U.S. Sen. Todd Young (R-IN) on Sept. 18 cosponsored a bipartisan bill that would give first-time homebuyers greater access to their own savings to use toward that purchase.
The Uplifting First-Time Homebuyers Act of 2025, S. 2867, which is sponsored by U.S. Sen. Ruben Gallego (D-AZ), would increase the Individual Retirement Account (IRA) tax exception withdrawal limit for first-time homebuyers.
“Homeownership is critical to strengthening families, building generational wealth, and cultivating stronger communities,” Sen. Young said. “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.”
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-percent early withdrawal penalty.
At the time, the median home price was $115,000. Today, the median price has nearly quadrupled, yet the $10,000 cap has not been updated, according to information provided by Sen. Young’s staff.
If enacted, S. 2867 would raise the qualified distribution limit to $50,000, better aligning it with today’s housing market realities. The withdrawal could be used to buy, build, or rebuild a first home, the information says.
“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,” said Sen. Gallego.
The bill is endorsed by the National Housing Conference, the National Community Reinvestment Coalition, the National Coalition for the Homeless, the National Association of REALTORS, the National Association of Hispanic Real Estate Professionals, the Mortgage Bankers Association, and the Chamber of Progress.