Over $6 Million in Student Debt Eliminated Through Program
News Release, Maryland Higher Education Commission
ANNAPOLIS, MD—The Hogan administration today celebrated the one-year anniversary of the launch of the Maryland SmartBuy 2.0 initiative. Managed by the Maryland Department of Housing and Community Development (DHCD), this nationally recognized homeownership program enables prospective homebuyers to eliminate up to $40,000 in student loan debt while purchasing an eligible home through the Maryland Mortgage Program. After a successful pilot of Maryland SmartBuy in 2016, Governor Larry Hogan announced an extension of the initiative in July 2018, greatly expanding the number of homes eligible under the program.
“In Maryland, 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 homeownership and saving for retirement,” said Governor Hogan. “Today, our administration is proud to celebrate a very successful inaugural year of Maryland SmartBuy 2.0, through which Maryland homebuyers have eliminated millions of dollars in student debt while settling down right here in our great state.”
To support Maryland SmartBuy 2.0, Governor Hogan provided $3 million for the program in his Fiscal Year 2019 budget. Due to demand, DHCD provided an additional $3 million in bridge funding through the Down Payment and Settlement Assistance Program, eliminating a total of $6 million in student debt, an average of $28,000 per participant. For Fiscal Year 2020, Governor Hogan has doubled the program’s original funding to $6 million.
In addition to this critical initiative, Governor Hogan introduced the Student Debt Relief Act for both the 2018 and 2019 legislative sessions. This legislation would have allowed Marylanders to deduct 100 percent of the interest paid on their student loans from their income tax return and would have expanded the Maryland Community College Promise Scholarship Program to include four-year Maryland public institutions. The legislature failed both times to act on these proposals.
“Maryland SmartBuy is the first program of its kind in the nation designed to address the decline in homeownership rates among younger, millennial Marylanders,” said Maryland Department of Housing and Community Development Secretary Kenneth C. Holt. “The program was an immediate success, quickly becoming a national model for similar programs, and, under Governor Hogan’s leadership, we have continued to expand and adapt this innovative initiative to empower more Maryland homebuyers to erase their student debt while securing their piece of the American dream of homeownership.”
Maryland SmartBuy’s mortgage loans are provided through DHCD’s Maryland Mortgage Program, the state’s flagship homeownership assistance program for nearly 40 years. Traditionally, the program provides fixed-term mortgages, primarily to first-time homebuyers, along with down payment and closing cost incentives.