Student loan payoff program draws homebuyers to Illinois
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Illinois is drawing homebuyers to the state with a $25 million SmartBuy program that helps pay off student loans and provides a loan of $5,000 for a down payment or closing costs.
So far, 26 people have bought homes through the program among nearly 200 who enrolled between Dec. 1 and late March, the Chicago Tribune reports. The SmartBuy program is being offered by the Illinois Housing Development Authority.
Lawyers are among those impacted by high student loans. More than 55% postponed or decided not to buy a house because of student debt, according to a 2020 survey report by the ABA Young Lawyers Division.
None of the people interviewed by the Chicago Tribune indicated that were lawyers. But those interviewed said they wouldn’t have been able to buy homes at this time without participating in the program.
The Chicago Tribune explained the requirements. The program pays off up to $40,000 of student debt, or 15% of the home purchase price, whichever is lower. Eligibility in the Chicago area is limited to people with household income at or below $109,200. The home purchase price is capped at between $325,000 and more than $500,000, depending on location and type of home. The mortgage interest rate is set by the Illinois Housing Development Authority.
The home has to be a primary residence. All of one borrower’s student debt must be paid off at purchase. Those who sell their homes within three years have to repay part of the loan assistance, based on how long they have lived in the home, and will have to sell to another person who meets income requirements at a price within the program limits.
The Chicago Tribune spoke with some lenders, who said they were getting interest in the program from out-of-state residents.
“I am getting folks literally saying, ‘I want to move back to Chicago for this program,’” said Chanon Slaughter, a vice president of mortgage lending at Guaranteed Rate.