Axne, Colleagues Introduce Bill to Help College Graduates Purchase Homes
WASHINGTON — Today, U.S. Rep. Cindy Axne (IA-03) joined Rep. Marcy Kaptur (OH-09) and colleagues to introduce the Transform Student Debt to Home Equity Act of 2019, legislation intended to help college graduates strapped with student loan debt purchase a home. This legislation would allow college graduates to roll federal student loan debt into a home mortgage through the purchase of a federally-owned vacant property.
“Owning a home is part of the American dream, but this can be near impossible for Iowans crushed by student loans,” said Rep. Axne. “This legislation provides a pathway for student loan borrowers to purchase a home and lower their interest rates while supporting our local economies and strengthening the housing market.”
In Iowa, 65% of college students graduate with debt, with an average of almost $30,000 of loans, creating a significant barrier to homeownership. At the same time, foreclosed properties are held vacant by the federal government, waiting for the market to recover without collecting rent or interest. This legislation would provide student borrowers with the opportunity to purchase a home, while helping the federal government better manage its defaulted properties.
The legislation directs the Department of Housing and Urban Development (HUD) and Federal Housing Finance Agency (FHFA) to establish a pilot program to connect creditworthy federal student debt holders with federally-owned housing properties for sale. The pilot program would be used as a national model for helping college graduates restructure their student loan debt into an opportunity to purchase a home.
The goal of the pilot project would be to create a program that recalculates financing terms, debt-to-income ratios, interest rates, or other factors in order to transition federal student loan debt into long-term homeownership. The bill also requires the related agencies to report to Congress on such a pilot program within 90 days of enactment.
Bill text for the legislation can be found here.