H.R. 7402

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7402 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7402

To amend the Internal Revenue Code of 1986 to allow distributions from 
qualified tuition programs for first home purchases, and for other 
purposes.

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IN THE HOUSE OF REPRESENTATIVES

February 5, 2026

Mr. Moore of North Carolina introduced the following bill; which was 
referred to the Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to allow distributions from 
qualified tuition programs for first home purchases, and for other 
purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Unlocking Homeownership Act''.

SEC. 2. ALLOWANCE OF DISTRIBUTIONS FROM QUALIFIED TUITION PROGRAMS FOR 
FIRST HOME PURCHASES.

(a) In General.--Section 529(c)(3) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
``(F) Distributions for first home purchases.--
``(i) In general.--Subparagraph (A) shall 
not apply to any qualified first-time homebuyer 
distribution.
``(ii) Qualified first-time homebuyer 
distribution.--For purposes of this 
subparagraph, the term `qualified first-time 
homebuyer distribution' means any distribution 
from a qualified tuition program of a 
designated beneficiary which is received by 
such beneficiary to the extent such 
distribution is used by the beneficiary before 
the close of the 120th day after the day on 
which such distribution is received to pay 
qualified acquisition costs with respect to a 
principal residence of a first-time homebuyer 
who is such beneficiary, the spouse of such 
beneficiary, or any child, grandchild, or 
ancestor of such beneficiary or the 
beneficiary's spouse.
``(iii) Qualified acquisition costs.--For 
purposes of this subparagraph, the term 
`qualified acquisition costs' has the meaning 
given that term in section 72(t)(8).
``(iv) First-time homebuyer; other 
definitions.--For purposes of this 
subparagraph--
``(I) First-time homebuyer.--The 
term `first-time homebuyer' means any 
individual if such individual (and if 
married, such individual's spouse) had 
no present ownership interest in a 
principal residence during the 2-year 
period ending on the date of 
acquisition of the principal residence 
to which clause (ii) applies.
``(II) Principal residence.--The 
term `principal residence' has the same 
meaning as when used in section 121.
``(III) Date of acquisition.--The 
term `date of acquisition' means the 
date on which a binding contract to 
acquire the principal residence to 
which clause (ii) applies is entered 
into, or on which construction or 
reconstruction of such a principal 
residence is commenced.
``(v) Special rule where delay in 
acquisition.--If any distribution from a 
qualified tuition program fails to meet the 
requirements of clause (ii) solely by reason of 
a delay or cancellation of the purchase or 
construction of the residence, the amount of 
the distribution may be transferred to another 
qualified tuition program of the designated 
beneficiary as provided in subparagraph 
(C)(i)(I), or an ABLE account of such 
beneficiary as provided in subparagraph 
(C)(i)(III), determined by substituting `120 
days' for `60 days' in subparagraph (C)(i), 
except that--
``(I) subparagraph (C)(iii) shall 
not be applied to such transfer, and
``(II) such amount shall not be 
taken into account in determining 
whether subparagraph (C)(iii) applies 
to any other amount.
``(vi) Recontributions.--
``(I) General rule.--Any designated 
beneficiary who received a qualified 
distribution may, during the applicable 
period, make one or more contributions 
in an aggregate amount not to exceed 
the amount of such qualified 
distribution to any qualified tuition 
program or ABLE account of such 
beneficiary to which a transfer of such 
distribution could be made under 
subclause (I) or (III) of subparagraph 
(C)(i).
``(II) Treatment of repayments.--
For purposes of this paragraph, if a 
contribution is made pursuant to 
subclause (I) with respect to a 
qualified distribution, then the 
designated beneficiary shall, to the 
extent of the amount of the 
contribution, be treated as having 
received the qualified distribution as 
a transfer under subparagraph (C)(i) 
within 60 days of the distribution.
``(III) Qualified distribution.--
For purposes of this clause, the term 
`qualified distribution' means any 
distribution which is a qualified 
first-time homebuyer distribution, 
which was to be used to purchase or 
construct a principal residence in a 
qualified disaster area but was not so 
used on account of the qualified 
disaster with respect to such area, and 
which was received during the period 
beginning on the date which is 180 days 
before the first day of the incident 
period of such qualified disaster and 
ending on the date which is 30 days 
after the last day of such incident 
period.
``(IV) Applicable period.--For 
purposes of this clause, the term 
`applicable period' means, in the case 
of a principal residence in a qualified 
disaster area with respect to any 
qualified disaster, the period 
beginning on the first day of the 
incident period of such qualified 
disaster and ending on the date which 
is 180 days after the applicable date 
with respect to such disaster.
``(V) Qualified disaster.--For 
purposes of this clause, the term 
`qualified disaster' means any disaster 
with respect to which a major disaster 
has been declared by the President 
under section 401 of the Robert T. 
Stafford Disaster Relief and Emergency 
Assistance Act after the date of the 
enactment of this clause.
``(VI) Qualified disaster area.--
For purposes of this clause, the term 
`qualified disaster area' means, with 
respect to any qualified disaster, the 
area with respect to which the major 
disaster was declared under the Robert 
T. Stafford Disaster Relief and 
Emergency Assistance Act.
``(VII) Incident period.--For 
purposes of this clause, the term 
`incident period' means, with respect 
to any qualified disaster, the period 
specified by the Federal Emergency 
Management Agency as the period during 
which such disaster occurred.
``(VIII) Applicable date.--For 
purposes of this clause, the term 
`applicable date' means the latest of 
the date of the enactment of this 
subparagraph, the first day of the 
incident period with respect to the 
qualified disaster, or the date of the 
disaster declaration with respect to 
the qualified disaster.''.
(b) Effective Date.--The amendment made by this section shall apply 
to distributions made after the date of the enactment of this Act.
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