First-time homeowners could get $40,000 worth of student loan debt forgiven under proposal

WITH families spending more time indoors, and fewer families wanting to sell, the housing market has tightened considerably during Covid.

Maine lawmakers are trying to do something about it. A new bill would entice more young people to buy in the state.

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Homeownership remains a challenge for millions of young Americans

What is being proposed?

The state is considering a proposal that would forgive up to $40,000 in student loan debt for first-time homebuyers.

Specifically, it would provide a one-time payment on mortgages to first-time homebuyers who can show they still have student loan debt.

The buyers would then show proof of their Maine State Housing Authority loan to receive student debt forgiveness.

The bill was proposed on Tuesday, February 22, 2022.

The Maine State Housing Authority, which testified on Tuesday, did not take a position for or against it.

Is the bill likely to pass?

This remains to be seen, as lawmakers seem indifferent.

Erik Jorgensen, senior director at The Maine State Housing Authority, said: “Given the large quantities of student debt among college graduates today, the program would likely experience demand well in excess of available funding.”

On the other hand, Democratic Senate President Troy Jackson testified in favor of the proposal.

Jackson said lawmakers “have an opportunity to attract and retain young people by supporting a program that increases homeownership and provides student debt relief”.

Who would qualify for the relief?

Not a lot has been outlined in terms of who will qualify.

It is still unclear if there would be a minimum student loan level required of applicants.

We also do not know if there will be other conditions attached to the loan.

Is home ownership out of reach for young Americans?

Homeownership is a dream for millions of Americans, but is out of reach for many.

It doesn’t help that prices in the housing market have skyrocketed since the beginning of the coronavirus pandemic.

There have been several different proposals to help young Americans break into homeownership, like this rent-to-own program.

One big challenge to owning a home is coming up with the down payment.

It is still possible, through a range of federal programs, for those with little or no cash for a downpayment to become homeowners.

The U.S. Department of Agriculture (USDA), Federal Housing Authority (FHA), and Department of Veterans’ Affairs (VA), all provide programs to supplement first-time buyers.

We also explain the states giving mortgage and bill support worth up to $80,000.

Plus, how to get mortgage relief through a federally-backed refinance program.

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