Financial Plus Credit Union

First-Time Homebuyers Savings Account

11/27/2018

First-Time Homebuyers Savings Account

FPCU is pleased to offer the First-Time Homebuyer Savings Account (FTHSA) to all our Iowa members.

FTHSA is a savings account created by the Iowa legislature to help Iowans save for their first home. It includes provisions that allow individuals, including those who already own a home, to make tax-deductible contributions into an account to be used by a designated person saving to own a first home. The account can be used for a down payment and closing costs for a principal residence in Iowa. The account may be established by an Iowa resident as long as each established account has a specified designated beneficiary.

A designated beneficiary is the person who will utilize the funds within the account to purchase a home. The person who establishes the account and the Designated Beneficiary do not need to be the same person. A designated beneficiary must qualify as a first-time homebuyer at the time the account is established and at the time the funds within the account are used for a home purchase.

There are many advantage for obtaining an First-Time Homebuyer Savings Account including:

• Income from interest earned on an FTHSA is not taxable on state of Iowa tax returns.
• The account is interest bearing.
• There are no maximum contribution limits (only deductible limits)
• The state of Iowa tax deduction for account contributions is available for up to ten years.
• Allowable deduction limits for contributions adjust annually for inflation.

Tracking and Reporting:

All reporting is the responsibility of the account holder. All documents needed to maintain and update the account will be provided by the State of Iowa-Revenue Department. This includes all of the following:

• Beneficiary Designation
• Beneficiary Changes
• Verification of withdrawals/destination of withdrawn funds
• Ensuring the account satisfies all of the requirements set out by the state
• Reporting of any tax penalties related to the use of the account
• Forms will be available at the Iowa Department of Revenue website.

For additional information on FTHSA, please visit the legislative First-Time Homebuyer Savings Account Summary or contact our Mortgage Lending Team.