DES MOINES, Iowa -- There's a new law that could save you money when buying a home for the first time, but many banks are just learning about it.
The Vice President of the Iowa Association of Realtors, Scott Wendl, said this law is so new, it could be a matter of weeks or months before banks implement this new savings account.
He said this is because legislators still have to finalize paperwork surrounding the law causing banks to be hesitant.
“There’s one [bank] in Des Moines that I know of, Iowa Savings Bank has kind of taken charge with it. I know more banks have reached out to them to find out how their structuring it. So it’s kind of a learning process on how to implement the whole program.”
Iowa Association of Realtors helped pass a law that helps first time home buyers build up a savings account to be used in the down payment of a house.
Anyone, a parent, family member or friend, can contribute to the account. Those people can deduct the contribution on their state income taxes.
An account like this is a brand new idea to Iowa, it was signed into law on January first.
“It’s so new that not a lot of people know it exists,” said Wendl.
And the process to set up one of these accounts is easy.
“Literally, I stopped in the bank, I had an appointment with a banker that is familiar with a first time home buyer savings account. Ironically my oldest daughter was with me, I was able to go in and open an account for each one of my kids, I would say it took me about 15 to 20 minutes.”
Wendl recommends setting up an account as early as you can so you can maximize around 10 years of contributing and take advantage of the tax deductions.
He also said, once implemented, these accounts will help boost Iowa’s economy by keeping people in the state since the money earned in these accounts can only be used in Iowa.
For more information on this new law and some FAQs visit http://iowafirsthome.com/