Fannie Mae: Parents Paying Your Loans? No Problem!

[Clay Manship]

I think this article speaks to many different current happenings in the residential real estate space across the country. http://www.latimes.com/business/la-fi-home-buyers-student-debt-20170506-story.html To sum it up, Fannie & Freddie are making it easier for millennials to buy homes. Deserved or not. My two biggest takeaways: 1. If your monthly student debt payment is $500, and you have your debt temporarily restructured to accommodate your current salary/lifestyle to, say, $100/month, only the $100 per month will count towards DTI RATIO. NOT the full $500/month that is actually due. 2. If you can verifiably prove that someone is paying your bills on your behalf, from student loans, to cars, to credit cards--THIS WILL NOT COUNT TOWARDS YOUR DTI RATIO. Am I out of my mind? Has the world gone completely mad? How on earth can this provide a sound underwriting and/or investment decision? Sounds like a temporary value hike, with longer term ramifications once the consequences of these investment decisions are revealed. Stop the madness...