New FHA Guidelines Will Make it Easier For Millennials With School Loan Debt to Buy a Home
There’s never been a more costly time to be a student. Currently, the Millennial generation carries a staggering $1.2 trillion in debt. Naturally, this makes other processes quite difficult post-grad — particularly buying a home for the first time. This has caused a palpable delay for the Millennial generation when it comes to real estate purchases.
Because of this, more and more Millennials are opting out of buying homes and living with their parents for longer. According to an analysis of Census data by the Pew Research Center, living with parents is now the most common arrangement for people between the ages of 18 and 34. These stats are groundbreaking, as this is the first time that has happened since 1880.
This means that nearly one-third of all Millennials live with their parents. Paired with a housing market that offers low availability at much higher prices, it’s been a tough time for these young adult graduates to fly the coop with all of that debt weighing them down.
But now, the Federal Housing Administration doesn’t want Millennials to wait to jump the nest any longer.
In late May, new guidelines were released for education loans that will actually make it easier for college grads who are encumbered with debt to get approved this year.
The guidelines were effectively immediately, easing student loan debt payment calculations instantaneously. Additionally, FHA lenders will use lower estimates for monthly payments when it comes to student loans. For FHA 203K loans, for example, the 3.5% down payment may be even lower.
Now that the FHA is loosening up their guidelines, will Millennials flee the nest? Either way, 2016 is looking to be a promising year for Millennials who are looking to become first time homeowners.