Committee hears proposal for first-time homebuyer savings accounts to boost down-payment ability
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Summary
LB938 would create tax-favored first-time homebuyer savings accounts (up to $5,000/year per individual, $10,000 for couples) to help with down payments and closing costs. The state treasurer and housing groups supported the plan as a voluntary, targeted tool to increase homeownership.
Senator Bob Hallstrom opened LB938 on behalf of Treasurer Joey Spellberg, who asked the committee to create a tax-advantaged, state-level savings vehicle for first-time homebuyers modeled on successful programs in neighboring states.
Under the bill, individuals could contribute up to $5,000 annually ($10,000 for married couples) to a qualified first-time homebuyer savings account at a financial institution; contributions and earnings would be tax-favored if used for qualified expenses such as down payments, closing costs or construction of a primary residence. The treasurer's office estimated that maximizing annual contributions over five years would produce modest state-tax savings — roughly $1,100 for an individual or $2,200 for a couple in the example presented.
Supporters included housing advocates, bankers, homebuilders and development organizations. NeigborWorks Lincoln and the Nebraska Investment Finance Authority highlighted the accounts' potential to pair with down-payment assistance and counseling programs, and community banks said the accounts would encourage saving and home investment in local communities.
Proponents framed LB938 as a demand-side complement to supply-side housing measures: modest, targeted tax incentives to reduce upfront barriers to home purchases. The committee heard pro forma fiscal context and outreach proposals from financial and housing partners. The hearing closed with no formal committee action; sponsors said they will work with stakeholders to refine the design and outreach.
