Building giant Lennar Corp. is debuting a mortgage program that promises to help young adults pay off outstanding student loan debt. The allocation toward the student loan debt by Lennar will not increase the price of the home or add to the mortgage loan balance. Here’s how it works: Borrowers who use Lennar’s new Eagle Home Mortgage Student Loan Debt Mortgage Program will be able to direct up to 3 percent of the home’s purchase price to pay down student loans when they buy a new home from Lennar.
The allocation toward the student loan debt will not increase the price of the home or add to the mortgage loan balance. Lennar will contribute up to 3 percent of the home’s purchase price to pay down the buyer’s student loans, which means the final amount the firm will pay depends on the sales price of the home. The maximum loan amount within the program is $424,100, which means the highest amount of student loan debt that will be paid by Lennar on any given home purchase agreement will be around $13,000.
“Americans are more burdened than ever by student loans, with $1.3 trillion in outstanding student loans spread out among 42 million borrowers,” says Jimmy Timmons, president of Eagle Home Mortgage, a full-service mortgage lender that is part of the Lennar family of companies. “Particularly with millennial buyers, people who want to buy a home of their own are not feeling as though they can move forward. Our program is designed to relieve some of that burden and remove that barrier to owning a home.”
Eagle Home Mortgage’s announcement comes on the heels of a new study released by the National Association of REALTORS® last week that showed young adults blamed their student debt for delaying their home purchase by an average of seven years.
Buyers interested in the Student Loan Debt Mortgage Program will be required to meet credit and income requirements. The program is first being offered on a trial basis with new Lennar homes across the country.