Buy A House, Pay Off Your Student Loans?

So you're in law school (or any school) and you have a mountain of debt. What to do? According to a couple of lawyers who recently visited my Public Interest Lawyering class, you should buy a house, live there a couple of years, sell it and double your money, pay off your loans, and then do it again but use the proceeds from the second home for something else.

How is this possible? The answer seems to be NACA.com, which gives you a home loan for no money down, no closing costs, 1% under prime. You can finance the purchase plus rehab. And it really works. You have to live in the home for two years, and I think it only applies to homes on the “urban frontier” because the program is designed to “stabilize” (is that another word for “gentrify”?) depressed neighborhoods. But hey, if that sounds ok to you, you might want to think about it. This is only going to work in urban areas w/hot housing markets—like DC. But in places w/less crazy housing markets you might do well to find a HUD home; get it cheap, fix it up, live there a couple of years, sell and make a bundle. Why not? We all need a place to live...

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