Business groups and banks back first-time homebuyer savings account with optional employer contributions

Representatives of the Connecticut Business & Industry Association and the Connecticut Bankers Association urged the Banking Committee to pass a first-time homebuyer savings account that would provide state tax benefits for savings used toward down payments and closing costs and allow employers to contribute.

"We believe that this is gonna help to solve or address two of Connecticut's major issues impacting our state's economic growth... workforce growth and retention and the high cost of homeownership," said Pete Myers, senior public policy associate at the Connecticut Business & Industry Association. Myers told the committee the proposal would allow employers to make contributions to employees' accounts, which he said would increase awareness and utilization of the program.

Tom Mangelo and Art Corey of the Connecticut Bankers Association and other industry witnesses supported the bill. They and committee members discussed whether the program should permit first-time purchasers to use accounts for 1-to-4-family multifamily properties; several speakers said CHFA underwriting and residency rules could be used as a starting point to prevent program gaming and to ensure the accounts serve owner-occupants rather than investors.

What it means: Supporters say the program would help lower the upfront cost barrier for first-time buyers, could be used as an employee benefit to recruit and retain workers, and may broaden access if multifamily purchases are allowed under clear residency rules. Committee members asked for follow-up language clarifying owner-occupancy and minimum residency to avoid investor use.

Ending: Supporters said they will work with the committee on technical language and suggested pairing the program with complementary financial-literacy and CHFA programs during bill drafting.