San Francisco-based SoFi and Newark-based Fannie Mae announced a new loan option that enables homeowners to pay down student debt using the equity in their homes.
With SoFi’s new offering, the Student Loan Payoff ReFi, homeowners will have the ability to refinance mortgages at a lower rate and pay down the balance of an existing student loan.
With its cash-out refinance student loan payoff plan, SoFi will pay down the student loan by disbursing payment directly to the servicer of the student debt. SoFi is a Fannie Mae approved seller-servicer.
This loan option is designed to help homeowners that manage their own student debt or those who have co-signed loans, which often includes parents.
An estimated 8.5 million households in the U.S. could potentially pay down or completely pay off their student debt obligations with this new option.
“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, senior vice president of mortgage at SoFi.
“The Student Loan Payoff ReFi actively addresses a growing burden that impacts a wide range of households.
“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.
