Expand IRA to increase homeownership

There is a simple and prudent way to (1) increase homeownership and (2) insure that ownership is based on genuine equity, and not risky 100 percent loans.

Allow first-time homebuyers to use their individual retirement accounts, without penalties or taxes, as a down payment on their first home. Currently, Congress allows only $10,000 from an IRA, but it becomes taxable income in the year used.

We all admit that the staggering debt loads of the government and families constitute a crisis. We also know that millions of Americans are at or near upside down on their homes, especially those who bought with "zero down."

Is there any wonder? We're backward: Our country rewards debt (home mortgage deduction) and penalizes savings (taxes on interest and capital gains).

My simple idea: Let a first-time homebuyer use any or all of their retirement savings (without penalty or tax) to buy that first home.

They haven't lost their retirement: It has become equity in their first home.

The result is that you start creating a nation of savers at a younger age who have a greater reason to save. It builds self-reliance. And it's much better than the government taking from the taxpayers to provide tax credits to these first-time buyers.

-- Rev. Jon R. Mutchler, Ferndale