An interview with U.S. Senator Jon Husted (R-Ohio) on the First-Time Homebuyer Empowerment Act — bipartisan legislation that would let families put unused 529 college savings toward a first-home down payment.
Introduction
For decades, families have opened 529 plans with one goal in mind: paying for college. But what happens when the child you started saving for at birth chooses an apprenticeship, the military, or a career path that doesn’t require a degree, leaving you with excess funds in your 529 account?
In August 2026, U.S. Senator Jon Husted (R-Ohio), together with Senator Michael Bennet (D-Colo.), introduced the First-Time Homebuyer Empowerment Act, which would allow 529 account beneficiaries to use up to $35,000 of their savings — tax-free — toward the down payment on a first home. It’s the first bill of its kind introduced in the Senate, and it could meaningfully expand what a 529 plan can do for the roughly 17 million families who hold one.
Saving For College’s Chris Stack sat down with Senator Husted to discuss what the bill does, why he’s championing it, and its path to becoming law. The following transcript has been lightly edited for clarity.
The Interview
Chris Stack, SavingForCollege.com: Good morning, Senator, and thanks for taking the time to chat with us. I’m with SavingForCollege.com, and we’re delighted to have you here this morning. I’ll get right into it. You recently introduced, with Senator Bennet, the First-Time Homebuyer Empowerment Act. My first question is: what exactly does this bill do?
Sen. Jon Husted: Well, it would allow the recipient — the beneficiary — of a 529 account, which is often used for college costs, educational costs, to be able to use that account, the excess money that’s in that account or the full amount that’s in there, up to $35,000, for a down payment on a house — a home purchase.
A lot of times, when you think of a 529 account, you started making those decisions when your baby was born. Grandma, Grandpa might have given you a gift. You start a 529 account, you save for 18 years, and then all of a sudden, Junior says, “Hey, I’m not sure I want to go to college.” Or they say, “Hey, I might do this apprenticeship and become an electrician.” Or, “Hey, I might join the military.”
You’ve saved this money for education, but maybe you would rather use it to buy a new home — your first home, a down payment on a home. We want to give Americans the flexibility to do that. Education is part of the American dream, but so is homeownership, and having more flexibility on how you use your savings in 529 accounts is at the center of why we introduced this legislation.
Stack: It sounds like a good idea. As a grandparent myself who owns 529 accounts, it’s great to know that I could use my accounts to help my grandkids this way. But why 529 plans? I always associate them with education.
Husted: Well, it’s a savings vehicle — a savings vehicle that we use for our children and grandchildren. And it’s just been very limited in the flexibility of how you could use that money.
Again, the world changes. An education is a very virtuous thing, but when you start saving for a young person, you don’t know what they’re going to do 18, 20 years later. And I just think that it’s your money. You’ve been saving it. You’ve been doing the things that we say are responsible in this world — because 40 percent or so of all families with children have a 529 account, and the average amount in there, I think, is around $35,000. We just want to give maximum opportunity for people to use that money the way that they want, doing things that are consistent with what we consider to be virtues in America: education and homeownership.
Stack: That sounds great. I know there have been some efforts — some legislation introduced in the House. Why did you decide to champion this bill in the Senate? I think this is the first bill like this that’s been introduced on the Senate side.
Husted: Yeah. Well, my reason is pretty simple: I think it helps working families get ahead. It gives working families more choices. This is at a time when you hear more and more young people are having a harder time buying a home because of prices, the lack of savings, interest rates, and things along those lines. Well, let’s give them one more tool in the toolbox to help them access homeownership. That’s why I introduced it.
Stack: That makes a lot of sense. You’re working on this in a bipartisan fashion with Senator Bennet of Colorado. Is that important to you?
Husted: Look, if you want to get something done in the Senate, you’ve got to have bipartisan support. So we worked to find a good collaborator on this, and Senator Bennet stepped forward and embraced the idea. Now that we have a Democrat and a Republican on the bill, I think that gives us a much better chance of actually getting it across the finish line.
Stack: So what are your expectations as to the likelihood of this becoming law, and what do you hope the timing would be?
Husted: Well, I have high expectations for it. Timing around the U.S. Senate is always the question: When can you find a vehicle to make it part of? When can you get floor time? All of those kinds of things.
And look, people say they care about affordability, right? I hear all the rhetoric of people saying they care about affordability, they care about working families. Well, if you care about affordability and you care about working families, then you should embrace this legislation — because it is one more tool in the toolbox to help families who are trying to do the right thing, trying to save, trying to live responsibly, to give their children an ability to get ahead in life.
Stack: Just one last question. A 529 is a peculiar type of account with many rules. Would this bill be limited to that one young person — the beneficiary you opened the account for 15, 18 years ago? Or would this be available to other family members in their quest for a first-time home purchase as well?
Husted: No, this would be available to siblings — you know, family members. It’s their family savings, it’s their money. Give them some flexibility on how they spend it.
Stack: That is great. Senator, we want to thank you for your time this morning and for your leadership on this initiative. We wish you the best of luck this coming November and in the future with this legislation. Thank you again for joining us.
Husted: Great. Thank you very much for having me.
Conclusion
The First-Time Homebuyer Empowerment Act would mark one of the most significant expansions of 529 plan flexibility since the SECURE 2.0 Act opened the door to Roth IRA rollovers. For the many families whose children take a path other than college — an apprenticeship, military service, or the workforce — the bill would turn stranded education savings into a tax-free head start on homeownership, up to $35,000, and would extend that flexibility to siblings and other family members as well.
The bill’s bipartisan sponsorship gives it a credible path forward, though as Senator Husted acknowledges, Senate timing is never guaranteed. Saving For College will continue to track the legislation and report on what it would mean for 529 account owners.
In the meantime, families weighing what to do with unused 529 funds already have options — including changing the beneficiary, K-12 tuition, apprenticeship costs, student loan repayment, and Roth IRA rollovers. See our guide to what to do with leftover 529 money and our overview of 529 qualified expenses.
Credits
Interview: Chris Stack, Managing Consultant, SavingForCollege.com Guest: U.S. Senator Jon Husted (R-Ohio) Legislation discussed: First-Time Homebuyer Empowerment Act, introduced August 2026 by Sen. Jon Husted (R-OH) and Sen. Michael Bennet (D-CO)
Transcript lightly edited for clarity and readability. Views expressed by the guest, including statistics cited, are his own. For current industry figures, the College Savings Plans Network (CSPN) reports an average 529 account balance of $35,956 across 18.2 million accounts as of June 30, 2026.
