Rep. Haley Stevens (D-MI) Introduces New Bill to Make it Easier for First Time Homebuyers to Afford a Down Payment

WASHINGTON, DC – Today, U.S. Representative Haley Stevens (D-MI) introduced the First Time Homeowner Savings Plan Act in the U.S. House of Representatives. This bill increases the amount of money individuals may withdraw from their IRA to use to purchase their first home from $10,000 to $25,000 making it easier to gain the first step on the property ladder while continuing to build their wealth and securing a safe place to live. 

Key provisions:

• Amends the Internal Revenue Code to increase from $10,000 to $25,000 the maximum amount that may be withdrawn, without penalty, from a qualified retirement plan for the purpose of assisting a first-time homebuyer in purchasing a principal residence.
• This increased distribution amount is adjusted annually for inflation for taxable years beginning after 2025.

“Buying a home not only provides families a place to live but is key to building wealth,” said Rep. Haley Stevens (D-MI). “By increasing the amount first time buyers may withdraw from their IRA savings to purchase a home, this bill will encourage young Americans to start saving earlier, help millions of Americans purchase their first homes, and allow the next generation to build wealth through homeownership. That’s why I’m proud to introduce the First Time Homeowner Savings Plan Act, so every American has a shot at the American dream.”

“ABA is pleased to support Rep. Stevens’ First Time Homeowner Savings Plan Act, which would help more Americans afford a down payment,” said ABA Executive Vice President for Congressional Relations Kirsten Sutton. “With high prices keeping a home just out of reach for so many, this bill will help empower more prospective homebuyers to secure their dream of homeownership.” 

“On behalf of the Mortgage Bankers Association (MBA), we are pleased to support the First Time Homeowner Savings Plan Act,” said Bill Killmer, SVP of Legislative and Political Affairs. “By raising the IRA withdrawal limit for first-time home purchases to $25,000 and indexing it to inflation, this legislation connects the goal of homeownership with retirement savings, encouraging younger individuals to start saving earlier in order to build wealth over a longer period.”

“The National Association of REALTORS® fully supports the current-law incentive that allows first-time homebuyers to withdraw up to $10,000 from a qualified retirement plan without having to pay the early withdrawal penalty,” said NAR President, Kevin Sears. “This provision has helped many thousands to gather the necessary funds for a down payment.  However, when this provision was enacted in the early 1990s, $10,000 went a lot further than it does today.  So, increasing the amount to $25,000 is a much needed and very helpful step to assist families with the increasingly elusive but often vital goal of purchasing their first home.  We express our gratitude to Rep. Stevens for her leadership on this important legislation.”

The First Time Homeowner Savings Plan Act is endorsed by the National Association of Realtors, the American Bankers Association, and the Mortgage Bankers Association. 

Full text of the legislation can be found here.

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