WASHINGTON — U.S. Sen. Jon Husted, R-Ohio, and Sen. Michael Bennet, D-Colo., introduced bipartisan legislation Tuesday that would let first-time homebuyers put unused college savings toward a down payment on a house.
The First-Time Homebuyer Empowerment Act would allow up to $35,000 in leftover 529 college savings plan funds to be transferred tax-free toward the purchase of a first home, according to a release from Husted’s office. Under current law, 529 plan funds can generally only be used for education-related expenses or rolled into a retirement account.
“I’m focused on helping working families get ahead and making life more affordable. Making homeownership more attainable is a critical part of that effort. Too many Ohioans have worked hard, saved responsibly and still struggle to afford a down payment. By freeing up existing resources, I’m proud this bipartisan bill gives first-time homebuyers another tool to use in pursuing their version of the American Dream,” Husted said in a statement.
Bennet said the bill would help young people and working families across Colorado who struggle to afford a first home by letting them use savings they already have toward a down payment.
Bill Killmer, senior vice president of legislative and political affairs at the Mortgage Bankers Association, said the bill “empowers first-time buyers to use their own savings — at no cost to taxpayers” and that the trade group looks forward to supporting the measure and other efforts to expand homeownership.
A companion bill was introduced in the U.S. House by Reps. Tom Barrett, R-Mich., Tracey Mann, R-Kan., Mark Alford, R-Mo., and Lou Correa, D-Calif. Mann said working together across chambers and parties would give people more flexibility in how they use their savings to build home equity, while Correa said the change would help hard-working taxpayers put money they’ve saved toward one of the largest investments they can make.
The release said the bill builds on Husted’s earlier support for legislation aimed at lowering housing costs by cutting regulatory red tape and unlocking housing supply. The full text of the new bill was made available through Husted’s office.
The information contained in this story was obtained from the office of U.S. Sen. Jon Husted.
