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Congress·In Committee·25 days ago

House Bill Would Let First-Time Buyers Tap 529 College Savings Accounts Penalty-Free

Also known as: Unlocking Homeownership Act

Legislative Progress

✓ Filed
Review
House
Senate
President

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Key Points

  • This bill would change the rules for 529 plans, which are special savings accounts usually used for college. It would allow people to take money out of these accounts to help pay for their first home without having to pay the usual tax penalties.
  • To qualify, a person must not have owned a home in the last two years. The money can be used by the person who owns the account, their spouse, or even their children and grandchildren to help them buy a house.
  • The money must be used to pay for the home within 120 days after it is taken out of the account. If a home sale falls through or is delayed, the bill allows the money to be put back into the savings account so the owner doesn't get in trouble with the IRS.
  • This plan aims to help more people afford a home by giving them more flexibility with their savings. It recognizes that for some families, owning a home might be just as important for their future as getting a college degree.
TaxesHousingEducation

Milestones

2 milestones2 actions
Feb 5, 2026House

Referred to the House Committee on Ways and Means.

Feb 5, 2026

Introduced in House

Related News

3 articles
ThinkAdvisor·21 days ago

New Bill Lets First-Time Homebuyers Tap 529 Plans

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.

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Weekly Real Estate News·19 days ago

New Bill Would Allow Homebuyers to Put Unused College Savings Toward a Down Payment

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.

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Financial Regulation News·18 days ago

Rep. Mann leads bipartisan bill to help first time home buyers

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.

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Source Information

Document Type

Congressional Bill

Official Title

Unlocking Homeownership Act

Bill NumberHR 7402
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.