Published by REALTOR Magazine | April 16, 2021
There are eligibility requirements and caps that young pros will have to meet.
Young professionals on the hunt for a new location may find incentives from states—even offers to pay off their student loan debt in exchange for purchasing a home.
Illinois and Maryland recently launched “SmartBuy” programs that will pay off student loan debt for young adults who get a mortgage in the state.
Sound too good to be true? There are eligibility requirements and caps that young pros will have to meet.
For example, Illinois is offering to pay up to $40,000 in student loans or a student loan balance that is 15% of the home purchase price, whichever is lower, Forbes.com reports on the program. The program is also providing up to $5,000 toward the down payment or closing costs. But the purchase price of the home is capped depending on the geographic location and some other factors. The upper limit is between $325,000 to about $500,000. In the Chicago area, eligible homeowners also must have a household income of no more than $109,200.
One potential obstacle to getting this deal: The $40,000 in debt relief must help pay all the student debt with the purchase of the home. No partial payments are allowed. If the home buyer owes more than $40,000, borrowers must pay off the remaining balance themselves. The goal is to help the young homeowner be free of student loan debt when they take on the mortgage.