First-time homebuyers could soon get a new way to find $35,000 for a down payment

There’s a potential game-changer on the horizon for first-time homebuyers: a bipartisan bill is in the works that could allow you to tap up to $35,000 from your 529 college savings account for a down payment—penalty-free. Expanding the flexible use of 529 funds like this could open new doors for families striving to afford their first home.

Over my 35 years in the mortgage world, I’ve watched buyers wrestle with the down payment hurdle, even when they’ve done everything right. Options like this bill demonstrate how policy can evolve to reflect real-world challenges and give buyers more control. If passed, this change could help more families step confidently into homeownership, unlocking opportunities that once felt out of reach. That’s the kind of progress I love to see in our industry.