In a House Ways and Means Committee hearing today on President Trump’s proposed fiscal year (FY) 2021 budget, Treasury Secretary Steven Mnuchin expressed interest in working with Congress to strengthen the Low-Income Housing Tax Credit (Housing Credit) by enacting a minimum 4 percent rate. Currently, the so-called “4 percent” Housing Credit rate is tied to federal borrowing rates, which are historically low. As a result, the rate has actually fallen below 3.2 percent, making many Housing Credit properties financially infeasible. Setting a minimum 4 percent Housing Credit rate would provide parity with the 9 percent Housing Credit and would enable the development or preservation of at least 66,000 more affordable homes over the next decade. The Affordable Housing Credit Improvement Act of 2019 (AHCIA) would solve this problem and further expand and strengthen the Housing Credit, and is currently co-sponsored by nearly half of the U.S. House of Representatives (H.R. 3077).
During the hearing, one of the lead sponsors of the AHCIA Rep. Jackie Walorski (R-IN-2) and co-sponsor Rep. Dwight Evans (D-PA-3) focused specifically on the 4 percent Housing Credit rate. In both exchanges, Secretary Mnuchin stated that he is aware of the bipartisan and bicameral support for this solution and that he would work with both members of Congress on this issue. Last month, Secretary Mnuchin made similar comments in an exchange with AHCIA lead sponsor in the Senate, Sen. Maria Cantwell (D-WA), during the Senate Finance Committee hearing on the President’s proposed budget. See Sen. Cantwell’s press release about the hearing here.
During questioning from AHCIA co-sponsors Reps. Evans and Jimmy Panetta (D-CA-20), Secretary Mnuchin also noted the Administration’s focus on affordable housing, stating that housing finance reform is an important component and that the Housing Credit is an important tool. We commend the affordable housing champions in Congress and Secretary Mnuchin for recognizing the importance of the Housing Credit during these hearings, and look forward to working with Congress and the Administration to strengthen the Housing Credit.