Rep. Sean Patrick Maloney’s (D-NY) bill will help first-time homebuyers realize their dreams of homeownership
Rep. Sean Patrick Maloney (NY-18) introduced the First Time Homebuyer Pandemic Savings Act, a new bill that will help first-time homebuyers realize their dreams of homeownership during and after America’s recovery from the coronavirus public health and economic crisis.
The First Time Homebuyer Pandemic Savings Act allows first-time buyers to withdraw funds from their retirement accounts under the umbrella of coronavirus-related distributions to assist with the purchase of a home.
The bill would allow for up to $25,000 of the coronavirus-related distributions to be tax-exempt and penalty-free to be put towards the down payment of a home for new homebuyers. The bill would also extend the coronavirus-related distribution sunset clause to December 31, 2021.
“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. This bill is a smart, innovative way to bring new opportunity to new homebuyers and help young families get one step closer to realizing the American dream,” Rep. Maloney said.
According to Maloney, the Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed in March, created a new hardship withdrawal for Americans who invest in 401(k)-type contribution plans or individual retirement accounts (IRAs) for those impacted financially by COVID-19. The coronavirus-related distribution is not subject to the early-distribution penalty of 10% and can be repaid over three years.
National Association of Realtors Supports Bill
The National Association of Realtors (NAR) issued a statement supporting Rep. Maloney’s First Time Homebuyer Pandemic Savings Act. The association called for members of the U.S. House of Representatives to cosponsor the bill that would allow for first-time homebuyers to withdraw funds from their retirement accounts under the umbrella of coronavirus-related distributions to assist with the purchase of a home.
“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,” said NAR President Vince Malta.
According to NAR, the legislation could potentially assist younger Americans struggling to save for their first down payment by combating the difficult climate created from the combination of climbing home prices and tightened inventory.
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