President Donald Trump is expected to announce a major housing policy shift next week at the World Economic Forum in Davos, allowing Americans to use money from their 401(k) retirement accounts for home down payments. The proposal was revealed by White House economic adviser Kevin Hassett during an interview on Fox Business, signaling a significant effort to expand access to home ownership amid ongoing affordability challenges.

According to Hassett, the administration plans to permit penalty-free withdrawals from 401(k) accounts when the funds are used specifically for a home down payment. Under current law, Americans who withdraw money from a 401(k) before the age of 59½ typically face a 10 percent early-withdrawal penalty in addition to income taxes. This restriction has long limited the usefulness of 401(k) savings for first-time buyers, even as housing prices have surged.

By contrast, individual retirement accounts already allow first-time homebuyers to withdraw up to $10,000 without penalty, though that amount is often insufficient in today’s housing market. The Trump administration’s proposal would extend similar flexibility to 401(k) plans, which generally hold far larger balances, giving families access to meaningful capital for down payments.

Hassett emphasized that President Trump will personally outline the final structure of the plan in Davos, framing it as part of a broader strategy to reduce barriers to home ownership without expanding federal housing bureaucracies. Supporters argue the move empowers individuals to use their own savings rather than rely on government subsidies or debt-heavy financing models.

The announcement comes as housing affordability remains a top concern for middle-class Americans, particularly younger families struggling to save while facing high rents and interest rates. By unlocking retirement savings for a primary residence, the administration is positioning home ownership as both an economic stabilizer and a cornerstone of long-term financial security.

More details are expected next week, but the proposal already marks one of the most significant retirement-policy discussions of the Trump administration’s current term.