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Trump’s 401(k) Home Buying Plan: What California Homeowners Need to Know

Trump's 401(k) Home Buying Plan: What California Homeowners Need to Know

# Trump’s 401(k) Home Buying Plan: What California Homeowners Need to Know

## Understanding the Proposed Retirement Fund Access for Home Down Payments

If you’re a California resident struggling with home affordability and wondering “Can I use my retirement savings to buy a house?” or “How can I afford a down payment in California’s expensive housing market?” — you’re not alone. A new federal proposal may soon change the landscape of home buying options, but it comes with important legal and financial considerations.

President Donald Trump is set to unveil a plan allowing Americans to tap into their 401(k) retirement accounts to fund home down payments. National Economic Council Director Kevin Hassett outlined the concept, suggesting that homebuyers could put 10% down on a home and then convert 10% of the home’s equity into an asset within their 401(k) account. The final details will be presented at the Davos World Economic Forum.

## Who Is This Plan For?

This proposal primarily benefits:

  • Current 401(k) account holders — Only about 55% of Americans have retirement accounts, with an even smaller subset holding 401(k)s
  • Middle to upper-income earners — Low-income workers are least likely to have access to these retirement plans
  • First-time homebuyers with existing retirement savings who are looking for creative financing solutions

    • ## Critical Questions California Residents Should Ask

    What are the tax implications of withdrawing from my 401(k) for a home purchase?

    Currently, employees who withdraw money from retirement accounts typically face fees and taxes. The White House has not yet clarified the tax implications of the new proposal, making it essential to consult with estate planning and tax professionals before making any decisions.

    Will this plan actually make housing more affordable?

    Experts are skeptical. Daryl Fairweather, chief economist at Redfin, noted that using retirement funds for down payments won’t solve the housing affordability crisis, though it may help some people meet current financial needs. Jason Richardson of the National Community Reinvestment Coalition warned that the plan doesn’t address core affordability and supply problems.

    Richardson emphasized a critical concern: “This isn’t a targeted assistance program for people who need help with down payments — it’s giving people who already have substantial retirement savings more purchasing power, which will likely just drive home prices up further”.

    What risks come with draining my 401(k) to buy a home?

    Financial experts caution that homes can lose value, potentially putting buyers in a worse financial position if they’ve depleted their retirement savings. This is particularly important for California residents managing high-value assets in volatile real estate markets.

    ## Other Housing Affordability Measures to Consider

    The Trump administration has announced additional housing initiatives:

  • Corporate investor ban — A proposal to ban large corporate investors from purchasing single-family homes, though analysts question how significantly this would affect prices
  • Mortgage bond purchases — Fannie Mae and Freddie Mac have been directed to buy $200 billion worth of mortgage bonds, which contributed to the average 30-year mortgage rate falling below 6% for the first time in nearly three years

    • However, housing economists have cautioned that bond purchases may not substantially lower mortgage rates in the long term.

    ## How California Probate and Trust Can Help

    Making decisions about using retirement funds for major purchases like home buying requires careful legal and financial planning. At California Probate and Trust, PC, we help California residents navigate complex asset management decisions that affect both their current financial health and long-term estate plans.

    Our experienced attorneys can help you:

  • Understand the legal implications of accessing retirement funds for home purchases
  • Develop comprehensive estate plans that protect your assets and family
  • Structure trusts and financial management plans that align with your home ownership goals
  • Ensure your property transfers and asset protection strategies comply with California law

    • We offer free consultations to California residents who want transparent, compassionate guidance on protecting their wealth and planning for the future.

    ## Take Action: Schedule Your Free Consultation

    Don’t make major financial decisions about retirement funds and home buying without expert legal guidance. Contact California Probate and Trust, PC today for a free, no-obligation consultation. Our Sacramento-based team has helped thousands of California families navigate complex financial and estate planning challenges.

    Call (866)-674-1130 or visit cpt.law to schedule your appointment.

    ## Legal Disclaimer

    This article is provided for informational purposes only and does not constitute legal, financial, or tax advice. The information presented is based on publicly available news sources, specifically BBC News, and current as of January 2026. Laws, regulations, and proposed policies are subject to change. Individual circumstances vary, and readers should consult with qualified legal, financial, and tax professionals before making any decisions regarding retirement accounts, home purchases, or estate planning. California Probate and Trust, PC does not guarantee any specific outcomes and is not responsible for any actions taken based on the information in this article. No attorney-client relationship is created by reading this article or visiting our website.

    Source: BBC News – Donald Trump to unveil home buying plan involving retirement funds