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Pennsylvania House of Representatives
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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: February 7, 2017 10:57 AM
From: Representative Jason Dawkins
To: All House members
Subject: Incentives for Graduates to Remain in Pennsylvania and Purchase Home
 
I am planning to introduce legislation designed to incentivize recent graduates of public universities in this Commonwealth to remain in Pennsylvania to purchase a home.

Young adults in their 20s and 30s have traditionally accounted for a substantial share of first-time homebuyers. However, millennials who are saddled with increasing amounts of student loan debt may put off purchasing a home due to concerns about being able to afford both their student loan debt and a monthly mortgage payment. Accordingly, a November 2016 Washington Post news article states: “While there are many economic factors impeding homeownership for millennials – including stagnant wages, rising home prices and conservative lending – the burden of student debt is a significant hurdle. Indeed, a recent report by credit agency Fitch Ratings concluded that homebuyers with education loans generally can afford less than those without such debt.” With this in mind, I plan to introduce two (2) separate bills to help recent graduates of Pennsylvania’s public universities to better afford the purchasing of a home.
  • Inspired by Maryland’s new SmartBuy program, the first bill will similarly offer student loan forgiveness to recent graduates in exchange for the purchase of a home in-state. Under SmartBuy, if a qualified buyer has at least 5 percent for a down payment, the state will provide up to 15 percent of the purchase price toward outstanding student loans.The full outstanding balance of the student debt (not to exceed 15 percent of purchase price) is paid off as part of closing on the house.To qualify, buyers must be in good standing on their student loans and have at least $1,000 in student debt, along with meeting all state mortgage program eligibility requirements. Homeowners must remain in the house for at least five years to have the student debt forgiven.

  • The second bill will be based on Ohio’s Grants for Grads Program, which includes state-sponsored down payment assistance to qualified buyers – who graduated within the past four years – to pay for the down payment or closing costs on the purchase of a home.This down payment assistance, in the form of a discounted mortgage interest rate of either 2.5 percent or 5 percent, is forgiven after five years as long as the homebuyer remains in the state.However, if the buyer sells the home and moves out of state within five years, the buyer must repay some or all of the assistance provided.

Please join me in providing much-needed incentives that recent graduates need in order to be able to afford to become homeowners in Pennsylvania. We should help make it possible for our promising, well-educated young adults to stay, live, and work in this Commonwealth. This will allow them to build a better future for themselves and their communities, even as they contribute to strengthening the housing market and the economy.



Introduced as HB1223