How to Buy a Home Even with Student Loan Debt

Your Insider’s Guide to Smart Home Buying

Exclusive 8-Week Series

Worried your student loan debt is blocking you from homeownership? You’re absolutely not alone.
A lot of first-time buyers feel like owning a home is off the table because of student loans. But here’s the good news: having student debt doesn’t automatically disqualify you. Many homebuyers do have student loans and still make homeownership happen.

So don’t assume you’re stuck in neutral. Instead, explore ways to work with a lender and tap into assistance programs that make your first home purchase more realistic, even with student loans in the mix.

We’ll walk through how lenders view student loans, how your debt-to-income ratio (DTI) matters, and highlight some programs available in the Atlanta market. Also, remember: you’ll want to check with a financial advisor for your unique situation.

How Lenders Look at Student Debt

Let’s break it down simply. When you apply for a mortgage, the lender will check your debt-to-income ratio (DTI). That’s basically: how much debt do you pay monthly vs. how much income you bring in. For lenders, DTI concerns often matter more than your credit score or down payment amount.

Here’s how it works:

• Lenders look at your recurring debts, things like your car payment, credit cards, and your student loan payments, and compare that to your income.
• A commonly used guideline is the 28/36 rule:
  • 28% front-end ratio: your monthly housing costs (principal + interest + taxes + insurance) divided by your gross monthly income shouldn’t exceed ~28%.
  • 36% back-end ratio: your total debt payments (housing + all other debts) divided by your gross monthly income shouldn’t exceed ~36%.
• The key takeaway: Even if your student loans are large, what matters is what you are currently paying/monthly, and whether that fits within your income. A lender’s focus is your ability to carry the mortgage payment plus other obligations.
• So yes: good credit helps, but you won’t qualify for a loan just because your debt is high. It’s whether your monthly payments are manageable relative to your income.

How to Lower Your DTI

If your student loans or other debts are making your DTI too high, here are some proactive steps to consider. (As always, check with a financial advisor before making big moves.)

Student‐loan options:

• Graduated repayment plan: lower monthly payments now, increasing as your income hopefully grows.
• Consolidation: combine multiple student loans into one to simplify and potentially lower interest.
• Extend the repayment term: more years = lower monthly payment, but more interest over time, weigh the trade-offs.

Other debt/financial moves:

• Increase your income: side-job, gig, part-time work, every bit helps your income side of the ratio.
• Avoid new large debt: e.g., don’t finance a car if you can avoid it; consider public transit or car-sharing for now.
• Lower existing payments: negotiate lower minimums on credit cards if possible; pay off high-interest debts first.
• Save money: a bigger down payment can help your approval odds, even if you have student loans.

Shopping for a Lender

With student loans in the picture, you’ll want to work with a mortgage lender who gets how those loans factor into the equation.

Key tips when choosing a lender:

• Make sure the lender uses your current monthly student-loan payment (or income‐driven payment) in the DTI calculation, not just the full loan balance. Many good lenders do; some less experienced ones don’t.
• Find lenders who participate in local down-payment or homeownership assistance programs (we’ll cover some below in Atlanta).
• Be open about your student loan status early deferment, in-repayment, income-driven plan, etc. because that can affect how your debt gets counted.
• Get pre-qualified so you know your realistic budget and what kind of home and mortgage you can afford even with student loans.

Local Programs in Atlanta, Georgia That Can Help

While Georgia doesn’t have the same specific student loan programs as some other states, there are excellent resources available for first-time homebuyers in the Atlanta, Georgia area – and many of you have student loans. Here are some programs specifically that first-time homebuyers should know about.

Georgia Dream Homeownership Program (Statewide)

• This program through the Georgia Department of Community Affairs (DCA) offers affordable mortgage financing + down-payment/closing-cost assistance. Georgia.gov+1
• For example: up to $10,000 in down payment assistance as a zero-interest second loan, repayable only if you sell, refinance, or stop using the home as your primary residence. The Mortgage Reports+1
• Newly expanded: the “Peach Advantage Loan Program” (effective July 2025) offers down payment assistance of 2% to 5% of purchase price, reduced interest rates, and allows a minimum down payment of zero to three percent. Georgia Department of Community Affairs
• Good for Georgia broadly; you’ll need to work with approved lenders and meet income, purchase price, and other eligibility rules.

Invest Atlanta Homebuyer Programs (City of Atlanta)

• If you’re buying in the city of Atlanta, this local agency offers strong incentives. investatlanta.com+1
• Examples:
  • Vine City Renaissance Initiative (VCRI): up to $20,000 toward down payment & closing costs, fully forgiven after 5 years of ownership, for qualified purchasers in Vine City neighborhood. investatlanta.com+1
  • ATL HomeNow: up to $20,000 assistance for down payment/closing costs/interest rate reduction, with certain income/asset guidelines. investatlanta.com+1
• These programs require: using a participating lender; homebuyer education; living in the home as your primary residence; property limits; sometimes purchase-price caps; and income/asset thresholds. investatlanta.com+1
• Importantly: these incentives can significantly reduce your up-front costs, which helps when student loan payments limit your savings for a down payment.

Atlanta Housing Authority Down Payment Assistance Program (City of Atlanta)

• This program offers up to $20,000 in down-payment assistance (and up to $25,000 for eligible buyers in public safety, healthcare, education, veterans) when purchasing within the City of Atlanta. Atlanta Housing
• Requirements include: home must be your primary residence, you must complete a homebuyer-education class, income and asset limits apply, property price cap ($375,000 as example) and you must be a first-time homebuyer (or not owned property in last 3 years) in many cases. Atlanta Housing
• This is great when paired with a strong lender and mortgage product, especially if your student loan payments are manageable but you don’t have a huge down payment saved.

Fulton County Homeownership Program (HOP)

• Applicable if you’re buying in Fulton County (outside or inside City of Atlanta, depending on property). Fulton County Government
• Assistance: Up to 7.5% of the sales price, not to exceed $22,500, for down payment/closing/interest-rate buydown support. Fulton County Government
• No monthly payment second mortgage; forgiven if you stay in the home for the specified affordability period. Fulton County Government
• Income limits: vary by household size (example: 1 person ~$63,950; 4 persons ~$91,350) in a recent listing. Fulton County Government
• Why this is relevant: If your home purchase is in Fulton County rather than strictly the city limits, this gives extra options beyond just city programs.

Homestretch Down Payment Assistance Program (Gwinnett County)

• If you are buying in Gwinnett County, this is a very good option. Gwinnett County
• Assistance: Up to $10,000 in a five-year deferred payment loan with 0 % interest. Forgiven if you stay in home for at least 5 years. Gwinnett County
• Eligibility: First-time homebuyer (or no home ownership in last 3 yrs); income below ~80% of Area Median Income; property type and purchase price caps apply (e.g., existing home price cap ~$349,000, new construction ~$410,000). Gwinnett County
• Why good: Lower amount than some city programs, but it works well if you’re in that county and want simpler criteria.

FHLBank Atlanta First-Time Homebuyer Product & Related DPA

• A regional bank funding partner offering down payment and closing cost assistance via member financial institutions. corp.fhlbatl.com
• Assistance up to $17,500 for first-time homebuyers; other products for first responders/education/healthcare providers up to ~$20,000. corp.fhlbatl.com
• Why it’s relevant: These funds can often be layered with other programs if your lender participates which is helpful for increasing your down payment buffer when you have student loans.

Important note about student loans + local programs:
While these programs don’t all specifically target student-loan debt, many of them work in parallel with student-loan-carrying buyers, so long as your DTI is within acceptable range and you meet other eligibility rules. For instance, one FAQ from Invest Atlanta states: “Student loans are considered by the Participating Lender when determining qualification for a mortgage.” investatlanta.com
In short: Having student loans doesn’t disqualify you from these programs, but you’ll need to make sure your lender handles your student-loan payments properly in their underwriting and that you meet all other program criteria.

Are You Ready?

Even with student loans, you can be ready for homeownership. Ask yourself:

• Do you have a steady income with potential to grow?
• Are you expecting to stay in the Atlanta area (preferably for 5+ years)?
• Are you making your student-loan payments on time (or have a clearly manageable payment plan)?
• Are you working to keep your DTI within a reasonable range (including your student-loan payment)?
• Are you saving toward a down payment/closing costs and exploring local assistance programs?
• Are you flexible about what your first home might look like (maybe a townhome instead of a large single-family home, or in a neighborhood that’s up-and-coming)?

Your degree and student-loan investment didn’t lock you out of homeownership, they’re just factors to plan around. Buying your first home takes time, diligence, and the right strategy. But this first home could be a stepping stone if you do it right, you’ll position yourself to move up in future years when your finances are stronger.

What’s Next

Let’s get together and map out a game plan:

• We’ll review your income, student-loan payment, savings and credit profile.
• Find a lender who knows how to work with student-loan borrowers in Atlanta.
• Explore which down payment/assistance programs you qualify for in Atlanta.
• Pick a realistic price range and home type for your first purchase so you’re not stretching too far.
• Start that homebuyer education and get pre-qualified so you’re ready when the right home hits the market.

Don’t let student loans block your home-buying dreams. With the right strategy and local program help, you could turn them into a path toward homeownership, not a barrier. In many cases, homeownership has helped people pay off student loans faster through gained equity, but let’s focus first on getting the first home right.

Next week: our final piece in this series, “Why Buying a Home Is Like Falling in Love”  you won’t want to miss it.