Programs That Help with Student Loans and Homeownership
How to Buy a Home When You Still Have Student Debt
For many first-time buyers, especially younger professionals and college grads, student loans can feel like the biggest obstacle to buying a home. The good news? It’s not a dealbreaker anymore.
In fact, there are several national and state programs designed to help people with student loans become homeowners and some can even forgive debt or help with down payments. Here’s what to know.
The Myth: “I Can’t Buy a Home Because of My Student Loans”
Lenders don’t automatically disqualify you for having student debt. What they really look at is your debt-to-income ratio (DTI), basically, how much of your monthly income goes toward debts like car loans, credit cards, and student loans.
If your DTI is reasonable and you have stable income, you can absolutely qualify for a mortgage, and these programs can make it even easier.
National & Federal Programs
1. FHA Loans
Backed by the Federal Housing Administration, FHA loans are one of the most forgiving when it comes to student loan debt.
You can qualify with as little as 3.5% down, and lenders often use lower monthly payment estimates for student loans (which can help your DTI).
Ideal for buyers with steady income but higher debt balances.
2. Fannie Mae “Student Loan Solutions” Program
This program allows buyers to refinance student debt into their mortgage when purchasing or refinancing a home.
For example: if a parent or cosigner has student loans for a child, those debts can be rolled into the mortgage, simplifying payments and sometimes improving credit utilization.
Available through participating lenders that work with Fannie Mae.
3. Freddie Mac “Home Possible” Program
Designed for low-to-moderate income borrowers.
Allows for as little as 3% down, with flexible credit and income guidelines.
Student loan payments are calculated using actual payment amounts, not inflated estimates, which can make qualifying easier.
4. Public Service Loan Forgiveness (PSLF) + Homeownership
If you work for a government agency, nonprofit, or educational institution, PSLF may forgive the remainder of your federal student loans after 10 years of qualifying payments.
Here’s where this ties in. Many “hero” mortgage programs, like Teacher Next Door or Homes for Heroes, can be layered with PSLF benefits, helping public service professionals reduce debt and build home equity.
New Jersey-Specific Options
NJHMFA Smart Start & Down Payment Assistance
First-time buyers in NJ can receive up to $15,000 in forgivable down payment assistance (and an extra $7,000 if you’re a first-generation homebuyer).
Many of these buyers also carry student loans, but NJHMFA’s income and DTI guidelines are designed to help them qualify.
Learn more at njhousing.gov.
Other Helpful Tools
Employer Homebuyer Assistance Programs
Some companies, especially in healthcare and education, offer home purchase grants or relocation benefits. It’s worth asking your HR department what’s available.
First-Time Buyer Grants & Assistance Funds
Federal and state grants (like those through HUD, HomeReady, or Teacher Next Door) often allow borrowers with student loans to qualify for help toward down payments or closing costs.
Why This Matters in Wayne, NJ
Wayne was recently ranked one of Realtor.com’s Top 5 Hottest Zip Codes in the U.S., thanks to its balance of suburban lifestyle, affordability and proximity to NYC.
That means younger professionals, educators, and healthcare workers, many with student loans, are choosing Wayne for its strong schools, parks and access to jobs.
And with these programs, it’s more possible than ever to own a home here even with student debt.
Ready to Explore Your Options?
If you or someone you know has student loans and dreams of buying a home, there are programs that can help make it happen.
Reach out to me today for a no-pressure consultation. I’ll connect you with lenders who specialize in these programs and show you what options fit your goals. You don’t have to wait until your student loans are gone to buy a home, you just need the right strategy with the right agent.
