Now that it’s 2019, no longer does the term “Sweet Home Alabama” have to be just a famous Lynyrd Skynyrd song, or a Reese Witherspoon romantic comedy.
That’s because anyone who has always wanted to own a home of their own in Alabama now has a new tool to help them do that for the first time, or even the first time in a long while.
In Alabama, the First-Time Homebuyer and Second-Chance Savings Account (FHSA), is now available for anyone who has never owned a home or for those folks who are re-entering the housing market and haven’t owned a home for at least a decade.
Individuals or couples can open one of these tax-free savings accounts at any local bank, credit union or other financial institution in Alabama. The principal deposits and earnings will be deductible on their state income taxes.
The savings in this account can be used to pay for a down payment and/or closing costs for a single-family dwelling.
ABOUT THE ACCOUNTS
“First-time buyers can now begin the process of buying a home years in advance, simply by starting a savings account, and get a tax break by doing so,” said Morgan Ashurst, 2019 Alabama REALTORS® Public Policy Chair. “We are proud to have played a role in helping provide first-time buyers with this new resource.”
The option to use this account was created in 2018 when the Alabama legislature passed a bill and Gov. Kay Ivey signed it into law. It allows individuals or couples to make deposits and earnings up to $50,000, with a mandate that qualified expenditures must be made within five years from opening the account.
“One of the most commonly asked questions from first-time buyers is, ‘Where do I start?’ This savings account is the new starting point,” said Stacey Sanders, 2019 Alabama REALTORS® President. “We are excited to see the growth this new homebuying tool spurs in Alabama’s housing market.”
A POSITIVE IMPACT
And while this benefit is great for the first-time homebuyer and those who may have had to hit the reset button for a time and are ready to own a home again now, it’s a benefit to all Alabama residents.
Even though other Alabamaians can’t take advantage of the FHSA, they benefit because home ownership helps improve neighborhoods, which in turn attracts businesses, which creates jobs and improves our local economy.
Homeownership provides wealth accumulation for owners, in addition to social and economic benefits.
Overall, 90% of Alabama residents believe homeownership is a good financial decision.
So, there’s a stake in homeownership for everybody in Alabama, where, according to the song, the skies are so blue. And those skies will be bluer and brighter with more homeowners, which is why those that qualify should take advantage of the FHSA now that it is available.
BY Anthony Sanfilippo