Source: United States House of Representatives – Congressman Gregory W Meeks (5th District of New York)
June 14, 2021
Washington, D.C. – Today, Representative Gregory W. Meeks (D-NY), Senior Member of the Financial Services Committee, and Representative Nikema Williams (D-GA), Vice Chair of the Subcommittee on Investigations & Oversight introduced the Making FHA Work for Borrowers with Student Debt Act of 2021.
This bill requires the Federal Housing Administration (FHA) to more fairly treat student loan borrowers looking to obtain an affordable mortgage through FHA’s insurance program. The bill achieves this goal by reforming FHA’s guidelines so that student borrowers – particularly those enrolled in repayment programs that lower their monthly obligations – are judged on their capacity to repay a mortgage based on what they actually pay in student loans monthly. Currently, FHA does not consider a potential homeowner’s active participation in an income-driven student loan repayment plan when calculating their debt for underwriting purposes, constricting access to an FHA loan for many low-to-moderate income individuals.
“The current treatment of student loans by FHA unfairly closes the door to homeownership for many Americans with student debt, especially those from low wealth backgrounds.
“This student debt penalty disqualifies home-ready borrowers from a program that generally promotes homeownership. Under the current system, many young people, especially those young people of color, miss out on one of the greatest wealth building opportunities because they pursued higher education. We should do all that we can to promote wealth building and homeownership among young people and communities of color and removing this student debt penalty is a critical step in that direction,” said Congressman Gregory W. Meeks.
“To close the wealth gap in the Fifth District and our country, young adults need to have the chance to buy a home and make other investments in their future. Unfortunately, crushing student loan debt puts this out of reach for too many. We have to do all we can to break down barriers to homeownership for individuals with student debt. I am proud to join Congressman Meeks in introducing this commonsense bill to ensure student loan borrowers get a fair assessment of their student debt obligations when applying for a mortgage backed by the Federal Housing Administration. I’m proud to help lead this legislation to ensure the next generation of homebuyers has a fair shot at mortgage approval and ultimately homeownership,” said Congresswoman Nikema Williams.