Individuals are currently allowed to own real property as an asset in a self-directed retirement account, but are prohibited from occupying that property as their principal residence. If this restriction were removed, it could allow people to purchase homes or pay off existing mortgages on their principal home with funds in their retirement account. No new liens could be placed against the property and if it were ever sold, the funds would have to be returned to the account or pay taxes and penalties as if it were a distribution from the account. All this would involve is to simply remove the restriction against occupying the property in the existing laws. This would free up a tremendous amount of funds to be invested in buying up excess inventory, thus stimulating the housing market.
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