I 
116TH CONGRESS 
1ST SESSION H. R. 4120 
To amend the Internal Revenue Code of 1986 to provide for the tax treatment 
of first-time homeowner assistance programs established by States. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2019 
Mr. LAWSON of Florida (for himself and Ms. TLAIB) introduced the following 
bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for the tax treatment of first-time homeowner assistance 
programs established by States. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘First-Time Home-
owners Assistance Act of 2019’’. 
SEC. 2. QUALIFIED FIRST-TIME HOMEOWNER ASSISTANCE 
PROGRAM. 
(a) IN GENERAL.—Part VIII of subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new section: 
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‘‘SEC. 530A. QUALIFIED FIRST-TIME HOMEOWNER ASSIST-
ANCE PROGRAM. 
‘‘(a) GENERAL RULE.—A qualified first-time home-
owner assistance program shall be exempt from taxation 
under this subtitle. Notwithstanding the preceding sen-
tence, such program shall be subject to the taxes imposed 
by section 511 (relating to imposition of tax on unrelated 
business income of charitable organizations). 
‘‘(b) QUALIFIED FIRST-TIME HOMEOWNER ASSIST-
ANCE PROGRAM.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified first- 
time homeowner assistance program’ means a pro-
gram established and maintained by a State, or 
agency or instrumentality thereof— 
‘‘(A) under which a person may make con-
tributions to a first-time homeowner assistance 
account, 
‘‘(B) under which neither contributors nor 
beneficiaries are prohibited by reason of resi-
dency within the State, and 
‘‘(C) which meets the other requirements 
of this subsection. 
‘‘(2) CASH CONTRIBUTIONS.—A program shall 
not be treated as a qualified first-time homeowner 
assistance program unless it provides that contribu-
tions— 
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‘‘(A) may only be made in cash, 
‘‘(B) may not be made after the date on 
which the account beneficiary attains age 40, or 
‘‘(C) except in the case of rollover con-
tributions, if such contribution would result in 
aggregate contributions for all taxable years ex-
ceeding $20,000. 
‘‘(3) SEPARATE ACCOUNTING.—A program shall 
not be treated as a qualified first-time homeowner 
assistance program unless it provides separate ac-
counting for each designated beneficiary. 
‘‘(4) LIMITED
INVESTMENT
DIRECTION.—A 
program shall not be treated as a qualified first-time 
homeowner assistance program unless it provides 
that any contributor to, or designated beneficiary 
under, such program may, directly or indirectly, di-
rect the investment of any contributions to the pro-
gram (or any earnings thereon) no more than 2 
times in any calendar year. 
‘‘(5) NO
PLEDGING
OF
INTEREST
AS
SECU-
RITY.—A program shall not be treated as a qualified 
first-time homeowner assistance program if it allows 
any interest in the program or any portion thereof 
to be used as security for a loan. 
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‘‘(6) CERTAIN RESTRICTIONS DISALLOWED.—A 
program shall not be treated as a qualified first-time 
homeowner assistance program unless, with respect 
to each first-time homeowner assistance account, the 
program does not— 
‘‘(A) prohibit the designated beneficiary 
from acquiring or constructing a principal resi-
dence outside of the State, 
‘‘(B) limit any State tax preferences for 
contributions to these accounts based on the 
residence of the contributor or the designated 
beneficiary, or 
‘‘(C) condition withdrawals, or limit any 
State tax preferences for withdrawals, from 
these accounts from being applied only with re-
spect to residences located within the State. 
‘‘(c) FIRST-TIME
HOMEOWNER
ASSISTANCE
AC-
COUNT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘first-time home-
owner assistance account’ means an account estab-
lished under a qualified first-time homeowner assist-
ance program for the purpose of providing qualified 
down payment assistance to the designated bene-
ficiary of the account. 
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‘‘(2) QUALIFIED
DOWN
PAYMENT
ASSIST-
ANCE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
down payment assistance’ means a distribu-
tion— 
‘‘(i) to a designated beneficiary who is 
a first-time homeowner of a principal resi-
dence in the United States, 
‘‘(ii) under a qualified first-time 
homeowner assistance program in connec-
tion with the acquisition, construction, or 
substantial improvement of a principal res-
idence at or before the time of such acqui-
sition or construction, and 
‘‘(iii) the amount of which, when 
added to all prior qualified down payment 
assistance under this subparagraph during 
any taxable year, does not exceed 10 per-
cent of the cost of acquiring, constructing, 
or substantially improving the principal 
residence of the designated beneficiary. 
‘‘(B) 
FIRST-TIME
HOMEOWNER.—The 
term ‘first-time homeowner’ means any indi-
vidual if such individual (and if married, such 
individual’s spouse) had no present ownership 
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interest in a principal residence during the 3- 
year period ending on the date of the acquisi-
tion, construction, or substantial improvement 
of the principal residence. 
‘‘(C) PRINCIPAL
RESIDENCE.—The term 
‘principal residence’ has the same meaning as 
when used in section 121. 
‘‘(D) EXCEPTION.—A residence may be 
taken into account for purposes of this para-
graph only if— 
‘‘(i) the residence is not acquired from 
a person related to the person acquiring 
such residence (or, if married, such indi-
vidual’s spouse), and 
‘‘(ii) the basis of the residence in the 
hands of the person acquiring such resi-
dence is not determined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
residence in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a) (re-
lating to property acquired from a de-
cedent). 
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‘‘(E) CONSTRUCTION.—A residence which 
is constructed by the taxpayer shall be treated 
as purchased by the taxpayer on the date the 
taxpayer first occupies such residence. 
‘‘(F) SPECIAL RULES RELATING TO MAR-
RIAGE.— 
‘‘(i) MARRIED
COUPLES
MUST
FILE 
JOINT RETURN.—If the designated bene-
ficiary is married on the date of the dis-
tribution, the distribution shall not be 
treated as qualified down payment assist-
ance unless the taxpayer and the tax-
payer’s spouse file a joint return for the 
taxable year. 
‘‘(ii) MARITAL
STATUS.—An indi-
vidual legally separated from his spouse 
under a decree of divorce or of separate 
maintenance shall not be considered as 
married. 
‘‘(3) DESIGNATED
BENEFICIARY.—The term 
‘designated beneficiary’ with respect to a first-time 
homeowner assistance account means— 
‘‘(A) the individual designated at the es-
tablishment of the account as the beneficiary of 
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amounts paid (or to be paid) to the account, 
and 
‘‘(B) in the case of a change in bene-
ficiaries described in subsection (d)(3)(C), the 
individual who is the new beneficiary of the ac-
count. 
‘‘(4) MEMBER OF FAMILY.—The term ‘member 
of the family’ means, with respect to any designated 
beneficiary— 
‘‘(A) the spouse of such beneficiary, 
‘‘(B) an individual who bears a relation-
ship to such beneficiary which is described in 
subparagraphs (A) through (G) of section 
152(d)(2), 
‘‘(C) the spouse of any individual described 
in subparagraph (B), and 
‘‘(D) any first cousin of such beneficiary. 
‘‘(d) TAX
TREATMENT
OF
DESIGNATED
BENE-
FICIARIES AND CONTRIBUTORS.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, no amount shall be includ-
ible in gross income of— 
‘‘(A) a designated beneficiary under a 
qualified first-time homeowner assistance pro-
gram, or 
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