A new statewide program aims to help young adults saddled with student loan debt become first-time homeowners.
The Illinois Housing Development Authority’s $25 million SmartBuy fund will provide up to $40,000 per person to pay down student loans, according to Crain’s. The measure will help potential buyers secure a mortgage by lowering their debt-to-income ratios, according to the report.
The income limit to qualify in Cook County is $109,000 per person, and the program seeks to help about 500 to 1,000 people statewide buy homes. The $40,000 figure will also help ensure the program helps Black and Hispanic borrowers, whose student loans are closer to that amount; for white borrowers, the amount they generally owe is around $30,000.
SmartBuy comes amid a roiling national debate over what role the federal government should play in helping Americans with their student loan debts. Roughly 43 million people still owe $1.6 trillion in federal student loans, NPR reported last month, citing government statistics. President Joe Biden has opposed calls for him to sign an executive order to forgive up to $50,000 per person in student loans. He said could support a smaller sum, on the order of around $10,000.
SmartBuy began in January, and has so far helped nearly a dozen people buy a home, with dozens more on that path, officials said. Meanwhile, a National Association of Realtors survey of people 29 to 38 found that more than half cited student loan debt as the biggest obstacle in the path to homeownership, Crain’s reported. In the Chicago area, home sales continue to heat up and home inventory has been at a record low.
[Crain’s] — Alexi Friedman