Democratic MPs Gregory Meeks (NY) and Nikema Williams (Ga.) Want student loan borrowers to buy a home and have passed the Making FHA Work for Borrowers with Student Debt Act 2021.
The bill requires the Federal Housing Administration (FHA) to treat student borrowers looking for an affordable mortgage through the FHA’s insurance program more fairly. The bill does this by reforming the FHA’s guidelines so that student borrowers, especially those participating in student loan repayment programs that lower their monthly obligations, are judged by their ability to repay a mortgage based on their monthly loans become.
The FHA does not currently consider a potential homeowner’s participation in an income-based student loan repayment plan when determining their debt for underwriting purposes. This will limit access to an FHA loan for low to middle income individuals who are paying off their loans.
Rep. Meeks said in a statement that the FHA unfairly treats many Americans considering they go to college to improve their lives and own a home in the future.
“This student debt penalty disqualifies home-ready borrowers from a program that encourages general home ownership,” Meeks said. “Under the current system, many young people, especially young people of color, are missing out on one of the greatest wealth-building opportunities because they are college educated. We should do everything in our power to encourage wealth creation and home ownership among young people and colored communities, and the elimination of this student debt penalty is an important step in that direction. “
Many Americans take out student loans to pay for college, but if they don’t finish or find a job to repay the loan, they usually won’t pay back the loans that will follow them for the rest of their lives and effectively get them off home ownership cut off which is one of the most trusted methods of wealth accumulation in the US
“In order to close the prosperity gap in the fifth district and in our country, young adults must have the opportunity to buy a home and make other investments in their future. Unfortunately, this is out of reach for too many as student loan debt is crushed. We must do everything in our power to remove the barriers to home ownership for those with student debt, “Williams said in a statement. “I am proud to help Congressman Meeks introduce this sensible bill to ensure that student loan borrowers get a fair assessment of their student debt when applying for a Federal Housing Administration-secured mortgage. I am proud to help shape this legislation to ensure that the next generation of homebuyers have a fair chance of getting mortgages approved and ultimately owning a home. “
Student debt is the third largest American debt at more than $ 1.5 trillion. President Joe Biden has put student loan payments on hold until October due to the coronavirus pandemic, but he still hasn’t disclosed his plans to deal with student debt.
Progressive Democrats like Sens. Elizabeth Warren (D-Mass.) And Chuck Schumer (DN.Y.) want Biden to get $ 50,000 off student loans. Biden has discussed giving out $ 10,000 in student loans. However, Biden left student loan forgiveness out of his budget, instead asking White House attorneys to consider the possibility of using a student debt forgiveness ordinance and directing the Department of Education into alternative options for dealing with forgiveness Find student loans.
source https://collegeeducationnewsllc.com/two-reps-introduce-bill-helping-student-loan-borrowers-to-buy-homes/
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