Like many places around the country, Iowa’s potential first-time homebuyers continue to face challenges when they’re ready to make a purchase.
Rising household debt, credit concerns and high prices make saving for a down payment a major hurdle to home ownership. In 2009, 53 percent of all home sales in Iowa were to first-time homebuyers. By 2015, that had dropped to 41 percent.
A new bill (SSB 1056) would create a First-time Homebuyer Savings Program. The money a person contributes would go to a First-time Homebuyer Savings Account to help with a down payment and closing costs on a single-family, owner-occupied home in Iowa.
A first-time homebuyer (and parents or grandparents of a first-time homebuyer) would receive an income tax exemption for savings up to about $2,000 per year for up to 10 years, or $4,000 per year for two first-time homebuyers who file taxes jointly.
Of the 3,317 potential new first-time homebuyers who could participate in this program, it’s estimated that 166 households (5 percent) will purchase newly constructed homes, with the remaining 3,151 households buying existing housing. These potential new first-time homebuyers are expected to pump an additional $6.2 million annually into the Iowa economy, as a result of additional spending associated with home ownership.
The First-time Homebuyer Savings Program could help thousands of Iowans become homeowners and provide a great boost to the Iowa economy.
