In the aftermath of the 2008-2009 recession, many observers trying to sort out the root causes of the economic downturn pointed to federal policies designed to make it easier to buy a home, particularly using the Fannie Mae and Freddie Mac federal loan institutions.
Advertisements
The concern was that people who did not have the proper finances in place to be able to pay a mortgage had been allowed to buy houses, creating a housing bubble that was doomed to pop.
While the desire to help more Americans own homes hasn’t dissipated since then, a bill moving through the Pennsylvania House of Representatives that looks to foster homeownership is aiming to build a stronger foundation than past efforts.
House Bill 1981, a bipartisan bill cosponsored by state represenatives Ryan Bizarro, D-Erie, and Rosemary Brown, R-East Stroudsburg, would allow the creation of tax-advantaged savings accounts for first-time homebuyers.
Advertisements
Anyone who contributes to such a fund would be able to claim a state income tax deduction for that money. The account holder can contribute up to $5,000 a year, if a single filer, and $10,000 for joint tax filers, and there’s a $50,000 maximum that the account can hold over the course of its 10-year lifespan. Any money not used to buy a house after the 10 years have passed becomes considered taxable income.
The account holder can designate themselves or someone else as beneficiary, and the beneficiary can be changed at will.
Advertisements
The House Urban Affairs Committee gave the bill its unanimous support last week, advancing it to the full House for consideration.
“I would just like to thank … the members of this committee for taking up this bill,” Brown said. “I think it is a very important piece of legislation, increasing homeownership in Pennsylvania. It’s going to benefit our citizens, and it helps them invest in our economy, so thank you for considering this bill.”
“Ideally, purchasing a home and establishing that safe and secure haven for families strengthens communities and provides stability,” Brown said. “Realistically, buying a home for the first time is much easier said than done, as there are many financial obstacles for one to overcome. Other states allow and reward first-time home buyers to deposit money into a savings account, and that’s what the bill Rep. Bizzarro and I are sponsoring would do here in Pennsylvania.”
Advertisements
Bizzarro said it was important that Pennsylvania keep pace with other states that have similar policies.
“Although Pennsylvania has some local programs that offer assistance to first-time buyers, these don’t go far enough,” Bizzarro said in a statement. “It’s time we joined other states that give new buyers additional incentives to save. I’m urging my colleagues to support this legislation so that more residents in the commonwealth can realize the American dream of becoming homeowners.”
Advertisements
The proposed bill has also earned the support of Rep. Joe Emrick, R-Nazareth.
“The dream of home ownership remains alive for many Americans and is still a significant alternative to renting, as well as a great way to build wealth through tax savings and accumulation of equity,” Emrick said in a statement. “The toughest part of realizing that dream is getting it off the ground, and House Bill 1981 helps prospective homeowners take that first step.”
Advertisements
