Unlocking Homeownership Act

The Unlocking Homeownership Act allows individuals to use funds from 529 college savings plans for their first home purchase, rather than only for education expenses. It specifically permits distributions from these accounts to cover down payments or closing costs for a principal residence, provided the buyer (or their spouse, child, grandchild, or ancestor) has never owned a home in the past two years. Funds must be used within 120 days of withdrawal, and the bill includes a special provision for disaster-affected areas, allowing redirected use of funds if home purchases are delayed due to a federally declared disaster. This policy change directly affects first-time homebuyers who have saved in 529 plans, expanding the permissible use of those savings.