Congress has approved a reconciliation package containing the largest investment in the Housing Credit in decades, which is now headed to the President’s desk to be signed into law. The Housing Credit provisions are expected to finance 1.22 million additional affordable homes over the next decade, according to Novogradac.
The following provisions are poised for enactment:
- Housing Credit allocation increase: The bill will provide a permanent 12 percent Housing Credit allocation increase beginning in 2026.
- Bond threshold test reduction: The 50 percent bond financing threshold test for the four percent Housing Credit will be lowered to 25 percent permanently. This will be effective for properties placed in service starting after December 31, 2025, provided that there are bonds of at least 5 percent of the basis in land and building with an “issue date” after December 31, 2025.
See the full bill text here.
In addition to accelerating affordable housing production, the Housing Credit provisions in the reconciliation bill demonstrate the pro-growth impact of the Housing Credit through their potential economic benefits:
- Supporting 1.83 million jobs,
- Generating $206.6 billion in wages and business income, and
- Generating $71.4 billion in tax revenue over the next decade.
The AHTCC applauds Congress for taking action to address the nation’s affordable housing crisis by passing these sorely needed Housing Credit provisions as part of reconciliation. As the legislation awaits final enactment by the President, we would like to thank Sen. Young and Rep. LaHood for their leadership on this legislation, Chairmen Crapo (R-ID) and Smith (R-MO) for their support for the inclusion of Housing Credit provisions in the reconciliation legislation, and all members of Congress who champion the Housing Credit, their staff, and the AHTCC’s members and partners for your continued advocacy.
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