Retirement Funds for Homeownership

Economy
1

Proposal Authorizing the Use of Retirement Accounts for Home Purchases and Family Loans

WHEREAS, the cost of homeownership has risen significantly, making it difficult for individuals and families to purchase single-family homes; and

WHEREAS, access to retirement savings can serve as a critical resource to aid in the financing of home purchase; and

WHEREAS, under current regulations, individuals may face penalties or restrictions when attempting to use funds from retirement accounts such as 401(k)s or Individual Retirement Accounts (IRAs) for housing-related purposes; and

WHEREAS, allowing individuals to use their retirement savings for the purpose of purchasing a home or assisting immediate family members with a home purchase can promote homeownership, financial stability, and intergenerational wealth-building;

NOW, THEREFORE, BE IT RESOLVED that the [Governing Body/Organization Name] hereby supports and authorizes the use of 401(k) and IRA retirement accounts for the following purposes, under the terms outlined below:

  1. Use of Retirement Accounts for Home Purchases:
  • Individuals may withdraw or borrow funds from their 401(k) or IRA accounts without penalty for the sole purpose of purchasing a single-family home. or
  • Owner occupied single-family home may roll the 401(k) or IRA accounts without penalty for the sole purpose of purchasing a single-family home. If sold the funds would roll-over to a owner occupied single-family home or return to 401(k) or IRA accounts on a tax-free.
  • No limits shall be imposed by the IRS on the amount withdrawn for the purpose of purchasing a single-family home, allowing individuals full access to their retirement savings for this specific need.
  1. Loaning Retirement Funds to Immediate Family Members:
  • Retirement account holders may loan funds from their 401(k) or IRA to an immediate family member (defined as parents, children, siblings, or spouse) to assist in the purchase of a single-family home.
  • The interest rate on such loans may range from 0% to the statutory interest rate as determined by federal or state law.
  • Loans must be repaid according to a mutually agreed-upon schedule, with a maximum term of [number of years, as determined by applicable laws].
  1. Interest Rates and Repayment Terms:
  • Loans from retirement accounts for home purchases may carry an interest rate from 0% up to the statutory maximum interest rate.
  • Repayment of loans will be structured to ensure that the integrity of the retirement account is maintained and that borrowers are not subjected to undue financial hardship.
  1. No Penalty for Early Withdrawal or Loan:
  • No early withdrawal penalties shall be imposed on individuals using their 401(k) or IRA funds for the purchase of a home or for loaning funds to immediate family members for the same purpose, provided the withdrawal or loan complies with the terms set forth in this resolution and applicable laws.

BE IT FURTHER RESOLVED that this proposal shall take effect immediately upon its adoption and shall apply to all eligible retirement account holders and their immediate family members, subject to compliance with all federal and state regulations.

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