Would you move to Illinois if the state paid off your student loans? For hundreds of new and returning residents, the answer has been a resounding “yes.”
On Monday’s Chicago’s Morning Answer on AM 560, co-host Amy Jacobson and guest host Chris Krok dove into the controversial “SmartBuy” homebuyer incentive program with mortgage expert David Hochberg, Vice President of Lending at Team Hochberg, Homeside Financial. The program, offered through the Illinois Housing Development Authority (IHDA), provides up to $40,000 in student loan debt forgiveness for qualifying homebuyers.
Jacobson was tipped off about the program by a friend whose son recently moved back to Illinois from Ohio. The catch? The state paid off a significant chunk of his $60,000 student loan debt—as long as he bought a home in Illinois.
“I couldn’t believe it,” Jacobson said. “I knew we were giving benefits to migrants, but I didn’t know we were also paying fellow Americans to come back.”
A Real Program—With Real Money
Hochberg confirmed the program’s legitimacy and explained that it’s part of a broader initiative to boost homeownership in Illinois. The “SmartBuy” program began in 2022 and typically runs out of funds within the first two months of each year.
“They rolled out the program again this year, and—shocker—it ran out in 60 days,” Hochberg said. “It’s not a scam. It’s real, but you have to qualify—and fast.”
According to IHDA data, 631 individuals and families used SmartBuy to purchase homes, with the state shelling out $17 million in student loan forgiveness.
To qualify, applicants must:
- Be a first-time or repeat homebuyer.
- Have a credit score of at least 640.
- Have $1,000 to $40,000 in student loan debt.
- Agree to pay off loans in full at closing—partial forgiveness is not allowed.
- Fall under specific income limits.
“If you’ve got two $20,000 loans, the state will pay them off. But if you have $60,000 in debt, you’ll have to pay it down to $40,000 first,” Hochberg clarified.
Desperation or Smart Strategy?
Illinois has seen a years-long exodus of residents to lower-tax states like Texas, Tennessee, and Florida. Critics argue that the SmartBuy program is a Band-Aid solution for a self-inflicted wound: high taxes, poor fiscal management, and skyrocketing public pension liabilities.
“We’re hemorrhaging residents,” Jacobson said. “Other states are lowering or eliminating income taxes. We’re raising them—and giving away money to get people to stay.”
Hochberg agreed that the broader economic conditions are driving people away and fueling programs like SmartBuy. “It’s a gimmick,” he admitted. “But if someone drops 40 grand in front of you to pay off your loans, you’re not walking away from it.”
Still, Hochberg suspects most beneficiaries were already living in Illinois—not outsiders being lured back.
“I’d guess more than 90% of SmartBuy users were already Illinois residents just trying to buy a home,” he said.
The Real Problem? The Student Loan System
Krok asked the million-dollar question: “What’s the root cause of all this?”
Hochberg didn’t hold back.
“We’ve let universities run wild with tuition. We’re giving student loans to 18-year-olds with no idea what they’re doing, and we let it happen with no oversight,” he said. “Harvard has billions in endowments and still charges $80,000 a year. It’s a racket.”
He pointed to Dodd-Frank requirements for homebuyers to prove “ability to repay,” noting that such safeguards don’t exist for student loans. “If a college degree was a home, half of them would be underwater by now,” he quipped.
Free Money Fever
The conversation also touched on pandemic-era financial assistance like PPP loans.
“Don’t sit there as a business owner who took six figures in PPP and complain about student loan forgiveness,” Hochberg said. “Everybody got in line at the bar. Let’s be honest.”
He warned that rampant government giveaways have helped fuel inflation and distorted financial markets. “We’re in a drunken spin right now,” Hochberg said. “The financial experts don’t even know what’s going on.”
Mortgage Rate Outlook
As for the housing market? Hochberg said mortgage rates remain unpredictable.
“The 10-year treasury is over 4%. Tariff talk is making investors nervous. Normally, market sell-offs are good for mortgage rates, but not this time,” he explained. “Nobody knows where the bottom is.”
Still, for those with good credit and strategic timing, programs like SmartBuy may offer a path to homeownership—even if the overall cost of living in Illinois remains high.
“You can get $40,000 off your loans,” Hochberg said. “But the catch is, you have to live in Illinois.”