- Accounts may be opened by first-time homebuyers and those re-entering the housing market, if they have not owned a home within ten years.
- Savings from the account can be used to pay for a down payment and/or closing costs for the purchase of a single-family dwelling.
- The principal deposits and earnings from the account are deductible.
- Limits on deductions for principal contributions - $5000/filing individually, $10,000/filing jointly.
- Total deductions from deposits and earnings cannot exceed $50,000.
- Qualified expenditures must be made in five years from opening the account.
- The account can be opened at any institution authorized to do business in Alabama, and only marketable securities or cash may be contributed.
- Penalties apply if funds withdrawn or used for any non-qualified purpose.
