SmartBuy will also give between 500 and 1,000 new homeowners with incomes of less than $109,000 a 30-year, fixed-rate first mortgage with a deferred $5,000 for down payment or closing cost assistance, according to a press release from the IHDA.
The IHDA did not immediately respond to inquiries from FOX Business.
"First-time homeownership is exactly what our fragile economy needs right now," state Rep. Bob Morgan, D-Deerfield, said in a December statement when the initiative was first announced. "At a time when student loans are an obstacle for so many young people -- especially in communities of color -- the innovative SmartBuy Program will turn this debt into an opportunity for younger generations to buy a home and invest in their future."
The state is allocating up to $25 million to fund the program.
Supporters of the plan argue that it could incentivize young people to buy homes and pay property and income taxes in the state if its government can help ease the burden of student debt on new home buyers.
Critics of the plan argue that the plan is not a sustainable, long-term solution to help ease the burden of student loans and encourage first-time homebuyers. Student loan debt has reached $1.7 trillion nationally, and Illinois is facing a budget shortfall of nearly $4 billion in fiscal year 2021.
Illinois home sales increased 18% over the year between January 2020 and January 2021, and the statewide median home price was also up more than 18%, according to Illinois Realtors.
Home listings, however, decreased nearly 43% in January 2021 compared to January 2020.