SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Transforming Student 
Debt to Home Equity Act of 2022’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) In the third quarter of 2021, over 
15,185,000 homes remain vacant in the United 
States. 
(2) These extended vacancies depress neighbor-
hood property values and create a downward spiral 
in neighborhood stability in already troubled commu-
nities. 
(3) Meanwhile, due to climbing expenses of 
higher education, the total Federal student debt 
owed equals $1,750,000,000,000. 
(4) More than 44,700,000 Americans have at 
least one outstanding student loan. 
(5) Student loan repayments are forcing mil-
lions of young families to delay purchasing their 
first home, as they cannot afford to save for a down-
payment or qualify for a mortgage while also paying 
off student debt. 
(6) Data from the Federal Reserve shows that 
non-Hispanic White households have a median net 
worth of $181,440, while Black households have a 
median net worth of $20,730 and Hispanic house-
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holds have $36,180; providing innovative financial 
products will allow the United States to reduce the 
racial wealth gap and to ensure equitable access to 
housing and economic mobility. 
(7) The COVID–19 pandemic has exacerbated 
the racial wealth gap by increasing unemployment 
within already disadvantaged communities and fur-
ther reducing access to homeownership and increas-
ing the burden of student debt. 
(8) According to a report from the Joint Center 
for Housing Studies of Harvard University, Black 
and Hispanic households are more likely to have 
their household income decline and to face hardship 
in paying rent and other monthly housing costs due 
to the COVID–19 pandemic. 
(9) It is imperative to create a demonstration 
program to design financial pathways to, where pos-
sible, systematically convert some student debt 
streams into equity streams through negotiation of 
mortgages; otherwise housing purchases will con-
tinue to be sluggish among first-time home buyers 
and thousands more Americans will enter their mid-
years saddled with student loan debt never having 
had the opportunity to accumulate equity. 
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(10) It is in the interest of the Federal Govern-
ment to use the resources at its disposal, including 
both housing properties held in trust and student 
debt obligations, to put reverse pressure on these 
downward trends. 
(11) By arranging financing that recalculates 
terms, debt-to-income ratios, mortgage interest 
rates, and other factors, short-term student debt 
could transition into longer-term home ownership. 
(12) The goal is to connect creditworthy Fed-
eral student debt holders with housing properties for 
sale and held by the Federal Government and local 
land banks. 
(13) Over time, participants can help restore 
neighborhoods, transform their debt to equity, and 
stabilize secured property values locally and on the 
Federal ledger by maintaining and investing in a 
home mortgage. 
SEC. 3. PROGRAM TO EXPAND ACCESS TO MORTGAGES TO 
ELIGIBLE CREDITWORTHY HOME BUYERS 
WITH FEDERAL STUDENT LOAN DEBT. 
(a) ESTABLISHMENT.—From amounts appropriated 
pursuant to subsection (g), the Secretary of Housing and 
Urban Development and the Director of the Federal 
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Housing Finance Agency shall establish and carry out a 
pilot demonstration program to— 
(1) provide assistance to eligible applicants in 
purchasing eligible properties; and 
(2) subsequently analyze the results of the pro-
vision of such assistance. 
(b) CONSULTATION.—In establishing and carrying 
out the program pursuant to subsection (a), the Secretary 
and the Director shall consult with— 
(1) the Director of the Consumer Financial 
Protection Bureau; 
(2) the Secretary of Agriculture; 
(3) the Secretary of Veterans Affairs; 
(4) the Secretary of Education; and 
(5) the Secretary of the Treasury. 
(c) ELIGIBLE APPLICANTS.—To be eligible for the 
program established pursuant to subsection (a), an appli-
cant— 
(1) shall have an outstanding balance of prin-
cipal or interest owing on a Federal loan made, in-
sured, or guaranteed under title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1070 et seq.); 
(2) shall have an area median income at or 
below 120 percent; 
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(3) may not be subject to a judgment secured 
through litigation with respect to such a loan under 
title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.), may not be subject to an order 
for wage garnishment under section 488A of such 
Act (20 U.S.C. 1095a), and at the time of applica-
tion for participation in the program under this sec-
tion— 
(A) such a loan shall be in repayment sta-
tus as determined under section 428(b)(7)(A) 
of such Act (20 U.S.C. 1078(b)(7)(A)); or 
(B) such a loan shall be in a grace period 
preceding repayment; 
(4) may not have owned a home during the 3- 
year period immediately before the applicant pur-
chases an eligible property with assistance provided 
under this section; 
(5) shall complete a program of counseling with 
respect to the responsibilities and financial manage-
ment involved in homeownership that is approved by 
the Secretary; 
(6) shall be creditworthy, as determined by the 
Secretary and the Director; 
(7) shall agree to use an eligible property pur-
chased with assistance provided under this section as 
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