A bipartisan bill aims to modify tax codes to create an easier path for first-time homebuyers to save for a down payment.
The First Home Savings Opportunity Act of 2025 would allow individuals to invest in a pre-tax savings account to buy a home. Rep. Ashley Hinson (R-Iowa) and Rep. Suhas Subramanyam (D-Va.) are cosponsoring the bill. The plan would allow individuals to save up to $10,000 a year and joint filers up to $20,000 a year without being taxed.
The bill proposes a change to the Internal Revenue Code of 1986, allowing an annual deduction. Single filers earning up to $150,000 per year can continue saving until they reach a maximum of $50,000; joint filers earning up to $236,000 can save up to a cap of $79,000.
"It will restore the American dream of owning a home, which right now is a huge problem," Subramanyam said. "Many people I know have been struggling to buy because the down payments are so high. In Virginia, it’s a competitive process where sellers prioritize larger downpayments. A larger down payment means a lower interest rate."
Both the House of Representatives and Senate presented massive housing-focused packages this year. In October, the Senate passed the Renewing Opportunity in the American Dream to Housing, or ROAD, Act of 2025. The legislation includes dozens of housing-related initiatives, including boosts for transit-oriented developments, homebuyer assistance programs and modified lending standards that extend to manufactured housing. The bill is with the House.
Similarly, the House created its own housing-focused bill. The HOME Reform Act is a modification of the Home Investment Partnerships Program. It, too, focuses on streamlining the construction process and removing regulations. It passed the House and sits with the Senate.
The changes come at a time when the National Association of Realtors reports that the median age of a first-time homebuyer is now 40 years old in the United States. That's double the median age the country had in the 1980s, when people were buying homes in their late 20s.
"When you think about being able to afford your first home, that’s disheartening to see the average age go up so much," Subramanyam said. "This is a critical step in allowing people to be able to buy a home and fulfill their dream of homeownership."
The bill drew widespread support, including from the National Association of Realtors and Mortgage Bankers Association, a Washington, D.C.-headquartered organization focused on the financial health and lending activity in the residential and commercial real estate markets.
"For generations, access to homeownership has been the primary way Americans built wealth and homeownership remains the cornerstone of the American Dream. The bipartisan First Home Savings Opportunity Act would help turn aspiration into action, turning modest savings into the foundation of lifelong stability," Shannon McGahn, National Association of Realtors executive vice president and chief advocacy officer, said in a statement.
The bill is currently in the House and needs to be heard by the U.S. House Committee on Financial Services. Subramanyam said he expects the bill to move forward in early to mid-2026.