First-Time Home Buyer Empowerment Act
Sponsored By: Senator Husted, Jon [R-OH]
Introduced
Summary
This bill would let some money in a long‑held 529 college savings account be used to buy a first home, creating a limited tax‑favored path from college savings to house purchases. It shields a portion of original contributions plus earnings from the usual 529 nonqualified withdrawal rules when strict timing, holding, and dollar limits are met.
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- First‑time homebuyers: A designated beneficiary could tap 529 funds for a principal residence after the account has been in a qualified tuition program for 15 years. The special withdrawal is capped so a beneficiary’s lifetime use under this rule and a related rollover rule cannot exceed $35,000.
- Account rules and safeguards: The special rule applies only to the original beneficiary or a same or younger generation successor. Withdrawals must be used within 60 days of distribution, with a 120‑day extension and rollover to another 529 or ABLE account allowed for purchase delays. If the home is sold or stops being the principal residence within 5 years a partial tax recapture applies, reduced by 20 percent for each full year since purchase.
- Tax coordination: The bill adjusts the Roth IRA rollover limits so the same $35,000 cap applies and prevents double counting of these tax‑favored distributions.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
Use 529 savings for first home
If enacted, this bill would let you use part of a 529 college-savings account to buy your first principal residence. You would have to be the account's designated beneficiary and the account must have been maintained at least 15 years. The eligible amount would be limited to contributions (and earnings attributable to them) made before the five-year lookback, and your lifetime limit would be $35,000. You would need to use the distribution within 60 days to buy the home. If the purchase is delayed or canceled, you could recontribute the amount to a 529 or an ABLE account within 120 days. If you sell the home or stop using it as your main home within five years, you would face a recapture tax (the tax that would have applied plus interest), reduced by 20 percent for each full year you owned and lived in the home. The rule would apply only to the original beneficiary or a successor of the same or a younger generation and would coordinate with special Roth IRA rollover limits. These rules would apply to distributions made in tax years beginning after the date of enactment.
Sponsors & CoSponsors
Sponsor
Husted, Jon [R-OH]
OH • R
Cosponsors
Sen. Bennet, Michael F. [D-CO]
CO • D
Sponsored 8/4/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov