Applying for FHA With a Debt in Forbearance? The Order Your Lender Must Follow

October 24, 2026

If you are applying for an FHA loan and one of your non-student debts is in deferment or forbearance, this page is written for you. You likely already know FHA counts debts. The question is which payment gets used when the debt has not started billing, and who decides.

A Quick Illustration

Picture Margaret, a fictional buyer near Aiken, SC. She is not a real client, just a common situation. Her installment debt is in forbearance and she assumes that because nothing is due, nothing is counted. The HUD 4000.1 passage on deferred obligations answers that directly.

The Ladder the Guideline Sets Up

Think of the guideline as a ladder with a required first step and a required fallback.

Step one is inclusion. The text reads: "The Mortgagee must include deferred obligations in the Borrower's liabilities." There is no option to skip the debt because payments have not commenced.

Step two is the actual payment. The text reads: "The Mortgagee must use the actual monthly payment to be paid on a deferred liability, whenever available."

Step three is the fallback, and it is specific to installment debt: "If the actual monthly payment is not available for installment debt, the Mortgagee must utilize the terms of the debt or 5 percent of the outstanding balance to establish the monthly payment."

The phrase "whenever available" is where your paperwork matters. If the actual payment can be documented, that is what the first rung calls for. The fallback is for when it cannot.

Three Misreadings to Avoid

Misreading one: "No payment yet means no liability." The passage defines deferred obligations as liabilities that have been incurred but where payment is deferred or has not yet commenced, including accounts in forbearance. The liability exists even if the billing has not begun.

Misreading two: "The student loan rules apply to everything." The passage is labeled as excluding student loans. Those follow their own guidance, so do not assume what you heard about a student loan carries over to a car loan or any other installment debt.

Misreading three: "5 percent of the balance is always the number." It is not the first choice. The guideline reaches the terms of the debt or 5 percent of the outstanding balance only when the actual monthly payment is not available for an installment debt.

What to Put in Writing

Because the rung that gets used depends on what is available, make it visible. Ask the loan officer this, exactly:

"I have a debt that is deferred or in forbearance. What monthly payment are you using for it in my qualifying, and is that the actual payment?"

Then do one of two things. Request a written creditor statement showing the actual monthly payment, or ask in writing whether the lender is using the terms of the debt or 5 percent of the outstanding balance. Either way you leave with an answer you can read, not a recollection of a phone call.

Timing

Do this before you write an offer. A debt that was invisible in your own budget can become a real line in your qualifying, and learning that before you commit gives you room to plan.

Talk It Through

I am Jason Sharon, a licensed mortgage broker, and I find the path. If you want to go through how your deferred debt may be counted, call 843-LOW-RATE.

Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.