Trump to unveil plan allowing 401(k) withdrawals for home down payments

President Trump will announce next week a proposal to let Americans use 401(k) funds for home down payments, National Economic Council Director Kevin Hassett said. Hassett said final details are still being finalized and will be presented at the World Economic Forum in Davos.

President Donald Trump is expected to present a proposal next week to let Americans use money from 401(k) retirement accounts toward home down payments. National Economic Council Director Kevin Hassett discussed the idea in an interview and said the administration is framing the move as part of its housing affordability efforts. Hassett said the final plan will be presented at the World Economic Forum in Davos and that specific mechanics remain under discussion. Key details: - Kevin Hassett disclosed the proposal on Fox Business and said Trump will present the final plan in Davos next week. - Hassett described one possible mechanics: a homebuyer could put 10% down and transfer 10% of the home's equity into their 401(k) as an asset. - The administration has highlighted rising mortgage payments and higher typical down payments as context for the proposal. - Currently, 401(k) withdrawals or loans for home purchases often involve taxes or penalties for those under age 59½, while IRAs have a first-time homebuyer exception. - The proposal’s exact rules, tax treatment, and implementation details are still being finalized. - The housing initiative follows a recent administration directive for Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds. Summary: The administration says the proposal is aimed at expanding routes to homeownership within its broader affordability efforts. Final mechanics will be presented at the World Economic Forum in Davos next week. How the change would affect retirement savings, tax treatment, and plan administration is undetermined at this time.