House Bill Would Let First-Time Buyers Tap 529 College Savings Accounts Penalty-Free
A house committee must act next: committee consideration.
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529 plans are designed to help pay for college, so allowing withdrawals for home purchases could reduce the money available for a student's education. On the other hand, students or recent graduates who don't need all their 529 funds for school would gain flexibility to redirect savings toward buying a first home, which could be a major financial milestone.
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
New legislation would allow first-time homebuyers to tap 529 plans to purchase a home. The bill would amend the Internal Revenue Code to include 'qualified housing expenses' like closing costs and mortgage payments as eligible distributions for those who haven't owned a home in three years.
The First-Time Homebuyer Empowerment Act (H.R. 7468) would enable families to put up to $35,000 in unused college savings from 529 plans toward a first home purchase. The bipartisan bill is designed to help the next generation achieve homeownership by tapping into existing tax-advantaged savings.
U.S. Rep. Tracey Mann and a bipartisan coalition introduced the First-Time Homebuyer Empowerment Act to allow the use of leftover 529 plan funds tax-free for home purchases. Supporters include the National Association of Realtors and the National Association of Homebuilders.
No votes or related bills recorded for this bill yet.
Document Type
Congressional Bill
Official Title
Unlocking Homeownership Act
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