paperwork, could count $0.
That's a big gap. It's why it pays to compare more than one loan type when you have student debt.
Should I switch to RAP before I buy a home?
I can't tell you which student loan plan to pick. That's a decision for you, your servicer, and maybe a tax pro or financial planner.
What I can do is show you how each payment would look to a mortgage lender. Some buyers find a lower income-based payment helps their DTI. Others find a fixed plan works better for their goals. Let's run the numbers before you change anything.
What paperwork should I gather?
- Your most recent student loan statement
- A letter or screenshot from your servicer showing your current required payment
- Your plan name and when your next recertification is due
- Any deferment or forbearance letters
Having these early can save days during underwriting.
What if someone else pays my student loans?
Fannie Mae says a debt you owe, but someone else actually pays, can sometimes be left out of your DTI. The lender needs 12 months of canceled checks or bank statements from the person paying. It doesn't work if that person is the seller or the real estate agent.
Married and buying on your own? Arizona is a community property state, so on an FHA or VA loan your spouse's student loans and other debts can count even if your spouse isn't on the loan. I walk through it in Arizona community property and your spouse's debt.
What does this mean for current homeowners?
If you're thinking about a refinance or cash-out, the same rules apply. A plan change could shift your DTI up or down. Check with me before you switch, so there are no surprises mid-loan.
What's the next step for Arizona buyers with student loans?
Credit matters too. Read VantageScore 4.0 and Your Arizona Home Loan and our post on Arizona Is Home down payment help. If you're shopping in San Tan Valley, Queen Creek, Florence, or Maricopa, let's get your student loans sorted first.
Frequently asked questions
Can I get a mortgage in Arizona with student loans?
Yes. Lenders look at the monthly payment they have to count, not just the balance. Each loan program has its own rule for that payment.
How does FHA count a $0 student loan payment?
HUD says if your credit report shows a $0 payment, the lender uses 0.5% of the outstanding balance.
Does Fannie Mae allow a $0 student loan payment?
Yes, if you're on an income-driven plan and your servicer documents that your required payment is $0.
What is the Repayment Assistance Plan?
It's a federal income-driven plan that opened July 1, 2026. The Department of Education says payments run between 1% and 10% of income, minus $50 a month per dependent.
Should I change my student loan plan before buying?
Talk to your servicer and a tax or financial pro about the plan itself. A loan officer can show you how each payment affects your mortgage qualifying.
Subject to eligibility, credit approval, and program guidelines. Programs can change.
Have a question about your situation?
Every file is different. I'm happy to look at yours, answer questions, and help you plan your next step. No pressure.
Get pre-approved or ask Andria a question at andriatownsend.com or call 480-487-9166.
About the author: Andria Townsend is a Mortgage Loan Originator with NEXA Mortgage, LLC, based in San Tan Valley, Pinal County. She's lived in Arizona for 15+ years and helps buyers and homeowners across the state.
Andria Townsend, Mortgage Loan Originator, NMLS #2154631. NEXA Mortgage, LLC, NMLS #1660690. Equal Housing Opportunity. This is not a commitment to lend. All loans subject to credit approval, underwriting, and program guidelines.
