hold on there's just too much going on in Congress lmao...
Let 529 plan money be used for first home purchase without penalty
Rep. Moore (R-NC), referred to Ways and Means Committee
Introduced in House, awaiting committee action
The bill amends tax law to allow penalty-free withdrawals from 529 college savings plans to cover costs of buying a first home. Sponsor Tim Moore is a North Carolina Republican and the bill is in the House Ways and Means Committee, which handles tax legislation. 'In committee' means it hasn't had a full House vote yet.
Introduced Feb 5, 2026
This bill has been introduced in its chamber of Congress. It has been assigned a bill number and referred to a committee for review. Most bills never advance past this stage. The committee may hold hearings, gather expert testimony, and amend the bill before deciding whether to send it to the full chamber for a vote.
Currently, 529 plan withdrawals for non-education costs are taxed and penalized. This bill removes those penalties for first-time home purchases, defined as no home ownership in the prior 2 years. The home must be your principal residence. If a disaster prevents the purchase, you have extra time to recontribute the funds.
Supporters Say
It helps families use their own savings to achieve homeownership without extra tax burdens.
Critics Say
It could reduce education savings, as families might raid college funds for a down payment.
Supporters argue that homeownership builds wealth and this gives families more flexibility. Critics worry that this undermines the original purpose of 529 plans — saving for education — and could leave students with less for college.