Fannie Mae has partnered with an online lender to offer a new refinance product to help homeowners pay down student debt, it was announced today.
The new offering, the Student Loan Payoff ReFi, is the result of a partnership between Fannie Mae and SoFi. It allows homeowners to refinance their mortgages at a lower rate to pay down the balance of an existing student loan, with SoFi disbursing the refi payment directly to the servicer of the borrower’s student debt.
Student debt is a crippling problem for many. According to Experian data, a homeowner with outstanding cosigned student loans has a balance of $36,000 on those loans. And many student loans carry a higher rate than the borrowing costs of most mortgages. An estimated 8.5 million US households could potentially pay down — or completely pay off — student debt obligations through the new refi product, according to a news release.
“People can pay off student loan debt and are left with one loan at the low rates that mortgage borrowers are enjoying in today’s market,” said Michael Tannenbaum, SoFi’s senior vice president of mortgage.
“The nation is seeing record-low mortgage rates, and our partnership with SoFi is just one way that Fannie Mae is able to support current and future homeowners that have student debt,” said Jonathan Lawless, vice president for product development and affordable housing at Fannie Mae.
The offering is available to both SoFi members and the general public in states where SoFi has mortgage licenses starting today.