The Benefits of First-Time Homebuyer Savings Accounts

A First-Time Homebuyer Savings Account (FHSA) would allow any Pennsylvanian to set aside savings toward the costs of purchasing a new home. The money saved in the FHSA may be used as a deduction on state income tax. FHSAs are a great way for future homeowners to start saving early for the costs of buying a home. Similar programs exist in Colorado, Iowa, Minnesota, Mississippi, Montana, New York and Virginia and several other states are considering similar programs.

These accounts are simple and easy to set up. An account can be opened at any financial institution. The account owners must designate a qualified beneficiary with the Pennsylvania Department of Revenue. A qualified beneficiary would be a first-time homebuyer who has not owned or purchased, either individually or jointly, a single-family residence during the three-year period prior to the purchase date of a single-family residence.

After the money is used toward the purchase of a first home, documentation must be provided to the Department of Revenue showing that the funds were used toward the purchase of a first-time home.

Frequently Asked Questions