Congress moves to ease burden of buying homes

THE BALTIMORE SUN

Some real estate experts expect Congress and the Bush administration to reach an accord this year that will finally allow first-time buyers to make penalty-free withdrawals from their retirement accounts to buy a house.

Proposals aimed at letting cash-strapped buyers tap their Individual Retirement Accounts or other retirement plans have been introduced every year since the mid-1980s. Each proposal has fallen victim to partisan bickering or concerns about their impact on the federal budget deficit.

But now, a renewed sense of partnership on Capitol Hill, coupled with dropping homeownership rates, has Democrats and Republicans lining up behind various IRA proposals that could give the nation's ailing housing market a huge shot in the arm.

Sen. Lloyd Bentsen, D-Texas, will soon introduce a measure that would allow first-time buyers to tap their accounts without paying the 10 percent penalty that the Internal Revenue Service currently levies on early withdrawals.

The bill, which Mr. Bentsen outlined in a recent letter to his colleagues, would also allow parents and even grandparents to make penalty-free withdrawals from their own accounts if the money would be used to help their offspring buy a house.

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