Kentucky lawmakers are pushing for a tax-free home-income-to-property loan that would allow people to save for their retirement.
The Kentucky House of Representatives on Wednesday unanimously passed a bill that would give homeowners the opportunity to make their own home equity loans to offset mortgage payments or interest on a home that is being sold.
House Speaker Jeff Hoover, a Republican, said the program would help middle-class families with retirement savings and could help families get ahead of rising costs of living.
“The money we would save on mortgage payments would be more than offset by interest on the loan,” Hoover said.
House Democrats were not happy with the bill.
House Minority Leader Stacey Abrams, a Democrat, said lawmakers are ignoring the needs of Kentucky’s middle class by allowing wealthy homeowners to benefit from a tax break.
“It is clear that a middle class who has saved for retirement for decades is not able to afford a mortgage,” Abrams said in a statement.
The tax-exempt loan program, called a home equity loan, would allow homeowners to make loans to buy a home, rent it or build a home themselves.
The bill passed the House on a vote of 26-10.
It would go to the Senate, where a House committee is working on a companion measure.
“We are working to make sure this is the right thing for Kentucky,” Hoover told reporters.
Matt Bevin has said he supports the idea, but hasn’t offered specifics on how the state would implement the tax-exemption.
The legislation would also allow people with an income of up to $110,000 a year to apply for a $50,000 loan.