2025: The Year of the Home Buyer Savings Account?

How This Legislation Can Transform Homeownership Opportunities in West Virginia

For the past two years, the West Virginia Association of REALTORS® has been advocating for a critical piece of legislation: the Home Buyer Savings Account (HBSA). While progress has been made, the bill has not yet crossed the finish line. This year, we remain optimistic that 2025 will be the year this legislation finally passes, thanks to strong support from Delegate Patrick Lucas and Delegate Trenton Barnhart, who introduced the bill last session.

What is the Home Buyer Savings Account?

The HBSA is a proposed program designed to help West Virginians save for one of life’s biggest milestones: buying a home. It creates a tax-advantaged savings account specifically for the purchase of a first home or new home. Contributions to the account would be tax-deductible, and the interest earned would grow tax-free as long as the funds are used for qualifying expenses related to the purchase of a home.

A standout feature of this program is that family members and friends can contribute to the account. This means loved ones—such as parents, grandparents, or friends—can help build savings faster, playing a direct role in supporting future homeowners.

What Are Qualified Expenses?

Funds in the Home Buyer Savings Account can be used for a wide range of expenses directly tied to purchasing a home, ensuring buyers have the financial resources they need. These qualified expenses include:
• Down Payment: The most significant hurdle for many homebuyers.
• Closing Costs: Fees associated with finalizing a home purchase, such as loan origination fees, title insurance, recording fees, and escrow charges.
• Inspection Fees: Costs for home, pest, or structural inspections.
• Mortgage Insurance: Initial premium payments for private mortgage insurance (PMI).
• Prepaid Expenses: Upfront costs like property taxes, homeowner’s insurance premiums, and HOA dues.
• Buyer’s Real Estate Agent Fees: An important inclusion that helps cover the costs of the buyer’s agent, ensuring buyers have professional guidance and support throughout the home buying process.

By covering these expenses, the HBSA eases the financial burden beyond just saving for the down payment. It provides a comprehensive solution to help West Virginians navigate the true cost of purchasing a home.

Why is This Legislation Needed?

West Virginia has long prided itself on a high homeownership rate, but today’s economic challenges—rising home prices, interest rates, and inflation—are making it harder for individuals and families to save. The HBSA addresses this challenge in meaningful ways:
• It Supports First-Time Homebuyers: By offering tax advantages and flexible contributions, the program helps young professionals, families, and new graduates save for homeownership.
• It Allows Loved Ones to Contribute: Family and friends can contribute to the account, providing an extra boost to help buyers achieve their savings goals.
• It Keeps Talent in West Virginia: By making homeownership more accessible, we can encourage West Virginians to put down roots and invest in their communities.
• It Strengthens the Real Estate Market: Increased homeownership benefits local economies, strengthens property values, and builds thriving communities.

How Would It Work?

The structure of the Home Buyer Savings Account is straightforward:
1. Open an Account: Individuals or couples can establish a savings account specifically for purchasing a home.
2. Save and Contribute: Account holders can contribute funds up to an annual limit, with contributions being tax-deductible. Family and friends can also contribute, helping buyers save faster.
3. Tax-Free Growth: Interest earned on the account is exempt from state income taxes.
4. Use Funds for Home Purchase: When ready, account holders can withdraw funds to cover down payments, closing costs, agent fees, and other qualified expenses related to buying a home.

This approach creates a powerful and practical tool to help West Virginians save for homeownership, while also providing a meaningful tax benefit.

How REALTORS® Can Make a Difference

Passing this legislation will require a unified effort from West Virginia REALTORS®. As trusted advisors, community leaders, and advocates, we have an opportunity to share the benefits of the HBSA with our clients, colleagues, and legislators.

Here’s what you can do:
• Educate clients about the proposed HBSA and how it could help them achieve homeownership.
• Engage with local representatives and encourage them to support the bill.
• Share the message that the HBSA isn’t just about tax savings—it’s about empowering families, retaining talent, and strengthening our communities.

Let’s Make 2025 the Year We Cross the Finish Line

The Home Buyer Savings Account has the potential to transform homeownership in West Virginia, making it more accessible and affordable for individuals and families across the state. With strong advocacy and a united voice, we can ensure this legislation becomes a reality.

Together, let’s help more West Virginians unlock the door to their dream home.

Paul Ashmore, Treasurer, West Virginia Association of REALTORS®