Gallego, Young Introduce Bipartisan Bill to Help First-Time Homebuyers

WASHINGTON - Today, Senators Ruben Gallego (D-AZ) and Todd Young (R-IN) introduced the Uplifting First-Time Homebuyers Act to help more Americans buy their first home by increasing the Individual Retirement Account (IRA) tax exception withdrawal limit for first-time homebuyers.

"Homeownership is the cornerstone of the American dream, and for good reason. Owning a home is a proven way to build generational wealth and retirement security. But too many young Americans feel like that dream is out of reach," said Senator Gallego. "By updating the decades-old IRA homebuyer exception to reflect the reality of housing costs today, this bill helps make homeownership possible for the next generation."

"Homeownership is critical to strengthening families, building generational wealth, and cultivating stronger communities. By updating the IRA withdrawal limits to better match the realities of today's economy, our bill will unlock more opportunities for Americans to become homeowners and invest in their future," said Senator Young.

In 1997, Congress created a tax provision allowing first-time homebuyers to withdraw up to $10,000 from their IRAs without incurring the standard 10% early withdrawal penalty. At the time, the median home price was $115,000. Today, the median price has nearly tripled, yet the $10,000 cap has not been updated.

The Uplifting First-Time Homebuyers Act would raise the qualified distribution limit to $50,000, better aligning it with today's housing market realities. This withdrawal can be used to buy, build, or rebuild a home.

The bill is endorsed by the National Housing Conference, National Community Reinvestment Coalition, National Coalition for the Homeless, National Association of REALTORS®, National Association of Hispanic Real Estate Professionals®, Mortgage Bankers Association, and Chamber of Progress.

"Homeownership offers transformational, multi-generational wealth opportunities and housing stability. Senator Gallego's Uplifting First-Time Homebuyers Act will help more households access the opportunity of homeownership," said David Dworkin, President and CEO of the National Housing Conference. "The Act increases the IRA withdrawal exemption from $10,000 to $50,000, which was established in 1997 when the average home cost $115,000. By modernizing this rule, the legislation gives today's first-time homebuyers a better chance to get ahead and be able to afford a home. NHC looks forward to working with Senator Gallego to advance this important proposal in Congress."

"True no-brainers are rare in public policy, but allowing federal home-buying incentives to catch up to the reality of housing prices is as straightforward as it gets," said Jesse Van Tol, President and CEO of the National Community Reinvestment Coalition (NCRC). "I applaud Senator Gallego and Reps. Brownley and Van Duyne for moving to revive tax-free IRA withdrawals for purchasing a first home as a springboard to homeownership."

"Raising the IRA homebuyer exception is a long-overdue update that prudently responds to the challenges of today's housing market and gives first-time buyers, who are largely Latino, a more realistic shot at achieving homeownership. By easing the burden of accessing IRA funds, the Uplifting First-Time Homebuyers Act will empower more first-time buyers to build wealth through homeownership," said Gary Acosta, Co-Founder and CEO, The National Association of Hispanic Real Estate Professionals®.

"The Uplifting First-Time Homebuyers Act is a smart, targeted step toward making homeownership more attainable," said Shannon McGahn, Executive Vice President & Chief Advocacy Officer, National Association of REALTORS®. "By updating the outdated IRA withdrawal limit, this bill could give first-time buyers greater access to their own savings at the moment they need it most. With the median age of first-time buyers now at 38, this commonsense fix helps more Americans achieve the dream of homeownership earlier in life-and start building equity and long-term financial stability."

Read the full bill HERE.

Senator Gallego has made homeownership a priority in the Senate. He supported the First-Time Homebuyer Tax Credit Act to establish a refundable tax credit for first-time homebuyers. He also introduced several bills to increase the supply of housing, including the bipartisan Housing Affordability Act, Housing Supply Expansion Act, Appraisal Industry Improvement Act, HUD-USDA-VA Interagency Coordination Act, and Streamlining Rural Housing Act. Earlier this year, Senator Gallego also introduced the Stop Predatory Investing Act and Humans Over Private Equity (HOPE) for Homeownership Act to go after the hedge funds that own large parts of the housing market and bring down costs for working families.

9/18/25