What Is a First Home Savings Account (FHSA)?

A First Home Savings Account (FHSA) is a type of account designed to help first-time buyers save money for a home with unique tax and financial advantages. In the US, FHSA programs are not federal, but several states offer versions of these accounts — allowing buyers to set aside funds for down payments and closing costs with tax benefits at the state level.

Even if your state doesn’t offer one, you can still create your own dedicated home savings account through Foyer. Think of it as a high-yield account with structure: you set goals, automate contributions, and track progress toward your first home.

Key features of state-level FHSAs:

• State income tax deductions in participating states
• Tax-free growth on savings in some cases
• Tax-free withdrawals when funds are used for qualified home costs
• Contribution and lifetime limits that vary by state
• Some accounts allow joint contributions for married couples

Where no FHSA exists, Foyer provides the tools to mimic the same benefits: goal-based saving, match opportunities, and integrations with programs from your state housing authority. Want to know how to structure your savings? Explore our guide on How to Save for a Home in 2025.

Who can open an FHSA in the US?

Eligibility varies by state, but in general you must:

• Be a resident of the state offering the FHSA
• Be at least 18 years old
• Be a first-time homebuyer (typically defined as not owning a home in the past 3 years)

That makes it especially valuable for young professionals, recent graduates, and families saving for their first home. Read Am I Ready to Buy My First Home? A Complete Guide to better understand your position.

How much can you contribute to an FHSA?

Contribution limits depend on the state. For example, Colorado allows up to $50,000 in lifetime contributions and deductions on your state taxes. Other states set different caps.

Don’t live in an FHSA state? With Foyer, you can still create a dedicated savings account and track toward your down payment goal with no contribution penalties.

What can you hold in an FHSA?

Depending on the state and financial institution, FHSA funds can be placed in:

• High-yield savings accounts
• CDs (Certificates of Deposit)
• Mutual funds, ETFs, or investment accounts (in some states)

With Foyer, buyers can take a simplified approach — building a home-specific savings plan, setting milestones, and staying motivated to hit their target faster.

Are FHSA contributions tax deductible in the US?

At the federal level, no. The US does not currently offer a nationwide FHSA tax deduction. But some states do offer tax benefits when you contribute to their FHSA programs. For example, in Colorado contributions are deductible on your state tax return.

Even if your state doesn’t offer tax benefits, Foyer helps by giving you structure, automation, and match opportunities — which often creates the same momentum toward saving.

How does an FHSA compare to other US savings options?

While there’s no universal US FHSA, many buyers weigh whether to save for a home using:

• State FHSA accounts (where available)
• 401(k) withdrawals or loans
• Roth IRAs (penalty-free withdrawals of contributions, but not earnings)
• Standard savings accounts

Foyer gives you a clearer, more focused alternative: keep your down payment savings separate, track progress, and combine with federal programs like FHA, VA, or USDA loans.

Your next step toward homeownership

If you’re saving for your first home in the US, using a structured system like an FHSA — or a Foyer savings account where one doesn’t exist — can help you stay on track. You’ll get the confidence of clear goals, tax benefits where available, and the ability to combine your savings with down payment assistance programs in your state. Check out our guide on USDA Loans for First-Time Homebuyers if you’re also exploring financing options.

Ready to get started?
Foyer helps you open a dedicated home savings account, map out your plan, and connect with local housing partners so you can go from saving to owning with confidence.