According to The Institute for College Access & Success, about 65% of college seniors who graduated in 2017 had student loan debt. In Maryland, the average amount of debt was $29,314. Many potential homebuyers think with a mound of student debt it will be nearly impossible to purchase a new home. Luckily, there are options for those with debt to buy homes. The Maryland Mortgage Program created the SmartBuy 2.0 program, which helps qualifying homebuyers pay off student debt during the purchase of their home.
The terms are pretty simple.
You must have a minimum existing student debt of $1,000 and the loan must be in your name. The program offers up to a maximum of $40,000 in financing to be used towards paying off your debt. The full, outstanding balance of the student debt must be paid off as part of closing; partial loan payment is not permitted. The student loan may be in repayment or deferred status.
Financing for student debt relief will be in the form of a 0% interest, deferred loan with no monthly payments. The loan is forgivable over 5 years; meaning if you are still living in the property after 5 years, your debt is forgiven, repayment is not needed. If you choose to sell or refinance the property within 5 years, the remainder of the student debt loan will be due.
This is a great program to utilize if you are a first-time homebuyer and have accrued student loans over the past few years. Contact one of our loan officers today to see if you qualify.
*Student debt information pulled from the Institute for College Access & Success website: https://ticas.org/posd/home