The federal proposal known as the Homeownership Savings Act (H.R. 9709), introduced by Representative Haley Stevens (D-Mich.), would create a tax-advantaged vehicle specifically for saving toward a home purchase. Under the plan, contributions could be deducted from taxable income and the account balance would grow tax-free, provided withdrawals are used for qualified expenses like a down payment and closing costs. Newsweek and advocates have framed this as a targeted tool for first-time homebuyers, while analysts note the account could also be a useful stepping stone for new real estate investors seeking an entry point into owning rental property.
The proposal is narrowly constructed: it is meant for people who meet the definition of an first-time homebuyer and restricts use to a first primary residence. That said, the legislation contemplates a range of practical features, including the ability to deduct contributions (within annual caps), tax-free growth similar to a Roth IRA or 529 plan, and permitted employer contributions. These mechanics make the account attractive as a low-barrier savings vehicle, particularly for moderate-income households confronting rising home prices and higher borrowing costs.
How the account would work
At its core, the bill would let eligible savers place money into a dedicated homeownership savings account and claim an income tax deduction for contributions up to set limits; funds would then grow tax-free and be withdrawn tax-free for qualifying purchase costs. The legislation sets a lifetime contribution limit of $40,000 per buyer and annual deductible ceilings that vary by filing status: $3,000 for married couples filing jointly, $2,500 for head of household, and $2,000 for single filers. Employers would be permitted to contribute on behalf of workers, potentially accelerating the savings timeline for some families.
Why investors are watching
While the program is limited to a first primary home, it could still appeal to aspiring landlords because many first purchases can be structured as owner-occupied small multifamily properties (two-to-four units). Through house hacking, a buyer lives in one unit while renting the others, letting rental income defray mortgage payments and build equity that can later support acquisition of a second property. Investors also gain access to benefits such as depreciation and various rental property tax deductions once a property is converted to an investment asset, making the initial owner-occupied purchase a practical first step toward a rental portfolio.
Limits and practical constraints
The account’s modest contribution caps have attracted criticism for doing too little to resolve the broader housing affordability problem. Critics point out that saving $2,000–$3,000 per year toward a $40,000 cap will take years and may not keep pace with price inflation; analysts note that national median home prices have climbed substantially in recent years, citing a roughly 60% rise between 2019 and 2026. Financial advisers argue the scheme reduces friction for savers but does not substitute for more fundamental affordability measures. Despite those concerns, industry trade groups including the Mortgage Bankers Association, the Michigan Bankers Association, and the Community Economic Development Association of Michigan have signaled support, and lawmakers may adjust contribution limits as the bill advances.
Practical saving strategies and complements
For prospective buyers aiming to combine the new account with other financing, pairing the account with a low-down-payment mortgage such as an FHA loan (which can allow down payments as low as roughly 3%–3.5%) makes a purchase more attainable in lower-cost markets. Policymakers have also discussed allowing access to retirement savings—such as withdrawing from a 401(k)—to increase available down payment funds, which could work in tandem with the savings account. On the personal finance side, reaching practical goals will often require multiple tactics: trimming discretionary spending, taking on supplemental work, and tapping employer contributions where available.
Calculating a savings target
To put targets in perspective, a common savings scenario used by financial outlets calculates that saving $30,000 in three years requires around $830 per month. That figure is useful when planning for a combined 3% down payment plus 2%–5% closing costs on an entry-level purchase. Strategies to meet such a monthly goal include reducing housing costs by sharing living space, cutting frequent small expenses, leveraging side income, or asking friends and family to contribute to milestone registries—resources and examples of which have been highlighted in guides such as a 2026 AmeriSave publication.
Bottom line
The proposed tax-free homeownership savings account is not a comprehensive solution to housing affordability, but it could meaningfully shorten the time to a down payment for some first-time buyers and serve as a pragmatic first step toward small-scale property investing. For would-be landlords who can pair the account with low-down-payment loans and rental strategies like house hacking, the legislation could lower the initial financial barrier and open a pathway to building rental income and investment tax advantages. As H.R. 9709 moves through the legislative process, expect supporters and critics to push on contribution levels and eligibility rules, shaping whether the account becomes a widely useful tool or a narrowly helpful program for a subset of buyers.
