The success of the pilot led Gov. Larry Hogan (R) to extend the initiative a year ago and designate additional funding in the state’s fiscal 2019 budget. The housing department kicked in additional dollars through its down payment assistance program, doubling the funding for SmartBuy 2.0, as the expanded program has been dubbed. Hogan has since upped the state’s commitment to the program with $6 million in the fiscal 2020 budget.

AD

AD

“Nearly 60 percent of all of our college students are graduating with thousands of dollars in student debt. This financial burden prevents many young Marylanders from achieving financial security and is a roadblock to home ownership,” Hogan said in a statement Tuesday.

Under SmartBuy 2.0, the state will provide up to 15 percent of the purchase price for would-be home buyers to pay off their outstanding student loans. Maryland will pay off a maximum of $40,000 in student debt. Any remaining balance must be paid in full by the closing date. If there are two borrowers, however, only one’s student loan balance must be paid off.

Say a buyer with $35,000 in student loans is interested in a $200,000 house. SmartBuy 2.0 would cover $30,000 of the student loan debt — an amount equal to 15 percent of the purchase price — leaving the buyer responsible for the remaining $5,000.

AD

AD

To qualify, buyers must be in good standing on their student loans, purchasing their first home and have at least $1,000 in debt. The purchase also must be financed through the Maryland Mortgage Program, which arranges home loans for first-time buyers in the state.

Buyers must meet income eligibility requirements, which vary by household size and location. They must attend a home buyer’s workshop and work with an approved lender. Homeowners must remain in the house for at least five years or pay back the money the state provided.

Although the pilot was restricted to buyers purchasing foreclosed homes owned and renovated by the state, the latest iteration of the program has waived that requirement. SmartBuy 2.0 also offers $5,000 to help buyers with down payments and closing costs.

AD

Maryland is among a small number of states trying to bolster homeownership for recent college graduates. Ohio offers down payment assistance and lower mortgage rates for first-time home buyers who earned a degree within the past four years; Rhode Island provides up to $7,000 to buyers who graduated in the past three years.