BUFFALO GROVE — State Senator Adriane Johnson (D-Buffalo Grove) is encouraging families who want to buy a house but are hindered by student loan debt to take advantage of Illinois’ new SmartBuy mortgage and student loan assistance program. 

“Young people, particularly young people who live in minority communities, are often held back from purchasing a home due to the weight of student loan debt,” Johnson said. “Families deserve the peace of mind that they can have both a quality education and a forever home.” 

The Illinois Housing Development Authority launched the SmartBuy program, which offers a safe, affordable 30-year fixed rate first mortgage with $5,000 in assistance to be used toward a down payment and/or closing costs. In addition, the program allows people to combine their student loan debt into a mortgage in an effort to lower the high interest rate of student loans and get rid of the student loan portion of debt. The program provides 15% of the purchase price, or up to $40,000, in student loan debt relief to borrowers.

A 2018 study by the University of Illinois found that outstanding student loan debt negatively impacts wealth accumulation for all borrowers — regardless of race — but the impact is especially significant for Black and Latinx borrowers.

To qualify for SmartBuy, potential borrowers must have at least $1,000 in student loan debt and must pay off their full remaining student loan balance at closing. The program also requires a FICO mid-score of at least 640, and applicants must meet certain income and purchase price requirements.

SmartBuy was created using funding from the historic, bipartisan Rebuild Illinois statewide construction plan, and is expected to assist approximately 500 to 1000 borrowers.

Learn more about SmartBuy and find a list of SmartBuy approved loan vendors at www.ihdamortgage.org/smartbuy.