A recently proposed Bill in Ohio is likely to help more homebuyers achieve their dream of homeownership. Senate Bill 334, which was introduced in the Ohio Senate in November is likely to help around 400 low- to middle-income families afford housing by canceling out much of their student loan costs, according to Ameritech Financial. These provisions in the Bill are also aimed at encouraging college and vocational school graduates stay in the State.
“Too many Ohioans who are saddled with student loan debt aren’t buying homes and that is hurting their future financial prospects, contributing to brain drain and stifling our housing market,” said Sen. Joe Schiavoni, who introduced this Bill in the Ohio Senate. “The plan will incentivize new graduates to stay here in Ohio and will stabilize neighborhoods at the same time.”
According to a statement by Schiavoni, homebuyers would be eligible to have 20 percent of the home's cost forgiven at closing and as long as they made their mortgage payments on time, homeowners would no longer be required to pay on their student loans. However, if the homebuyer's debt exceeded 20 percent of the home's cost, they would be required to pay the remaining debt at closing.
"Senate Bill 334 is based on the Maryland SmartBuy program, which started in 2016 and has already eliminated $1 million in student debt," Schiavoni's statement said. "After its initial success, the Maryland legislature recently expanded the program, making available an additional $3 million for new homebuyers."
Homebuyers would have to live in the purchased home for five years for them to be able to get the full benefit of this Bill, according to Ameritech Financial. "But for locals struggling with long-term living situation choices, this could be a huge boon. Even better, it would also work with the first-time buyer programs currently available in Ohio, as well."
According to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit, U.S. student loan debt increased by $37 billion in Q3, up to a total of $1.44 trillion total as of September 30. A recent LendingTree analysis found that the median debt balance for millennials living in the 50 biggest U.S. cities is $23,064. This massive financial burden must inevitably send ripples out through the larger economy, but is there a correlation between higher education costs and the rate of foreclosures? A new video by MReport's sister publication, DS News, looked at a recent study from the journal Demography, which analyzed the potential impact of families with children seeking higher education on the rate of foreclosures.
Click here to view the DS News video.