The Homebuyer Assistance Through Tuition Program Distributions: Explained

Overview: Homebuyer Assistance Through Tuition Program Distributions

The Homebuyer Assistance Through Tuition Program Distributions is a bill that permits certain distributions from long-term qualified tuition programs, commonly called 529 plans, to be used for a first home purchase.

For home buyers, the practical impact is simple: money that was saved for education in a tax-advantaged account becomes available for down payment and closing costs when you’re buying your first home. That creates another path to use existing savings without starting from scratch.

The bill was introduced on February 10, 2026, in the 119th Congress and referred to the House Committee on Ways and Means.

Note that bills often change on their way to becoming law, so this page will update as new details emerge. For real-time updates, subscribe to our newsletter.

What Is the Homebuyer Assistance Through Tuition Program Distributions?

A 529 plan is a tax-advantaged account designed to help families save for education. When money comes out of the account and the withdrawal is used for a qualified purpose, the distribution receives favorable tax treatment under federal rules.

Today, the qualified purposes center on education costs. When money is used for non-qualified purposes, the account owner faces a less favorable tax result on the earnings portion of the withdrawal. That tax difference is why many families leave 529 money untouched unless it’s going to education.

The Homebuyer Assistance Through Tuition Program Distributions expands what counts as a qualified use. It treats certain 529 plan distributions as qualified when the money is used for a first home purchase. For first-time home buyers who already have 529 savings, this bill turns an education-focused account into a home buying resource.

Who Benefits From the Homebuyer Assistance Through Tuition Program Distributions?

This bill is designed for first-time home buyers with access to money held in a long-term qualified tuition program.

You benefit when:

• You are buying your first home
• You have savings in a 529 plan that you want to use for home buying costs
• You prefer to use existing savings for a down payment and closing costs

This bill also supports families who saved in a 529 plan for a child or relative and want that saved money to help with a first home purchase instead of, or in addition to, education expenses.

How The Homebuyer Assistance Through Tuition Program Distributions Works

The bill works by changing federal tax rules for 529 plans so that certain distributions used for a first home purchase are treated as qualified distributions.

Here’s how that matters in real life.

1. It adds “first home purchase” as a qualified reason to withdraw 529 funds

How things work today: 529 plan withdrawals receive favorable tax treatment when they are used for qualified education costs. Non-education uses do not receive the same treatment.

What the bill changes: the bill treats certain 529 plan distributions as qualified when used for a first home purchase.

Example: You have $20,000 saved in a 529 plan and you are buying your first home. Under this bill, you can use an eligible distribution from the 529 plan for home purchase costs such as down payment and closing costs, and the withdrawal is treated as qualified under the updated rules.

2. It gives first-time buyers another way to cover down payment and closing costs

How things work today: Many buyers cover upfront costs using checking and savings, gift funds from family, proceeds from selling another home, or down payment assistance programs when available.

What the bill changes: it adds 529 plan funds to the list of savings sources you can use for a first home purchase under the qualified distribution rules.

Example: Your down payment and closing costs total $18,000. You plan to use $10,000 from your savings account and $8,000 from an eligible 529 plan distribution. This bill supports that plan by treating the 529 plan withdrawal as qualified when used for your first home purchase.

3. It updates the Internal Revenue Code rules that define qualified distributions

How things work today: The Internal Revenue Code sets the list of qualified expenses that determine whether a 529 plan distribution receives favorable treatment.

What the bill changes: it amends those rules to include first home purchase distributions as qualified under the bill’s terms.

This change matters because it puts home buying on the same “approved uses” list as education for the specified withdrawals, which makes it easier to plan around a 529 plan balance when you’re preparing to buy your first home.

Who Sponsors the Homebuyer Assistance Through Tuition Program Distributions?

The Homebuyer Assistance Through Tuition Program Distributions is introduced in the House as H.R. 7468 and is currently referred to the House Committee on Ways and Means.

For the latest legislative updates and cosponsors, see the Bill Tracker above.