NAR Looks to Drum Up Support for Rep. Maloney’s ‘First Time Homebuyer Pandemic Savings Act’
Real Estate In-Depth | July 22, 2020
WASHINGTON—U.S. Rep. Sean Patrick Maloney (NY-18) introduced the “First Time Homebuyer Pandemic Savings Act” on Wednesday (July 22), a new bill that will help first-time homebuyers realize their dreams of homeownership, during and after America’s recovery from the coronavirus public health and economic crisis.
Shortly after its introduction, the National Association of Realtors issued a strong statement supporting Congressman Maloney’s bill.
“Making sure the next generation of homeowners have the resources they need to buy their first home is going to play a big role in our economic recovery. This bill is a smart, innovative way to bring new opportunity to new homebuyers and help young families get one step closer to realizing the American dream,” said Rep. Maloney.
The First Time Homebuyer Pandemic Savings Act allows first-time buyers to withdraw funds from their retirement accounts under the umbrella of coronavirus-related distributions to assist with the purchase of a home. The bill would allow for up to $25,000 of the coronavirus-related distributions to be tax-exempt and penalty-free to be put towards the down payment of a home for new homebuyers. The bill would also extend the coronavirus-related distribution sunset clause to Dec. 31, 2021.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed in March, created a new hardship withdrawal for Americans who invest in 401(k)-type contribution plans or individual retirement accounts (IRAs) for those impacted financially by COVID-19. The coronavirus-related distribution is not subject to the early-distribution penalty of 10% and can be repaid over three years.
First-time homebuyers make up 33% of all homebuyers and many fear a housing market regression is possible given the economic insecurity many first-time homebuyers may feel as the country recovers from the economic crisis caused by the pandemic.
According to new data from the Hudson Gateway Association of Realtors, Orange County home sales declined 26.5% this spring, compared to the same timeframe in 2019.
The National Association of Realtors called on members of the U.S. House of Representatives to cosponsor and support Rep. Maloney’s First Time Homebuyer Pandemic Savings Act.
“While various barriers have stood in the way of homeownership for younger generations, COVID-19 has pushed the American dream further out of reach for countless families and individuals by no fault of their own,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco. “This legislation would make a tremendous difference to those struggling to save for the down payment on their all-important first home. With homeownership remaining one of the best and most sustainable ways for Americans to build wealth, the nation’s 1.4 million Realtors applaud Rep. Maloney for his leadership.”