Overview
- National Economic Council Director Kevin Hassett said the administration is developing a policy to allow 401(k) money to be used for home down payments.
- Hassett outlined a possible mechanism that would credit a portion of a buyer’s home equity back into the 401(k) to mitigate retirement impacts.
- Trump has said he is instructing representatives to buy $200 billion in mortgage-backed securities to help reduce mortgage rates and monthly payments.
- Under current rules, most 401(k) withdrawals before age 59½ face ordinary income taxes and a 10% penalty, and the IRA first-time homebuyer exception does not apply to 401(k)s.
- Financial experts quoted in coverage warn that encouraging withdrawals from retirement accounts could harm long-term savings and may not address affordability effectively.