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Buying a home represents one of the largest purchases most people make in their lifetimes and can be even more challenging for someone attending college. College students can still qualify for a mortgage loan. However, you’ll need to meet the same criteria from mortgage lenders as other borrowers, including having sufficient income to afford the payments, proof of employment, and a solid credit history.
Buying a home can offer financial benefits since, as a student, you can live in your own home during your college years or rent it out while living in the dorms. Discover the benefits of buying a home as a college student and the costs and qualifications that must be considered before becoming a homeowner.
Key Takeaways
- College students can qualify for getting a mortgage.
- You’ll need a strong credit score, access to a down payment, employment and/or income, and a low debt-to-income (DTI) ratio to qualify for a mortgage.
- If you buy a home but live in the dorms, you could rent out your home for income.
- FHA loans offer low interest rates and low down payment requirements.
- You may need a co-signer for the bank to approve you for the loan.
The Costs of Homeownership
According to the St. Louis Federal Reserve Bank research department, the median sale price for a home in the United States is $414,000 as of April 2025.
However, home prices can vary dramatically from region to region. For example, if you attend the University of Cincinnati, you may find a more affordable home than if you attend New York University and seek an apartment in New York City.
In some regions, it may even be possible to buy a home with rooms you can rent out to other students for some extra income. This may end up being cheaper than paying for four or more years of dorm living and can help you fund your mortgage payments. If you leave the area after graduation, you can sell the house or keep it as a source of rental income.
Do You Qualify for a Mortgage?
Like anyone else, you’ll still need to qualify for a mortgage. Unless, of course, you have a handy inheritance or wealthy parents. But let’s face it, most of us don’t fit into that category.
Just because you’re a student doesn’t mean you won’t qualify. However, you will still need to meet the same criteria as anyone else to get a mortgage. You must be at least 18 to apply for a loan and purchase a home (or older in some states).
Most mortgage lenders, banks, and credit unions require a good credit score and enough income to qualify. No matter the kind of home you purchase or the type of mortgage loan, you’ll need to be gainfully employed or at least have a form of steady income.
You must also have a fairly low debt-to-income (DTI) ratio. You’ll also need to make a down payment, which, for a conventional mortgage, can be as much as 20% of the total purchase price.
As an example of the costs associated with buying a home, listed below are the likely costs of buying a $300,000 home:
- Purchase price: $300,000
- 20% down payment: $60,000
- Monthly payment for a 30-year fixed-rate mortgage at 6.387% interest rate: Principal + Interest + Property Taxes + Insurance = $1,952
If the above example is out of your price range, other options exist for students seeking a home mortgage.
Important
Don’t buy a home if it doesn’t make financial sense, especially if you’re a student.
Home Buying Programs
Several programs are available to assist with buying a home, depending on your state, whether you’re a first-time homebuyer or a veteran.
HUD
The U.S. Department of Housing and Urban Development (HUD) is charged with creating strong communities with affordable housing for everyone. Established in 1965, the government agency improves homeownership opportunities at more affordable levels. HUD offers a wealth of resources and special programs for first-time homebuyers. It also provides homebuyers with state-specific programs for anyone looking to buy a home.
FHA Loans
The Federal Housing Administration (FHA) provides mortgage insurance on loans made by special FHA-approved lenders under the HUD umbrella. Because of the government guarantee, these lenders are willing to make FHA home loans with lower down payments. Unlike conventional mortgages, you may qualify for a loan as a student with a down payment as low as 3.5% of the purchase price, depending on the state you reside.
FHA loans may also offer a low fixed interest rate that may allow you to finance as much as 96.5% of the purchase price of the home. This helps reduce costs like closing costs and lower your mortgage payments. Plus, you may qualify for the 203(b) home loan, which allows you to fund 100% of the closing costs from a gift from a relative, government agency, or a nonprofit. You can look up the FHA mortgage parameters on the HUD website.
Tip
If you’re a veteran, service member, or an eligible surviving spouse, you may qualify for a VA mortgage loan, which is partially guaranteed by the U.S. Department of Veterans Affairs. As a result, you can often get a home loan without a down payment.
Impact of Student Loans
If you have student loans, you can defer payment on the debt while you’re in school, which means you can reduce your overall debt load as a student. So, it’s possible that when your lender calculates your debt-to-income ratio to determine if you can afford a mortgage, future student loan payments may not be factored into the equation.
On the other hand, paying your student loans in a timely manner can help create a positive credit history. You may want to consider using one of the income-driven repayment plans offered by the Federal Student Aid office, which reduces your monthly loan payments. Some federal student loans are eligible for one of these plans.
Consider a Co-Signer
If you’re a part-time student and have a job or a working spouse, you may have enough income to qualify for a modest loan. However, if you lack sufficient income, you may still qualify for a mortgage with a co-signer.
A parent, guardian, or significant other may typically be able to co-sign the mortgage loan if that person has sufficient resources, income, and a satisfactory credit profile. The co-signer on a loan doesn’t receive the loan proceeds but is liable for repayment if you fail to make loan payments. So, it’s critical that you keep up to date with your payments to avoid damaging the relationship.
I Am a College Student, Can I Get a Mortgage?
Will My Student Loans Impact Getting a Home Loan?
Your student loans are part of your debt-to-income (DTI) ratio, which lenders consider as one of the key factors when qualifying for a loan. If you have a sizeable amount of student debt, taking on additional debt, even in the form of a mortgage, could put you at risk of defaulting on either loan.
Can You Use Student Loans to Buy a House?
It isn’t advisable to use student loan money for anything other than your educational expenses. If you are reported to the U.S. Department of Education, you could be ordered to repay your student loans immediately. Also, lenders will ask you to document your financial records, which would likely show an influx of cash from a student loan.
The Bottom Line
College students can qualify for getting a mortgage. However, you’ll need a good credit score, a down payment, sufficient income, and a low debt-to-income (DTI) ratio to qualify. FHA loans offer a low down payment and lower interest rates. If you can’t qualify, consider a co-signer to help you get approved.
Be sure to consider the costs associated with buying a home, which includes realtor commissions, taxes, fees, and home improvements. If you own the home for a long time, you can recoup the costs as your home value appreciates, but if you sell it in a few years, you may take a loss. Before buying a home, carefully evaluate your lending options and seek the help of a financial expert.
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