Lawmakers in Maine are considering a proposal that would allow up to $40,000 in student loan debt forgiveness for first-time home buyers.
The proposed Maine Smart Buy Bill will pay off student debts of between $5,000 and $40,000 over a period of five years, so long as the buyer lived in the home they purchase for the duration. To qualify for the relief, buyers would need to meet credit score requirements and face limits on the cost of the home they can buy.
Democratic Senate President Troy Jackson said the bill provides an “opportunity to attract and retain young people by supporting a program that increases homeownership and provides student debt relief.”
“We need people to come to Maine to help be a part of our tax base, be part of the economy,” Jackson added. “And I think this is a great way to do it.”
Surveys show that student debt is one of the biggest obstacles preventing many aspiring homeowners from buying their first properties. According to a 2021 report by the National Association of Realtors and Morning Consult, more than half of potential home buyers said their student debt had so far prevented them from buying. The same survey revealed that millennials are the most likely generation to cite student debt as the reason for delaying a home purchase.
Maine isn’t the first state to offer student debt relief as an incentive for first-time home buyers. Illinois and Maryland both operate similar programs that pay off a large percentage of student debts for young adults who buy a mortgaged home in the states. Both programs have eligibility requirements and caps in place.
Maine is quite progressive when it comes to incentives, though. In 2006 it created a new program called “Visit for a Week, Stay for a Lifetime” to try and attract new residents. Under that initiative, those who decided to move to Maine permanently after a short stay would have their entire vacation expenses reimbursed.