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    Student loan debt is making it harder for Americans, especially younger ones, to become homeowners. Among individuals ages 24 to 32, homeownership fell from 45% to 36% between 2005 and 2014, according to the Federal Reserve.

    Sure, there are several different factors that play into the rate of homeownership — but the Fed noted that about one-fifth of the decline was tied directly to student loan debt.

    With total student loan debt in the US reaching approximately $1.5 trillion in 2019 and 44.7 million borrowers carrying that debt, coming up with the funds to buy a home can feel nearly impossible for some people.

    How Maryland is helping homeowners pay off student debt

    Maryland launched the SmartBuy program back in 2016 as a way to help homebuyers eliminate their student debt. The state Department of Housing and Community Development reports that since then, homebuyers have been able to pay off $7 million in student loan debt as of 2019. The program is responsible for the purchase of 216 homes with mortgages totaling more than $47 million.

    After the initial success of the SmartBuy program, Governor Larry Hogan extended it in 2018. The current version of the initiative is called SmartBuy 2.0. The pilot was restricted to buyers purchasing foreclosed, state-owned homes, but SmartBuy 2.0 removed that requirement.

    Maryland SmartBuy 2.0: The details you need to know

    For those thinking about buying a home in Maryland, SmartBuy 2.0 could be a good option if student loan debt is part of the affordability equation.

    Here are some of the highlights:

    • The home being purchased must meet Maryland Mortgage Program guidelines
    • Student debt minimum balance of $1,000 required
    • Student debt relief is 15% of home purchase price
    • Maximum payoff of $40,000
    • Full student debt must be paid off at the time of the home purchase
    • SmartBuy 2.0 is a second lien obtained in conjunction with a Maryland Mortgage Program first mortgage

    The program does have very specific requirements, though, so be sure you speak with your loan officer to find out if you qualify. Find an Embrace loan officer in Maryland now.

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