Boston Condo first-time homebuyers to withdraw funds, tax-free, from their retirement accounts under the umbrella of coronavirus-related distributions.
The funds could then be used towards a down payment on a new home, helping more people to attain homeownership, Rep. Maloney said. The National Association of Realtors said this week the bill has its full support.
The bill is known as the “First-Time Homebuyer Pandemic Savings Act”, and would allow up to $25,000 of a coronavirus-related retirement distribution to be tax-exempt and penalty-free as long as it is put toward a down payment on a first home. The bill modifies a provision in the CARES Act that provides a penalty-free distribution from an eligible retirement plan or an IRA of up to $100,000 without having to pay an early withdrawal penalty.
The NAR is calling on members of the U.S. House of Representatives to support the bill.
“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,” NAR President Vince Malta said in a statement. “This legislation would make a tremendous difference to those struggling to save for the down payment on their all-important first home.”
Saving for a down payment remains a major obstacle to homeownership for young Americans.
“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,” Rep. Maloney said in a statement. “This bill is a way to bring new opportunities to new homebuyers and help young families get one step closer to realizing the American dream.”
Original Blog Post
Access to the market through strict and tight credit guidelines as well as competing investors with cash on hand are two of the main reasons we are seeing less first time home buyers in the Boston Beacon Hill condo market.
According to the recent national survey, the National Association of Realtors and Inside Mortgage Finance shows that real estate agents report that about 31 to 34.7 percent of buyers at this time are first time home buyers. The normal percentage should lay around 40 percent.
First time home buyers usually choose to go with FHA (Federal Housing Administration) backed loans due to the 3.5 percent down payment requirement but lately, these loans have become more costly causing a lot of moderate-income first time home buyers to stall the process of moving forward with a purchase of Beacon Hill Condos. Many may think that due to the low-interest rates out there (for now)financing has become more affordable but according to the New York Times and their recent article “Fewer First-Time Buyers,” today’s market is all about the availability of financing, not the interest rates.
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