Pro­gram tar­gets home­buy­ers sad­dled with stu­dent loans

Baltimore Sun - - COLLEGE FOOTBALL - By Natalie Sher­man nsh­er­man@balt­sun.com

Mary­land has launched a new pro­gram that will pay off stu­dent loan debt for home­buy­ers who pur­chase cer­tain prop­er­ties through the state.

The De­part­ment of Hous­ing and Com­mu­nity De­vel­op­ment SmartBuy pro­gram is aimed at help­ing buy­ers bur­dened with stu­dent loans. It also re­duces the in­ven­tory of homes ac­quired by the state’s Com­mu­nity De­vel­op­ment Ad­min­is­tra­tion af­ter fore­clo­sures on prop­er­ties pur­chased us­ing the Mary­land Mort­gage Pro­gram.

The de­part­ment has al­lo­cated about $10 mil­lion to the SmartBuy pro­gram, en­abling about 40 to 50 house­holds to par­tic­i­pate, said DHCD spokes­woman Sara Luell. The first sale through the pro­gram, a $200,000 three-bed­room home in Bel Air, closed in Septem­ber dur­ing a soft launch, she said.

To par­tic­i­pate, a qual­i­fied buyer must make a down pay­ment of at least 5 per­cent, fi­nanc­ing the rest of the pur­chase with a mort­gage through a selected lender.

A buyer’s out­stand­ing stu­dent debt is paid off at the time of the pur­chase, through a sec­ond mort­gage with a zero per­cent in­ter­est rate. That loan — which can be no more than 15 per­cent of the sales price — is for­giv­able over five years.

“With the launch of SmartBuy, Mary­land is among the first in the na­tion to ac­tively ad­dress stu­dent debt as an ob­sta­cle to home­own­er­ship,” Lt. Gov. Boyd Rutherford said in a state­ment.

The15 homes cur­rently avail­able through the SmartBuy pro­gram are lo­cated through­out the state and range in price from $70,000 to about $310,000, ac­cord­ing to the web­site.

The Gen­eral As­sem­bly au­tho­rized the SmartBuy pro­gram this year at the re­quest of the Gov. Larry Ho­gan’s ad­min­is­tra­tion, ex­pand­ing on other Mary­land Mort­gage Pro­gram of­fer­ings for home­buy­ers with stu­dent loan debt. The Mary­land Mort­gage Pro­gram is funded pri­mar­ily through sec­ondary mar­ket sales of Gin­nie Mae and Fan­nie Mae mort­gage-backed se­cu­ri­ties, ac­cord­ing to the pol­icy note that ac­com­pa­nied the bill.

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