Rep. Maloney Introduces Bill to Help First-Time Buyers
John Jordan | August 2017
MIDDLETOWN—U.S. Rep. Sean Patrick Maloney (D-NY-18) held a press conference at the home of recent first-time homebuyers Taylor and Justin Van Dyke on Aug. 23rd to announce he intends to re-introduce bipartisan legislation to assist first-time homebuyers save for their down payment and pay for closing costs on their initial home purchase.
Rep. Maloney ‘s bill would raise the current $10,000 threshold a homebuyer could withdraw from their IRA account to $25,000 without incurring a tax penalty and would help prospective first-time homebuyers throughout the Hudson Valley.
“Rental costs are out of control and housing isn’t getting any cheaper,” said Rep. Maloney. “It doesn’t make any sense for the government to penalize people who want to make a smart investment in their first home, and my bill would fix that.”
In 1997, Congress passed legislation allowing first time homebuyers to withdraw up to $10,000 from their IRA without incurring a penalty. Under current law, individuals who withdraw more than $10,000 from their IRA before age 59.5 incur a 10% tax in addition to having the withdrawal subject to income taxes. Rep. Maloney’s “First Time Homeowner Savings Plan Act” would increase the limit to $25,000 and index it to account for inflation.
A host of state and local politicians were on hand for the press conference as well as representatives of the Hudson Gateway Association of Realtors, including HGAR Chief Executive Officer Richard Haggerty, COO Ann Garti and National Association of Realtors Federal Political Coordinator Katheryn DeClerck.
“I am thrilled to see Rep. Maloney’s continued and consistent efforts to help residents in the Hudson Valley,” said DeClerck, an associate broker with Better Homes and Gardens Rand Realty’s Goshen office. “I hope the word gets out to people all around the country to support this bill. Homeownership matters to everybody, it contributes to strong communities, people who purchase a home buy furniture and landscaping and invest in their communities.”
DeClerck noted that a typical Orange County homebuyer would need to save at least $13,000 for their down payment and closing costs on purchasing a median-priced home. Rep. Maloney related that homebuyers in more expensive areas of the Hudson Valley require significantly more funds to cover closing costs, which makes his legislation even more necessary for those first-time buyers.
“I support this bill wholeheartedly because I have three grown children, and they’re about to look for a permanent place to live,” said New York State Assemblywoman Aileen Gunther. “I’m hoping this legislation will pass quickly in Washington—I don’t think anybody could oppose it.”
“Homeownership is the foundation of our community,” said Executive Director of the Orange County Rural Development Advisory Corporation Faith Moore. “This provision will be an opportunity to add another tool to our assistance.”
“We strongly support Congressman Maloney’s First Time Homeowner Savings Plan Act,” said Connie Fagan, director of the Putnam County Housing Corporation. “Putnam County Housing Corporation’s Housing Needs Assessment (January 2014) prepared by the Center for Housing Solutions, Pattern for Progress revealed, ‘88% of owners and renters in Putnam County, regardless of income level, are living in unaffordable and severely cost burdened housing.’ This bill would assist more young individuals and families in realizing the dream of owning a home in their community.”
High rents and high housing costs are making it increasingly difficult for first-time homebuyers to save money and invest in a home. First-time homebuyers make up only 32% of all buyers, which is the lowest rate since 1987. Additionally, the number of renters dedicating at least half of their income toward housing hit a record high of 11 million people in 2014, according to the Joint Center for Housing Studies of Harvard University.