Bill Proposes ‘Pandemic Savings’ for First-Time Home Buyers
A new bill introduced into the U.S. House of Representatives would allow first-time home buyers to withdraw funds tax-free from their retirement accounts under the umbrella of coronavirus-related distributions to use toward a down payment on their first home. Rep. Sean Maloney, D-N.Y., introduced the bill this week, a measure that the National Association of REALTORS® supports in helping first-time buyers achieve homeownership.
The First-Time Homebuyer Pandemic Savings Act would allow up to $25,000 of a coronavirus-related retirement distribution to be tax-exempt and penalty-free as long as it is put toward the down payment on a first home. The bill modifies a provision in the CARES Act that provides a penalty-free distribution from an eligible retirement plan or IRA of up to $100,000 without having to pay an early withdrawal penalty.
NAR is calling on members of the U.S. House of Representatives to cosponsor the bill.
“While various barriers have stood in the way of homeownership for younger generations, COVID-19 has pushed the American dream further out of reach for countless families and individuals by no fault of their own,” says NAR President Vince Malta. “This legislation would make a tremendous difference to those struggling to save for the down payment on their all-important first home.”
Saving for a down payment remains a major obstacle to homeownership for young Americans.
“Making sure the next generation of homeowners have the resources they need to buy their first home is going to play a big role in our economic recovery,” Rep. Maloney said in a statement. “This bill is a way to bring new opportunity to new homebuyers and help young families get one step closer to realizing the American dream.”
Source: National Association of REALTORS®