- The Illinois SmartBuy program pays up to $ 40,000 in student loans to help buyers buy a home.
- The program also provides $ 5,000 to be used as input or closing costs.
- With house prices reaching record levels, the program can help increase the value and affordability of the home.
- See more stories on the Insider business page.
If you live in Illinois and have outstanding student loans, the state can pay off part of your debt to help you buy a home.
The SmartBuy program, offered by the Illinois Housing Development Authority, helps anyone who wants to buy a home in Illinois by paying up to $ 40,000 in student debt or a loan amount equal to 15% of the home’s purchase price. According to Chicago Tribune, between the beginning of the program in December and the beginning of April, he paid an average of $ 24,100 in student debt to each buyer, and people outside the state were even inclined to move there to make use of the program.
“I’m getting a lot of interest,” Chanon Slaughter, vice president of guaranteed rate mortgage loans, told the Tribune. “I’m getting people literally saying, ‘I want to go back to Chicago for this program.'”
Along with student loan payments, the program also offers $ 5,000 that can be used for an initial payment or closing costs.
However, there are some problems: the student’s outstanding student debt must be paid in full at the time of purchase of the home, and if the buyer chooses to sell the home within three years of the purchase, he must pay a portion of the student’s assistance. loans. The other problem is that Illinois has allocated $ 25 million to the program, so it should only help between 600 and 1,000 home buyers.
Here are the program’s eligibility requirements, according to your location on the Internet network:
- The buyer must have at least $ 1,000 in student loans;
- The buyer’s average “FICO score” must be 640 or higher;
- The buyer’s income must be below or within the county limits where the property is located, which can be found at IHDA mortgage website;
- And aid cannot be applied retroactively – the buyer must be buying a new primary residence.
This program has the potential to face two simultaneous accessibility crises – the $ 1.7 trillion student debt pile and the skyrocketing price of the average home since the housing market reopened during the pandemic, exacerbated by a severe shortage of stock. It is also not the only experimental economic program offered in Illinois. Evanston, a city in Illinois, approved spending on March 22 for a $ 10 million repair fund which compensated black residents through $ 25,000 housing subsidies.
Insider previously reported that the average selling price of a home hit a record high in March, and rising home costs have worried housing experts like Redfin Chief Economist Daryl Fairweather, who said in a demonstration that they could be putting their own home out of reach for many Americans.
“This means a future in which most Americans will not have the opportunity to build wealth through their own home, which will make inequality worse in our society,” said Fairweather.