Overview: Uplifting First-Time Homebuyers Act of 2025
| Bill Number | Chamber | Sponsor | Date Introduced |
|---|---|---|---|
| H.R.3526 | House | Rep. Beth Van Duyne (R-TX-24) | May 20, 2025 |
The Uplifting First-Time Homebuyers Act of 2025 is a bill that increases how much money a first-time home buyer can withdraw from their IRA to use for a down payment. The bill raises the limit from $10,000 to $50,000 -- double the amount proposed by a similar bill, The First-Time Homeowner Savings Plan Act of 2025.
The Uplifting First-Time Homebuyers Act was introduced in the current Congress (119th) on May 20, 2025, in the House of Representatives by Rep. Beth Van Duyne (R-TX-24).
Only about 4% of bills become law, according to FactCheck.org. This article reviews what the Act proposes and how it compares to current law.
Note that bills often change before becoming law. This page will update as new details emerge. For real-time updates about this and other first-time homebuyer programs, subscribe to our newsletter.
Bill Overview
Uplifting First-Time Homebuyers Act of 2025
A bill to increase the IRA penalty-free withdrawal limit for first-time homebuyers to $50,000.
Bill Overview
Uplifting First-Time Homebuyers Act of 2025
A bill to increase the IRA penalty-free withdrawal limit for first-time homebuyers to $50,000.
Official Title as Introduced
To amend the Internal Revenue Code of 1986 to increase the limitation on qualified first-time homebuyer distributions, and for other purposes.
House of Representatives
What Does the Uplifting First-Time Homebuyers Act of 2025 Do?
The Uplifting First-Time Homebuyers Act is a bill that modernizes how first-time home buyers use Individual Retirement Account (IRA) withdrawals to buy their first home.
IRAs are tax-advantaged savings tools similar to employer-sponsored 401(k)s. Consumers add funds to their IRA during their working years where those savings can grow tax-deferred until they're taken out, usually after retire.
Current tax rules let consumer withdraw money from an IRA anytime they want, but if the withdrawal occurs before age 59½, there are typically two charges:
- Regular income tax on the money withdrawn
- A 10% penalty for not waiting until age 59½
The IRS makes several exceptions for the early withdrawal penalty, notably for withdrawing money to buy your first home.
As part of the Taxpayer Relief Act of 1997, Congress established a law allowing first-time buyers to take up to $10,000 from an IRA for buying their first home without being subject to the 10% penalty. In 1997, the median home sale price was was $121,900
Today, the median home sale price exceeds $400,000 but the $10,000 limit has not changed.
The Uplifting First-Time Homebuyers Act raising the penalty-free withdrawal cap to $50,000, matching today's market for housing.
Who Qualifies For The Uplifting First-Time Homebuyers Act?
Unlike other first-time home buyer bills such as the $15,000 First-Time Home Buyer Tax Credit Act, The HELPER Act, and the Downpayment Toward Equity Act, which enforce income limits or occupational requirements, the Uplifting First-Time Homebuyers Act's only qualification requirement is that buyers are buying their first home.
There are no geographic restrictions, special paperwork, or requirements to use a specific type of mortgage. Eligible buyers can use any type of government-backed mortgage such as a conventional mortgages or FHA mortgages, or a private market mortgage like a Non-QM loan.
Must be a first-time home buyer
All first-time home buyers are eligible to use the Uplifting First-Time Homebuyers Act, where "first-time home buyer" is any person who has not owned a home or co-signed on a residential mortgage within 2 years of purchase. This is a different timeframe from the standard first-time home buyer definition used by lenders, which puts the lookback period at 36 months.
Reference: Who qualifies as a first-time home buyer
| Situation | First-Time Buyer? |
|---|---|
| Never owned a home | Yes |
| Hasn't owned a home in the last 2 years | Yes |
| Owned a home within the last 2 years | No |
| Only owned commercial property (not residential) | Yes |
| Inherited a home but did not live in it as a primary residence | Yes |
| Owned a vacation home within the last 2 years | No |
| Partial owner in a timeshare | Yes |
| Owns an investment property | Yes |
Funds must be used within 120 days of withdrawal
Home buyers using the Uplifting First-Time Homebuyers Act must use their IRA withdrawals within 120 days of withdrawal, and for eligible costs only.
Eligible costs include down payment, origination fees, discount points, title insurance, home inspection fees, appraisal fees, and more. Withdrawn funds can also be used for construction costs and land costs for buying or rebuilding a home.
The Uplifting First-Time Homebuyers Act does not allow for withdrawn funds to be used for moving expenses, appliances, furniture, home improvements made after purchase, real estate taxes, or homeowners insurance.
Reference: Allowable Uses for IRA Funds Under the Uplifting First-Time Homebuyers Act
| Expense Type | Allowable? | Example Uses |
|---|---|---|
| Down payment | Yes | Money used directly for the home's purchase price |
| Home inspection | Yes | Inspection costs before buying |
| Loan origination fees | Yes | Lender fees for setting up the mortgage |
| Construction costs | Yes | Costs to build or rebuild a home |
| Home appraisal | Yes | Lender-required appraisal fee |
| Land purchase for building a home | Yes | Buying land for a primary residence |
| Settlement fees | Yes | Transfer taxes, recording fees |
| Closing costs | Yes | Escrow fees, attorney fees, title insurance |
| Furniture and appliances | No | Beds, sofas, refrigerators, washers, dryers |
| Homeowners insurance | No | Property insurance premiums |
| Property taxes | No | Monthly or yearly property tax payments |
| Home improvements after purchase | No | Remodeling, landscaping, renovations |
| Moving expenses | No | Truck rental, hiring movers |
The $50,000 limit is lifetime per individual
The Uplifting First-Time Homebuyers Act's $50,000 withdrawal limit is a lifetime cap per individual. Once you use the full amount, you cannot take additional penalty-free withdrawals for future home purchases.
In real life, this means if you're married and both spouses qualify as first-time homebuyers, each spouse can withdraw up to $50,000 from their own IRA accounts for a total of $100,000 in penalty-free withdrawals.
The limit applies to the individual, not the account. If you have multiple IRAs, the $50,000 cap is shared across all of them. You cannot withdraw $50,000 from each IRA you own.
Reference: How the $50,000 Lifetime Limit Works
| Scenario | Total Available | Notes |
|---|---|---|
| Single, one IRA | $50,000 | Max from one account |
| Single, multiple IRAs | $50,000 | Limit applies across all accounts |
| Married, both qualify | $100,000 | $50,000 per spouse |
| Married, one qualifies | $50,000 | Only qualifying spouse withdraws |
| Previously withdrew $15,000 | $35,000 | $35,000 left of lifetime limit |
| Previously withdrew $50,000 | $0 | No more penalty-free withdrawals |
Who Sponsors the Uplifting First-Time Homebuyers Act in Congress?
The bill was introduced in the House of Representatives on May 20, 2025, by Rep. Beth Van Duyne (R-TX-24).
For the latest legislative updates, see the Bill Tracker above.
Frequently Asked Questions About the Uplifting First-Time Homebuyers Act
Get answers to common questions about the proposed Uplifting First-Time Homebuyers Act, including the new $50,000 IRA withdrawal cap and what counts as a qualified expense.
What is the Uplifting First-Time Homebuyers Act of 2025?
The Uplifting First-Time Homebuyers Act raises the IRA first-time homebuyer penalty-free withdrawal limit from its current $10,000 limit to $50,000.
Who qualifies as a first-time homebuyer under this Act?
The Uplifting First-Time Homebuyers Act uses the standard IRS definition for first-time home buyer: any person who has not owned a principal residence in the prior 2 years. This is different from how mortgage lenders define first-time home buyer.
When would The Uplifting First-Time Homebuyers Act's $50,000 IRA withdrawal limit be available?
If the bill passes, it applies for taxable years beginning after December 31, 2024.
What does The Uplifting First-Time Homebuyers Act let home buyers use IRA funds for?
First-time buyers can use The Uplifting First-Time Homebuyers Act for Qualified acquisition costs for down payment, closing costs, financing cost, and the costs to construct or reconstruct a principal residence.
Can married couples withdraw more than $50,000 under The Uplifting First-Time Homebuyers Act?
Yes. The The Uplifting First-Time Homebuyers Act $50,000 cap is per individual. If both spouses qualify, each may withdraw up to $50,000 from their own IRAs for a combined $100,000, subject to normal tax rules.
Does this bill affect Roth and Traditional IRAs differently?
No. It only changes the penalty-free cap. Income-tax treatment still follows existing Roth and Traditional IRA rules. Consult a tax professional for your situation.
