Trump to Unveil Plan Allowing Homebuyers to Use 401(k) Funds for Down Payments

The president will announce the final plan in Davos next week, White House economic adviser Kevin Hassett said.

A for-sale sign is posted in front of a home in Las Vegas on Aug. 8, 2025. Justin Sullivan/Getty Images

WASHINGTON—President Donald Trump will unveil a plan next week that would allow Americans to withdraw funds from their 401(k) accounts to use for a down payment on a home.

White House National Economic Council Director Kevin Hassett announced the plan during an interview with Fox Business on Jan. 16, noting that the details of the proposal are still being finalized.

He said Trump will announce the final plan at the World Economic Forum in Davos, Switzerland, from Jan. 19 to Jan. 23.

“The Fed lifted interest rates so much that mortgage rates went through the roof,” Hassett said.

He pointed out that the average monthly payment for a typical family buying a home has nearly doubled and that during the Biden administration, the down payment required rose to about $32,000 from about $15,000.

Hassett stated that significant progress is needed to address the housing affordability problem, noting that the latest plan is one of many policies introduced by the president to help achieve this goal.

“We’re still talking about the mechanics of it,” he said.

Hassett explained that homeowners could put 10 percent of a home’s equity into a 401(k) plan. As the home’s value goes up, he said, the 401(k) will grow, too. This approach, he said, could provide more funds for retirement, solve liquidity constraints, and make it easier to buy a house earlier in life.

In recent weeks, the Trump administration has introduced a range of proposals to help more Americans achieve homeownership, including bringing down mortgage rates and banning large institutional investors from buying additional residential homes.

In a Jan. 8 Truth Social post, Trump directed the purchase of $200 billion in mortgage bonds to help reduce interest rates.

“This will drive Mortgage Rates down, monthly payments down, and make the cost of owning a home more affordable,” Trump wrote.

On Jan. 7, Trump also announced that he is taking steps to bar large investors from purchasing more single-family homes, and said he would urge Congress to codify it.

Institutional investors are defined as companies owning 1,000 or more properties. Blackstone is considered the largest private equity owner of U.S. apartments, with more than 230,000 units as of April 2025, according to data from the Private Equity Stakeholder Project.

Affordability of homeownership has become a growing concern, especially for first-time buyers.

Since the start of the COVID-19 pandemic, housing costs have rocketed; median home prices have risen by 55 percent, and rents have surged by more than 35 percent nationwide.

Borrowing costs also shot up in 2022 after the Federal Reserve raised interest rates to combat inflation.

The American Dream is out of reach, especially for many young people. The typical age of first-time buyers climbed to 40 in 2025, the highest age on record and up from 31 in 2014, according to a report by The Center for American Progress.

Andrew Moran and Jack Phillips contributed to this report.