The cost of secondary education and the weight of student loans has for years been identified as an obstacle to homeownership. Sue Rossi, broker/owner of REMAX 2000 and a HIVE 2016 panelist, offered her solutions to the system via the HIVE conference last September and through her online articles. Now, others are putting similar ideas into practice.
Maryland is making a play for a generation of would-be homebuyers with one thing in common: student debt.
This week, the state rolled out Maryland SmartBuy, a $10 million program that lets people with education loans purchase a home and wipe out college debt at the same time.
“Traditionally, people in their 20s and 30s would account for a substantial share of Maryland’s first-time homebuyers, but we’ve seen a little difference in that demographic over the years, and it’s believed that student loan debt is a part of the challenge,” Lt. Gov. Boyd Rutherford said at an event to kick off the program.
SmartBuy uses an innovative model to clear a path to homeownership. If a buyer has at least 5 percent for a down payment, the state will provide up to 15 percent of the purchase price toward outstanding student loans. Any remaining balance must be paid in full by the closing date.
Say a buyer with $35,000 in student loans is interested in a $200,000 house. SmartBuy would cover $30,000 of that debt — an amount equal to 15 percent of the purchase price — leaving the buyer responsible for the remaining $5,000.