White House economic adviser Kevin Hassett teased the Trump administration’s long-awaited plans to improve housing affordability on Friday, saying one measure will include allowing homebuyers to use some of their retirement funds to make a downpayment.
In a Fox Business interview, Hassett said, “We’re going to allow people to take money out of their 401(k)s and use that for downpayment.”
He added that he would be accompanying President Donald Trump to the World Economic Forum’s annual meeting next week in Davos, Switzerland, where he said Trump would “put out the final plan.”
Hassett said the administration is “still talking about the mechanics of it,” but he painted a picture where a homebuyer could take money out of their 401(k) to put toward a downpayment. Then once equity accrued in the home, an amount corresponding to the 401(k) withdrawal could be added as an asset to the retirement account.
“Then your 401(k) will grow over time as the value of your house grows,” Hassett proposed.
This would be a healthy way to save more money for retirement, Hassett said on the “Mornings with Maria” program. “And you’ll have solved the liquidity constraint problem and gotten yourself a house early in life.”
Greg Sher, managing director of NFM Lending, told Scotsman Guide that “with affordability quickly becoming a midterm flashpoint, housing is front and center” to the Trump administration’s agenda.
“This proposal lacks detail, but I support any measure that helps first-time buyers without punitive consequences,” Sher said.
Hassett is one of the final candidates to be Trump’s nominee as the next chair of the Federal Reserve, though his odds of being the pick took a fall Friday when Trump commented that he likely wants to keep him in his current role.
Prediction markets quickly elevated former Fed Governor Kevin Warsh as the most likely choice, followed by Hassett and current Fed Governor Christopher Waller.
But another candidate might still be in the mix as well. Hassett was asked about the other candidates, including Rick Rieder, senior managing director at BlackRock, the world’s largest asset management firm, who recently sat for a second interview with the president.
“Kevin Warsh, Rick Rieder, they’re terrific guys,” he said, adding that Trump “has nothing but good choices. And if it were to be me, I’ve said that I would take the job.”
