Congressman Tim Moore Introduces the Unlocking Homeownership Act to Support the American Dream

WASHINGTON, D.C. — Recently, Congressman Tim Moore (NC-14) introduced H.R. 7402, the Unlocking Homeownership Act, which would expand opportunities for first time homebuyers by increasing savings flexibility. June is National Homeownership Month, a time to recognize the importance of homeownership and the challenges many Americans face in purchasing their first home.

“The American Dream has always included the opportunity to own a home, but that goal is moving further out of reach for many young families,” said Congressman Tim Moore. “Today, the average first time homebuyer is nearly 40 years old, a sign of how difficult it has become to save for a down payment and purchase a home. This legislation would give families greater flexibility to use money they have already saved toward the purchase of a first home.”

Specifically, this legislation would allow families to use funds from 529 savings plans toward the purchase of a first home without incurring federal tax penalties. The rules for this withdrawal closely align with the Traditional IRA first-time homebuyer exception, simplifying how families can use long-term savings.

Under current law, 529 savings plans may be used for qualified education expenses, but families who withdraw funds for other purposes may face taxes and penalties. This legislation would expand the allowable uses of these accounts, giving Americans greater flexibility to use their savings to purchase a first home.

Representative Mike Lawler (NY-17) is a cosponsor of the legislation. The Unlocking Homeownership Act is supported by the National Association of REALTORS. 

“The National Association of REALTORS® applauds Representative Tim Moore for introducing the Unlocking Homeownership Act, a commonsense proposal that expands pathways to homeownership by allowing tax-free 529 education plan distributions for first-time homebuyers. By treating these distributions as qualified under Section 529, with clear timing and usage requirements that mirror the successful IRA first-time homebuyer approach, this legislation would enable families with excess education savings funds to use them as into a down payment and move into homes of their own. NAR believes policies that broaden access to homeownership are critical to strengthening communities and expanding economic opportunity for Americans striving to achieve the dream of owning a home,” said NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn.

Read the full text of the bill HERE.