Nebraska Advances Plan to Help First-Time Homebuyers Save for Upfront Costs

Nebraska advances plan to help first-time homebuyers save for upfront costs

LB 938 would create tax-advantaged savings accounts to cover down payments, closing fees, and other expenses starting in 2027

A new proposal aimed at making homeownership more attainable in Nebraska is moving forward at the state Capitol.

Lawmakers have given approval to Legislative Bill 938, also known as the First-Time Homebuyer Savings Account Act. The measure would allow Nebraskans to open special savings accounts designed to help cover the upfront costs of buying a home, including down payments, closing costs, and related fees.

Supporters say the bill targets one of the biggest barriers to homeownership.

Over the past decade, the median home price in Nebraska has climbed from about $155,000 to nearly $290,000. At the same time, first-time buyers now make up just 21% of home purchases nationwide, down from around 40% historically.

Under the proposal, individuals could contribute up to $5,000 per year into a dedicated account, with a lifetime limit of $25,000. Married couples could contribute up to $10,000 annually, up to $50,000 total.

Those contributions would be deductible on state income taxes, and any interest earned would grow tax-free as long as the money is used for qualified homebuying expenses.

State Treasurer Joey Spellerberg says the goal is to help Nebraskans start saving earlier and keep more of their money as they work toward buying their first home.

The bill also includes guardrails. Funds withdrawn for non-housing expenses, or too early, could face penalties and repayment of tax benefits.

If signed by the governor, the program would take effect January 1, 2027.

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