Homebuyer savings plan proposed

Rent prices often equal monthly mortgage payments, but what keeps first-time buyers from purchasing is their inability to make a down payment, said Rep. Melissa Hortman (DFL-Brooklyn Park).

Hortman sponsors HF1987, which would establish a homebuyer savings trust fund between a hopeful buyer and their employer. She said the plan would look similar to a 401k savings plans available to employees and their employers. Likewise, the savings amount would be tax deductible, so long as it is eventually used to purchase a home. Standard penalties would occur if it was not.

Similar programs operate in Illinois, North Carolina and Hawaii, Hortman said.

The House Housing Finance and Policy and Public Health Finance Division approved the bill April 3 and referred it to the House Finance Committee. A companion, SF1963, sponsored by Sen. Leo Foley (DFL-Coon Rapids), awaits action by the Senate Economic Development and Housing Budget Division.