Sec. 2. Findings

386 words·~2 min read·/bill/116/hr/3511/ih/section-2

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Congress finds the following: In the first quarter of 2019, over 16,800,000 homes remain vacant in the United States. These extended vacancies depress neighborhood property values and create a downward spiral in neighborhood stability in already troubled communities. Meanwhile, due to climbing expenses of higher education, the total Federal student debt owed equals $1,560,000,000,000. More than 44,700,000 Americans have at least one outstanding student loan, up dramatically from 37,000,000 Americans just 7 years ago.

Student loan repayments are forcing millions of young families out of purchasing their first home, as they cannot afford to save for a down payment or qualify for a mortgage. Data from the United States Census Bureau shows that non-Hispanic White households have an average net worth of $130,800, while Black households have an average net worth of $9,590 and Hispanic households have $17,530; providing innovative financial products will allow the United States to close the racial wealth gap and to ensure equitable access to housing and economic mobility.

According to a report from Pew Research Center, the median income of African-American households decreased by 53 percent between 2008 and 2013. In the same time period, the income gap between White households and African-American households widened; increasing from 13 times greater to 17 times greater. It is imperative to create a demonstration program to design financial pathways to, where possible, to systematically convert some student debt streams into equity streams through negotiation of mortgages; otherwise housing purchases will continue to be sluggish among first time home-buyers and thousands more Americans will enter their midyears saddled with student loan debt never having had the opportunity to accumulate equity.

It is in the interest of the Federal Government to use the resources at its disposal, including both housing properties held in trust and student debt obligations, to put reverse pressure on these downward trends. By arranging financing that recalculates terms, debt-to-income ratios, mortgage interest rates, and other factors, short-term student debt could transition into longer term home ownership. The goal is to connect creditworthy Federal student debt holders with housing properties for sale and held by the Federal Government and local land banks.

Over time, participants can help restore neighborhoods, transform their debt to equity, and stabilize secured property values locally and on the Federal ledger by maintaining and investing in a home mortgage.