A new bipartisan bill introduced in the US House of Representatives will enable families to put unused college savings toward a down payment.
The First-Time Homebuyer Empowerment Act (H.R. 7468) would amend the tax code to allow people to withdraw up to $35,000 in leftover college savings from their 529 plans tax free for the purchase of a first home. Currently, funds in 529 plans can only be used for education-related expenses or transferred to a retirement account.
The bill is being presented by Reps. Tom Barrett (R-MI), Tracey Mann (R-KS), Mark Alford (R-MO) and Lou Correa (D-CA).
“Too many families can’t afford homes that work for them, plain and simple,” said Barrett. “An easy first step towards changing that reality is to let homebuyers tap into unused college savings in their 529 accounts and put them towards purchasing their first home. I’m proud to join my colleagues on this legislation to incentivize saving for the future and help the next generation achieve homeownership.”
The bill has been referred to the House Committee on Ways and Means for consideration. At the moment, there is no Senate companion version of the bill.
