Recent college graduates are being offered a helping hand towards homeownership in some states, which are prepared to grant them thousands of dollars towards buying a property.
One such state is New York, where Governor Andrew Cuomo has just announced the "Graduate to Homeownership" program for those who've graduated in the last two years. The program offers college grads who're also first-time buyers assistance in the form of grants to help come up with a down payment for their first property. To qualify, graduates must have finished their studies within the last two years at an accredited college or university, and they must have achieved an associate's, bachelor's, master's or doctorate degree. The program provides up to $15,000 worth of down payment assistance or a reduced mortgage rate.
However there is a catch - as graduates are limited to choosing a home in one of eight upstate communities in New York.
"Upstate colleges and universities have world class programs that produce highly skilled graduates, who then leave for opportunities elsewhere," Cuomo said. The program is designed to "incentivize" those graduates to instead look at opportunities in New York and "put down roots" in the state, the governor added.
New York isn't alone in this kind of offer. In fact, around half of U.S. states currently offer some kind of housing assistance to student loan borrowers, says Credible.com. For example in Ohio, students can access the Grants for Grads program, which is available for those who've graduated from a local college in the past four years. Then there's Rhode Island's Ocean State Grad Grant program, which provides up to $7,000 in down payment assistance to those who've graduated in the last three years.
However, like the New York program, most of these programs come with the same requirement that college grads can only buy a home within the state they graduated from, which means they won't be for everyone.
"It can certainly help people who are dealing with high student debt burdens," says David Reiss, research director for the Center for Urban Business Entrepreneurship at Brooklyn Law School. However, Reiss notes that not all states are that enticing places for college grads to live, and many may decide there are better opportuities to be had elsewhere, even if it means forsaking assistance in buying their first home.
"Programs like this have to deal with a fundamental issue: Do these communities have enough jobs for recent college graduates? Time will tell," Reiss said.