January 22, 2026

This week, President Donald J. Trump announced what he described as a “ban” on large institutional investors buying single-family homes as part of broader housing affordability plans, directed up to $200 billion in mortgage-backed securities (“MBS”) purchases by government-sponsored enterprises to help lower mortgage rates, and called on Congress to cap credit card interest rates at 10% for one (1)  year to ease barriers to saving for a home.  The President’s remarks also included a statement that he will ask Congress to codify the institutional investor “ban” into permanent law. The announcement, however, notably did not include expected details on allowing penalty-free 401(k) withdrawals for down payments or similar down-payment support proposals.

A separate report from HousingWire states that the Trump administration’s potential proposal to let prospective homebuyers access funds from their 401(k) retirement accounts without penalties could help to cover down payments but also raises concerns among experts about long-term retirement security. Some consumer advocates note that, especially for young Americans, penalty-free 401(k) withdrawals could undermine retirement preparedness; tapping retirement savings may reduce future nest eggs and financial stability. The article cites a survey by NerdWallet whereby 22% of Americans planning to buy a home in the next twelve (12) months expect to tap their own, or partner’s, retirement savings for a down payment. Some industry experts add that any changes to 401(k) withdrawal rules may constitute a change that warrants congressional approval.

We will continue to monitor this situation as it develops.

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If you have questions about this publication, please contact Adam Friedman, Ralph Vartolo or Michael DeRosa,
Friedman Vartolo LLP, 1325 Franklin Avenue, Suite 160, Garden City, NY 11530, Phone: (212) 471-5100 | Fax: (212) 471-5150.