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Harford County

Harford couple pays off student debt, purchases new home through Maryland's SmartBuy program

Jasmine Townsel, 26, and her fiance, Brian Hawkins, of Bel Air, have their first home and in Townsel's case, no more student debt because of Maryland's new SmartBuy homeownership program to help millennials carrying student debt purchase a house and get that debt paid off in the process.

"This program came at the right time, because we just started looking for a house," Townsel, who had more than $30,000 in debt, said Monday.


She and Hawkins, 29, are the first homeowners who have settled on a house through the Maryland SmartBuy program. Lt. Gov. Boyd Rutherford and Kenneth Holt, secretary of the Maryland Department Housing and Community Development, recognized the couple as they celebrated the launch of the SmartBuy program Monday in front of their three-bedroom townhouse in the 1300 block of Agora Place.

"Traditionally those in their 20s and 30s would account for a substantial share of Maryland's first-time homebuyers, but we've seen a little difference in that demographic over the years, and it's believed that student loan debt is a part of that challenge," Rutherford said.


The lieutenant governor noted the rising costs of a college education and easy access to student loan credit as factors in rising student debt in recent years.

"Those debts can be a tremendous barrier to homeownership," said Rutherford, who noted young people are blocked from "reaping those financial benefits" associated with owning a house.

Hawkins and Townsel, who settled on their house Sept. 30, stood next to Holt and Rutherford as the state leaders spoke to a crowd of staffers from Housing and Community Development and the governor's office, as well as local real estate firms and mortgage lenders who gathered in front of the townhouse. Hawkins' and Townsel's parents were there, too.

"This is a momentous occasion, not just for Jasmine and Brian but, I think, for the entire state of Maryland and really for the nation because our SmartBuy program leads the vanguard of solving a big problem," Holt said of student debt.

Maryland SmartBuy was established through legislation introduced by Gov. Larry Hogan and approved by the Maryland General Assembly during its 2016 session earlier this year. Prospective homeowners apply through the Maryland Mortgage Program, and their existing debt balance must be at least $1,000 or up to 15 percent of the purchase price of the home, according to the Maryland SmartBuy website.

The state then provides cash to the homeowner to pay of their debt, an amount equal to up to 15 percent of the purchase price, and the homeowner pays the remainder of the balance of the debt.

The student debt must be paid off in full by the time of settlement, according to Michael White, a spokesperson for the Department of Housing and Community Development.

White gave an example of a homebuyer who owes $50,000 in student debt and wants to purchase a $300,000 house. The state would cover $45,000 of that debt, or 15 percent of the purchase price, and the buyer would have to pay the remaining $5,000 in debt by settlement.


The SmartBuy program would not be affordable for someone who owes a larger amount of debt, such as $100,000, according to White.

"I was basically right in line for it," said Townsel, who works as an intern at Aberdeen Proving Ground.

Her fiance, who is a test engineer at SafeNet Assured Technologies in Abingdon, does not have any student debt.

According to the deed on file in land records, the couple paid $205,000 for the townhouse.

They declined to say how much of the debt the state covered and how much they did, although it was "a small amount" left for the new homeowners, according to Hawkins.

"For people with a lot of debt, it might be really hard, but ours was right there," Townsel said.


The couple had planned their finances so they could afford the remaining balance, according to Salli Muscella, a Realtor with Advance Realty Bel Air who helped them find the Agora Place house.

"Now we can get a puppy," Townsel told Hawkins.

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"You have to call the puppy Boyd," after the lieutenant governor, Muscella told the couple.

Townsel and Hawkins plan to get married in March of 2018. They must live in the house for five years, after which the student debt portion of their mortgage is forgiven. The homeowners are responsible for the rest of the mortgage, according to White.

The state has about 20 properties, throughout Maryland, that will initially be marketed through the SmartBuy program, according to Sergei Kuzmenchuk, chief financial officer for Housing and Community Development.

The department owns the properties, many of which were lender-owned as a result of foreclosures, according to White.


White said the properties are hand-selected, based on the neighborhood and the state of the dwelling, so it will be a "low investment" for the state to get it ready for owners to move in.

Kuzmenchuk said the funding to cover the student debt comes from a portion of the state's capital market investment portfolio proceeds.

"We generate revenue that's not supported by the Maryland taxpayer," he said.