Homebuyer Programs

H O M E B U Y E R
P R O G R A M S
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HOMEBUYER
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About Student Loan Ranger
Student Loan Ranger helps
prospective and current students
and recent graduates make sense
of borrowing options, student debt
and loan repayment. Previously
authored by the nonprofit American
Student Assistance, the blog is
currently authored by the National
Foundation for Credit Counseling, a
nonprofit financial counseling
organization. Through its national
network of certified counselors, the
NFCC empowers consumers
tackling student loans, credit card
debt and other money matters.
Evidence showing that student loan debt is
affecting the housing market continues to pile up
– but so are tangible solutions for borrowers.
According to the recent joint study by the
National Association of Realtors and American
Student Assistance – full disclosure, ASA
authors the Student Loan Ranger – most
millennials who carry student debt today do not
own a home, and they typically expect to wait
seven years to buy one, thanks to their student
loans. Most cited the inability to save for a down
payment as the cause for the delay.
Meanwhile, among millennials who do own
homes, 28 percent say student debt is holding
them back from selling their existing home and
buying a new one. The average delay for
homeowners to buy a new home, because of
their student debt, is three years.
The study, which surveyed millennials born
between 1980 and 1998, found a median debt
load of $41,200 but a median annual income of
only $38,800. And similar to the results of
multiple other reports in recent years, this study
showed that student debt delays borrowers'
other personal finance decisions, like starting a
family or business or saving for retirement.

Now those directly affected by millennials' slow entry into the housing market
are starting to take notice.
Lennar Corp., a homebuilder based in Florida, and its subsidiary Eagle Home
Mortgage recently unveiled its Student Loan Debt Mortgage Program to help
free up student loan borrowers' budgets so they can afford a home. Under the
program, Lennar will direct up to 3 percent of the home purchase price to repay
up to $13,000 of the borrower's student loans for those purchasing a brand new
home from the company.
Down payments can be as low as 3 percent, but potential buyers must meet
credit and income requirements. The program aims to benefit millennials and is
not intended for parents who borrowed for their children's education.
Skeptics are wary that programs like Lennar's will drive up home prices
because the seller or lender will simply turn around and build the student debt
contribution into the purchase price, although Lennar states in its
announcement that those funds do not increase the home's price or the
mortgage loan amount.
Interested student loan borrowers should examine offers like these carefully to
make sure a home's price hasn't been artificially inflated – you don't want to just
exchange student loan debt for home debt. But at the same time, this is a
positive step forward that players not typically associated with student loan debt
– like homebuilders – are developing creative fixes to ensure student loan
borrowers can still purchase a home.
Homebuilders and lenders aren't the only ones stepping up to the plate, either.
As we noted recently, Fannie Mae and the Federal Housing Administration
have made changes to the rules surrounding debt-to-income ratios that benefit
student loan borrowers on income-driven repayment plans; borrowers who have
their student loans paid by a third party, like their parents or employer; and
borrowers who may want to pay off their education loans with home equity.