Family Homeownership Savings Incentive Act

Family Homeownership Savings Incentive Act - Amends the Internal Revenue Code to permit individuals to establish tax-exempt savings accounts to finance the purchase of a first principal residence. Limits contributions to such account to $25,000 per taxable year reduced by the aggregate of contributions made to such account in preceding taxable years (other than rollover contributions). Allows a tax-free rollover for any amount paid or distributed out of such an individual housing account if the entire amount is paid into another individual housing account within 60 days.

Excludes distributions from such accounts from gross income so long as they are used exclusively for the purpose of purchasing a principal residence. Imposes a tax penalty on amounts distributed from an individual housing account for purposes other than the purchase of a principal residence. Defines "principal residence" to include a building which contains more than one but fewer than five dwelling units if at least one of such dwelling units is occupied by the owner as a principal residence.