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The housing market is particularly challenging for first-time home buyers at the moment. This means that if you want to buy your first home, you will need to use the first qualified home buyer program. One such programme offered in several states is what is called the first-time Homebuyer Savings account. These accounts help people build their savings and pay for the costs associated with buying a home.
Let’s break down what these accounts are, what you need and how you can use them.
What is your first home buyer savings account?
First-time Home Buyer Savings Account (FHSA) is a tax savings account offered by a specific state that is designed to help home buyers save money on down payments and closing costs. Money saved in your account is taxed on a certain amount. Many of these accounts offer a favorable interest rate, which results in greater profits than many other savings accounts.
Each program has its own standards and outlines how much you can save if you need to use it or if you need to use penalties for early withdrawal.
Who qualifies for a first-time home buyer savings account?
Eligibility for a first-time home buyer savings account varies by state, but in general, the program requires buyers to:
- Have you ever owned a home or have not owned a home in a certain year
- Living in the state and buying their home in the state
- Use funds for eligible expenses, such as down payments, real estate agents’ fees, and closing costs.
Do you need your first HomeBuyer Savings account?
Using your first HomeBuyer Savings account can be a smart move. It’s not necessary, but if you’re qualified and not using it, you essentially leave free money on the table.
“First-time home buyer savings accounts are a powerful tool that will help new buyers overcome one of the biggest hurdles to homeownership: down payments. “By allowing tax savings, these accounts make it easier for buyers to build a strong financial foundation and enter the market with confidence.”
In this tough housing market, the benefits you can buy a home are good. For example, let’s say you’re buying a house in Toledo, Ohio. According to Redfin, Toledo’s housing market was extremely competitive in May 2025, with a median selling price of $129,900. Ohio’s HomeBuyer Plus Savings account program saves up to $100,000 at the time of writing, with a savings interest rate of 3.08%. These small bumps help saves compound over time. This is more than a traditional low yield savings account.
“FHSA is more than just a savings vehicle, it’s a catalyst for financial empowerment. For buyers, having a dedicated tax account is the difference between waiting and winning, when you navigate rising costs and market uncertainty,” says Larry.
However, these accounts are not available anywhere, so it’s important to first and foremost to spew whether they’re an option for you.
learn more: First Home Buyer Guide
Which states offer your first HomeBuyer Savings account?
There are several states that offer first-time home buyers savings accounts. These include:
- Alabama
- Colorado
- Connecticut
- Idaho
- Iowa
- Kansas
- Maryland
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Ohio
- Oklahora
- Oregon
- Virginia
Several other states have introduced bills to establish these accounts. These states have pending bills.
- Illinois
- Massachusetts
- Pennsylvania
Where can I open my first HomeBuyer Savings account?
In most cases, to open one of these accounts, you simply have to visit the participating bank or credit union branch in the state that provides the account. You must fill out the documents and provide your ID. You may also need to create a minimum deposit depending on your state.
Call your local bank or credit union to learn what they offer and the specific process for opening an account.
