Kaptur bill would create a program that would help Americans turn student debt into home equity
Washington, D.C. – This week, Congresswoman Marcy Kaptur (OH-09) introduced the Transform Student Debt to Home Equity Act. The bill directs the Department of Housing and Urban Development (HUD) and Federal Housing Finance Agency (FHFA) to create a pilot program for creditworthy student debt holders to transform their student debt into an opportunity to purchase and own a home.
“Congress must do more to help working and middle-class people create wealth and the Transform Student Debt to Home Equity Act offers us a road forward to help transform student debt into home ownership,” said Kaptur. “This bill directs the U.S. Department of Housing and the Federal Housing Finance Agency to start a pilot program that connects people with student debt with habitable properties for sale but on the federal ledger.”
In the coming months, Kaptur will be working with stakeholders in Ohio and Washington, D.C. to get input on how businesses, organizations, states and Federal agencies can work together to increase the opportunity for homeownership through student debt.
“Creating options for the millions of people with student debt to buy their first home, would allow a new generation to pay off debts and help strengthen neighborhoods, all simply by maintaining a home mortgage,” continued Kaptur.
Kaptur gave a speech on the House floor which you can view here.
What does the bill do?
The bill authorizes HUD and FHFA to establish a pilot demonstration that connects creditworthy federal student debt holders with housing properties for sale but held by the federal government. 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 back to Congress on such a pilot program within 90 days of enactment. The bill does not direct any specific plan but does request the related agencies propose a pilot program that could potentially be used as a national model for enabling college graduates to restructure their student debt into an opportunity to purchase habitable foreclosed and vacant homes across the country.
See the section by section of the bill here: Section by Section Transform Student Debt to Home Equity Act.pdf
The bill has six cosponsors: Reps. William Lacy Clay, Jr. (MO-01), Dwight Evans (PA-02), Robert Brady (PA-01), Marcia L. Fudge (OH-11), Pramila Jayapal (WA-07) and Chellie Pingree (ME-01).