Home building firm Lennar Corp. is trying to make it easier for new graduates saddled with student debt to buy a home. The company has just launched a new mortgage product wherein it promises to help young adults pay off some of their student debt with their monthly mortgage payments.
Lennar said the deal, which is being offered in partnership with Eagle Home Mortgage, won't add to the price of the home or the mortgage balance. Instead it's basically a kind of a discount, as borrowers will be able to direct up to three percent of their home's purchase price towards paying off their student loans.
The Eagle Home Mortgage Student Loan Debt Mortgage Program will see Lennar 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,” said 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.”
The new offer comes just days after a report from the National Association of Realtors found that young adults are delaying buying a home by up to seven years due to the burden of their student debts.
Those who're interested in the Student Loan Debt Mortgage Program will still need to meet the firm's credit and income requirements. The program is first being offered on a trial basis with new Lennar homes across the country.