Home Savings Act

HR7185, the Home Savings Act, was introduced in the House of Representatives on January 21, 2026, by Rep. McGuire and subsequently referred to the Committee on Ways and Means. This bill is currently in an early legislative stage, having only been introduced and referred to a committee. It has 4 cosponsors, indicating some initial support, but it has not yet advanced beyond committee consideration. The bill proposes to amend the Internal Revenue Code of 1986 to exclude from gross income certain distributions from defined contribution plans when those funds are used for a down payment or closing costs on a principal residence. This exclusion would apply whether the residence is for the employee or an eligible relative. Additionally, transfers of these distributions to eligible relatives for the same purpose would not be treated as gifts for tax purposes. The provisions are explicitly set to terminate after December 31, 2030, indicating a temporary measure rather than a permanent change to tax law. The bill does not authorize or appropriate any direct funding; instead, it modifies tax treatment, which could indirectly affect the amount of taxable income reported by individuals. Structural beneficiaries of this bill, if enacted, would primarily be individuals seeking to purchase a principal residence, as it would reduce the tax burden on funds withdrawn from retirement accounts for this specific purpose. This could potentially increase the pool of funds available for down payments and closing costs, indirectly benefiting the residential real estate market. Financial institutions involved in mortgage lending and retirement plan administration could see increased activity if more individuals utilize retirement funds for home purchases. However, without specific market data, no direct impact on specific company tickers can be quantified. The bill's temporary nature also limits its long-term structural impact. As of April 7, 2026, the bill remains in the House Committee on Ways and Means. For the bill to progress, it would need to be considered and voted on by this committee, then potentially move to a full House vote. If passed by the House, it would then proceed to the Senate for consideration and a vote, and finally to the President for signature. Given its early stage and the legislative calendar, significant steps remain before it could become law.