Can you get a mortgage as a student — or with student loans?

Research shows student loans have a profound impact on consumers becoming homeowners. A Lumina Foundation-Gallup study published in 2024 found that 29% of student loan borrowers had put off buying a home because of their loans. There are barriers to entry, namely student loan debt, limited credit profiles, and lack of full-time employment. Still, mortgage loans for college students are possible. 

How being a student impacts your ability to get a mortgage

It is possible to get a mortgage if you’re a college student, but there are some potential roadblocks: 

• Thin credit history: College students typically have little credit history because they haven’t yet had years of lending experience. This can lead to a lower credit score, inhibiting getting a mortgage.
• Fewer savings: Overall, college students are younger, meaning they might have less earning power and less money saved than someone older applying for a mortgage.
• Lack of full-time employment: It’s rare for a college student to be in school and working full-time. Typically lenders like to see two years of work history and a track record of consistent income.

How student loans affect your eligibility for a home loan

If you’re a student with student loan debt, getting a mortgage is still possible. However, it’s important to understand how your student loans might impact your mortgage eligibility.

There are specific credit factors that lenders will review when you apply for a mortgage loan:

• Debt-to-income ratio (DTI): Calculate your DTI by dividing all your monthly debt payments by your gross income. Fannie Mae requires a DTI of 45% or below. Lenders will consider your current debts — such as student loans, credit cards, and car loan payments — in addition to a potential mortgage payment when they calculate your DTI.
• Credit score: Credit scores typically range from 300 to 850, with a “good” score being around 670 and above. If students don’t have other forms of credit like credit cards or car loans, they might have a low credit score due to their relatively thin credit profile. Mortgages that conform to Freddie Mac and Fannie Mae guidelines require you to have a credit score of 620 or higher. 
• Employment: Mortgage lenders like to see a history of steady employment; Freddie Mac guidelines call for two years of employment history. They also factor income into your DTI ratio. 

How to improve your home loan application

If you want to apply for a home loan as a student, consider the following:

Manage your student loans

• Adjust your repayment plan: If you have federal loans, you have several repayment plan options that can potentially lower your monthly payment and improve your DTI.
• Refinance your student loans: Another option is refinancing your student loans to a lower interest rate or longer term. A lower monthly payment can also lower your DTI.
• Increase your income/decrease your debt: Another way to improve your DTI is to pay off some of your debt or work hard to increase your income. This step could take time but positively impact your ability to secure a mortgage.

Manage your potential mortgage

• Aim for a lower-cost home: The median home price in the U.S. is above $420,000. If you don’t qualify for the mortgage you want, consider shopping for a lower-cost home. You can upgrade to a larger home later in life. 
• Get a cosigner on a home loan: If you don’t meet eligibility requirements, you can ask a family member or friend to cosign your mortgage loan.

Types of home loans for borrowers with student loans

Several different mortgage programs are available for students or consumers with student loans:

FHA loans

The Federal Housing Administration insures these loans, which are designed to help first-time homebuyers qualify for a mortgage. FHA loans offer low down payments, low closing costs, and less restrictive credit qualifications. If your credit score is 580 or higher, you can qualify with a down payment as low as 3.5%; if your score is 500 to 579, you’d need a 10% down payment. 

Freddie Mac programs

Freddie Mac offers programs called Home Possible and HomeOne, which help first-time homebuyers purchase a home with a down payment as low as 3%.

Fannie Mae programs

Fannie Mae offers a homeownership program called HomeReady, which lets borrowers get a mortgage with as little as 3% down using nontraditional income sources, including gifts and grants.

State assistance programs for graduates 

Several states offer programs to help consumers buy homes and simultaneously pay off student loan debt. 

Maryland

The Maryland Smartbuy 3.0 program is designed to help consumers with student loan debt buy a home. It offers payment assistance toward student loans in the form of a zero-interest second loan that is forgivable after five years.

Kansas

Kansas offers a program called Rural Opportunity Zone, where those with new addresses in targeted counties can get up to $15,000 in student loan repayment assistance.

Ohio

The city of Newburgh Heights offers the Student Loan Assistance Grant Program to help pay off some student loans. If you meet program requirements, you can receive a grant worth 50% of your student loan debt — up to $50,000. 

How to find the best mortgage lender for your home loan

Not all home loan programs are the same. Some lenders might be a better fit for your situation than others; they might have different requirements or types of loans. Consider the following as you shop for your lender:

• Research programs in your state: Look for down payment assistance and mortgage programs for first-time homebuyers in your state. 
• Compare lenders: It’s important to get quotes from three to five different lenders to compare interest rates and terms.
• Ask questions: If you don’t qualify for a mortgage immediately, speak to the mortgage brokers who denied your application. Ask them how you can improve and better prepare to apply for a mortgage in the future.
• Improve your credit score: College students and recent graduates typically have lower credit scores. However, there are many ways to improve it. You can work on raising your credit score by making payments on time and keeping your consumer debt low. Not only can it help you qualify for a mortgage, but it can also help you secure a lower interest rate, too.

It’s possible to buy a house as a college student or a recent graduate with student loan debt. However, be aware that lenders will examine your income, credit scores, and DTI to decide whether to approve your mortgage loan. You can take steps to improve these areas over time, which can help you qualify for a mortgage.