New Fannie Mae Policy to Help Borrowers with Student Loans
The national homeownership rate is hovering record lows. Many millennials are delaying buying a home for a number of reasons, including student loan debt. Fannie Mae recently announced three new policies designed to alleviate the impact of student debt and help young millennials finance home loans.
National student loan debt has surpassed $1.4 trillion. The new Fannie Mae programs are intended to address the specific needs of borrowers with student debt. The programs include: student loan cash-out refinance, debt paid by others, and student debt payment calculation.
“We understand the significant role that a monthly student loan payment plays in a potential home buyer’s consideration to take on a mortgage, and we want to be a part of the solution,” Jonathan Lawless, Vice President of Customer Solutions at Fannie Mae, said in statement. “These new policies provide three flexible payment solutions to future and current homeowners and, in turn, allow lenders to serve more borrowers.”
Student debt is not the only barrier impacting millennials looking to own a home. The housing market has been facing inventory constraints. As of April 2017, there was only about 3.8 months supply of homes on the market averaging 34 days on the market.
While some financial analysts suggest student loan debt may be a risk to the borrower, Lawless disagrees: “folks with student loan debt actually perform very, very well. They are a very safe segment of the market.”
Sources: MarketWatch, MarketWatch, HousingWire