Sec. 2. Findings

405 words·~2 min read·/bill/117/hr/7368/ih/section-2

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Congress finds the following: In the third quarter of 2021, over 15,185,000 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 $1,750,000,000,000. More than 44,700,000 Americans have at least one outstanding student loan. Student loan repayments are forcing millions of young families to delay purchasing their first home, as they cannot afford to save for a downpayment or qualify for a mortgage while also paying off student debt.

Data from the Federal Reserve shows that non-Hispanic White households have a median net worth of $181,440, while Black households have a median net worth of $20,730 and Hispanic households have $36,180; providing innovative financial products will allow the United States to reduce the racial wealth gap and to ensure equitable access to housing and economic mobility. The COVID–19 pandemic has exacerbated the racial wealth gap by increasing unemployment within already disadvantaged communities and further reducing access to homeownership and increasing the burden of student debt.

According to a report from the Joint Center for Housing Studies of Harvard University, Black and Hispanic households are more likely to have their household income decline and to face hardship in paying rent and other monthly housing costs due to the COVID–19 pandemic. It is imperative to create a demonstration program to design financial pathways to, where possible, 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.