H.R. 7422, the NEST Act, creates a new tax-advantaged savings account to help first-time homebuyers save for down payments and closing costs. Account holders can make tax-deductible contributions up to a state-specific limit based on 20% of their state's median home price, and withdrawals used for qualified home purchase expenses are completely tax-free. The accounts must be used within 60 days of a home purchase or they become subject to taxes, and withdrawals for other purposes face a 20% penalty tax plus regular income taxes. The bill establishes tax rules for these accounts, including excess contribution penalties and reporting requirements for financial institutions, with all provisions taking effect for tax years beginning after December 31, 2025.