Democratic MPs Gregory Meeks (NY) and Nikema Williams (Ga.) Want student loan borrowers to buy a home and have introduced 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 take into account a potential homeowner’s participation in an income-based student loan repayment plan when setting 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 the FHA treats many Americans unfairly, considering that they are going to college to improve their lives and to 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 promote 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 their studies or find a job to repay the loan, they usually won’t repay the loans that will follow them for the rest of their lives and effectively get them off Homeownership Truncation, which is one of the most proven ways to build wealth in the United States
“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 shattered. 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 be introducing this sensible bill with Congressman Meeks to ensure that student loan borrowers get a fair assessment of their student debt obligations when applying for a Federal Housing Administration-backed mortgage. I am proud to lead this legislation to ensure that the next generation of homebuyers have a fair chance at mortgage approval and ultimately homeownership. “
Student debt is the third highest debt Americans have with more than $ 1.5 trillion. President Joe Biden suspended student loan payments until October due to the coronavirus pandemic, but he still hasn’t made public his plans to cope with the 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 forgiveness. However, Biden left student loan issuance out of his budget, instead asking White House attorneys to consider the possibility of using a student debt cancellation ordinance and instruct the Department of Education on alternative options for dealing with the issuance of loans Find student loans.