New Mexico Administrative Code
Title 5 - POST-SECONDARY EDUCATION
Chapter 7 - TUITION AND FINANCIAL AID
Part 27 - NEW MEXICO EDUCATIONAL ASSISTANCE FOUNDATION ALTERNATIVELOAN FUND PROGRAM REGULATIONS
Section 5.7.27.13 - CREDIT CRITERIA
Universal Citation: 5 NM Admin Code 5.7.27.13
Current through Register Vol. 35, No. 18, September 24, 2024
A. Debt to income test:
(1) The debt to income ratio
shall not exceed forty percent.
(2)
Debt is defined as all monthly installment, revolving credit, mortgage
payments, or rent, and the anticipated monthly payment on the NMALF
loan.
(3) Income is defined as the
gross monthly income of the borrower or cosigner including salary, wages,
interest, dividends, pensions, self-employment income (less expenses),
commissions, and rental income. The documentation required to support the
income must include at least one of the following:
(a) prior year's signed tax return;
(b) prior year's W-2/1099, etc.;
(c) signed employment contracts;
(d) letter from CPA;
(e) the last two pay periods
paystub.
(4) If only one
spouse applies for an NMALF loan as either a borrower and/or cosigner, but
filed a joint tax return, there must be documentation to support the allocation
of income for the spouse who has applied.
Employment can be verified by:
(a) a current paystub;
(b) telephone call to listed employer to
verify employment.
B. Citizenship requirement: The borrower and/or cosigner must be a citizen or permanent alien resident of the United States. The lender will not obtain a foreign credit report.
C. Analysis of credit report: A minimum of one credit bureau report for each borrower and cosigner must be obtained.
(1) A responsible financial history pattern
must be demonstrated in the credit report by:
(a) minimum two year credit
history;
(b) no more than one
retail account rated sixty days or more delinquent, or no more than one bank
obligation rated thirty days or more delinquent;
(c) no more than two accounts can be rated
sixty days or more delinquent during the past two years;
(d) no record of a charged off account during
the past five years greater than $100.00 per charge off unless there is written
documentation demonstrating to the lender's satisfaction that the charge off
has been paid in full;
(e) no
record of foreclosure, repossession, open judgment, lawsuit, unpaid tax lien,
or unpaid negative public record in the past seven years unless there is
written documentation demonstrating to the lender's satisfaction that the
obligation has been paid;
(f) no
record of a bankruptcy in the past seven years. Exceptions may be granted where
there is written documentation demonstrating the circumstances leading up to
the bankruptcy were beyond the borrowers and/or cosigners control. Examples -
large medical expenses; unemployment due to being laid off, etc.
(g) no record of any educational loans being
delinquent or in default.
(2) If the borrower and/or cosigner provide
the lender with written documentation that any of the delinquencies or negative
credit information was either wrong or has been paid, that item will not be
automatic grounds for denial of a loan. The lender will use reasonable judgment
in determining if credit should be granted. The lender's decision to grant or
deny a loan is final.
D. Assets to liabilities: Assets must be at least equal to one hundred percent of liabilities.
E. Personal/professional stability: Demonstrated by:
(1) three years at current address;
or
(2) three years at past address;
or
(3) three years with current
employer; or
(4) three years with
past employer; or
(5) two years at
current address if homeowner rather than renter.
Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
