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Proposed bills to help first-time homebuyers

If passed, the account would allow people to put up to $50,000 aside starting in 2022.
Published: May. 5, 2021 at 11:54 AM EDT|Updated: May. 10, 2021 at 5:50 PM EDT
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ESCANABA, Mich. (WLUC) - The Michigan legislature is working to create the First-Time Homebuyer Savings Account.

“It’s a tax shelter for your money, but it’s going towards something that you can earn, such as equity on a house but it’s also going to be able to gain interest while it is in those accounts,” said Christopher Germain, president of Upper Peninsula Realtors.

If passed, the account would allow people to put up to $50,000 aside starting in 2022.

“You can put $5,000 to $10,000 a year sheltered from your income tax in the state of Michigan,” said Germain.

Both the State House and the State Senate have passed identical bills with bipartisan support, so the measure is close to the governor’s desk.

“Right now there is a lack of inventory but there are homes that are available and rent is really expensive so it would help get them into more affordable housing,” said Jaylene Kenneally, a mortgage loan officer for Embers Credit Union.

On a national level, President Joe Biden has proposed a First-Time Homebuyer Tax Credit. If Congress passes the plan, it will help new homebuyers cover their down payment.

“These proposed funds would be essentially like a grant where the first-time homebuyer would not have to pay them back. These funds would be applied directly to their down payment on their home,” said Germain.

The tax credit would cover up to $15,000.

“There’s other things that can help them out with closing costs and prepays but unfortunately not much available if they are lacking a down payment,” said Kenneally.

If both of these proposals pass, Embers Credit Union and Upper Peninsula Realtors believe it will greatly benefit homebuyers in the U.P.

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