Trying to buy a home with student debt? Luckily, it is possible and there are many options for you! One of the biggest things homebuyers struggle with is saving for the down payment. You might have heard that you need 20% down to purchase a home- this is a common misconception. A lot of mortgage programs now allow home buyers to put as little as 3% down, and in some cases, 0% down. In addition, there are Down Payment Assistance (DPA) Programs to help finance the down payment funds. 

Find the Right DPA Program 

While student loan debt may be taking a portion of your income, utilizing your state’s Down Payment Assistance (DPA) programs could be a great resource to help you source your new home’s down payment. The Department of Housing and Urban Development provides housing grants to each state who then distributes funds to their residents. There are thousands of nationwide programs that help you determine if you qualify for down payment grants, how much funding you can receive, and what types of mortgages you can apply for.  

Check out your state’s local homebuying programs and who your state’s Housing Finance Agency (HFA) is to see which programs might be available for you. 

How to Qualify for Student Debt Relief Home Loan Programs? 

Once you’ve found a DPA program, you’ll want to keep the following in mind when applying for the home buying assistance programs:  

  • Make monthly student loan payments on time. This will help you maintain a good credit score. 
  • Sometimes, there are programs that let you purchase anywhere within the state, but occasionally there is a targeted area requirement for assistance programs. Look at the program’s specifics to learn about the neighborhoods covered by the program.  
  • Review eligibility to understand any other eligibility specifics (i.e. timeframe post graduation, student loan debt minimums/maximums, etc.).  
  • Understand what your DTI is, and if it falls within the loan’s qualifications.  
  • Make sure your income and purchase price limits match the program that you want to use.   

Contact a team member today to learn about qualifying for your state’s home buying assistance program(s). For more information, check out our guide on buying a home with student debt.