Rep. Steube Introduces Legislation to Help Americans Achieve Homeownership

WASHINGTON, D.C.-U.S. Representative Greg Steube (R-Fla.) and Representative Jimmy Panetta (D-Calif.) introduced the Homeownership Opportunity Act, legislation that allows penalty-free early distributions from workplace retirement savings for down payments and closing costs when purchasing a primary residence. Qualifying distributions used for either purpose are excluded from gross income.

"Hardworking Americans who have spent years saving for their future shouldn't be penalized for wanting to buy a home," said Rep. Steube. "With housing costs continuing to rise, my bill gives Americans the freedom to use their own retirement savings to achieve the American Dream without being hit with unnecessary taxes and penalties."

"As the cost of living continues to rise, housing affordability remains the number one challenge facing families in California's 19th Congressional District," said Rep. Panetta. "I'm proud to help introduce the bipartisan Homeownership Opportunity Act to give families more flexibility to cover down payments and closing costs. Together, we must keep working to give families more options to achieve homeownership and the foundation for the American Dream."

The Homeownership Opportunity Act generally allows qualifying distributions up to an aggregate limit equal to the greater of $40,000 or 40 percent of an individual's vested retirement account balance, reduced by prior qualifying distributions.

This legislation applies to eligible workplace retirement plans, including 401(k), 403(b), and certain 457 plans. Individuals may recontribute withdrawn funds within three years, including through an Individual Retirement Account (IRA) if they choose to separate from their employer.

The legislation would apply to qualifying distributions made in taxable years beginning after December 31, 2025, and would sunset after December 31, 2035.

"Homeownership is a cornerstone of financial security, stability, and the opportunity to build long-term wealth," said Joel Rhoades, CEO of Epcon Communities. "For many prospective homebuyers, the upfront costs of purchasing a home remain one of the biggest barriers to achieving the American Dream. The Homeownership Opportunity Act would provide greater flexibility for individuals and families to use their eligible 401(k) savings toward purchasing a primary residence, helping more Americans take the next step toward homeownership. As builders, we know that expanding access to homeownership strengthens communities, creates opportunities for families to build equity, and supports the continued growth of the residential construction industry. We applaud Representatives Steube, Panetta, and Carey's leadership in advancing practical solutions that help more Americans turn their homeownership goals into reality."

"Expanding access to homeownership is an investment in the financial future of American families," said Rebecca Weber, Chairwoman of AMAC Action. "The Homeownership Opportunity Act offers prospective buyers another tool to overcome the financial hurdles of purchasing a home by allowing them to put eligible retirement savings toward this important investment. Americans should have greater flexibility to make financial decisions that support their long-term goals, and homeownership remains a proven path to building equity and establishing greater financial independence. AMAC Action applauds Representatives Steube, Panetta, and Carey for championing legislation that empowers Americans to make the most of their hard-earned savings and pursue the opportunities that come with owning a home."

"The American Dream of homeownership and the opportunity to build a successful career go hand in hand," said Jon Mast, CEO of the Suncoast Builders Association. "The Homeownership Opportunity Act would help families overcome the upfront cost barriers that too often keep that dream out of reach. Expanding access to homeownership also supports meaningful jobs in construction and the skilled trades, where hard work can lead to lifelong careers, business ownership, and financial independence. We applaud Congressman Steube's leadership in advancing legislation that invests in families, strengthens communities, and supports the men and women who build them."

"For many hardworking families, the challenge of buying a home is coming up with the cash needed to close," said Ryan Lieberman, Board President of the Suncoast Builders Association. "The Homeownership Opportunity Act would give buyers greater flexibility to use their earned retirement savings toward eligible closing costs without the added burden of income taxes or early withdrawal penalties. The opportunity to replenish those savings within three years also recognizes the importance of continued retirement planning. We support this practical approach to helping families turn years of hard work and saving into homeownership and the opportunity to build long-term equity."

Rep. Mike Carey (R-Ohio) is an original cosponsor to the legislation.

The full text of the Homeownership Opportunity Act is available here.

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