The Affordable Housing Tax Credit Coalition (AHTCC) applauds the inclusion of provisions to expand and strengthen the Low-Income Housing Tax Credit (Housing Credit) passed by the Senate today as part of the reconciliation bill. If enacted, these provisions would amount to the largest investment in the Housing Credit in decades, and would finance an estimated 1.22 million more affordable homes over the next decade than otherwise possible, according to Novogradac.
“The Housing Credit provisions in the Senate reconciliation bill would finance well over a million more affordable homes in the U.S. – a profound impact at a time of staggering need,” said AHTCC Chief Executive Officer Emily Cadik. “We applaud this effort to take an unprecedented step toward resolving a crisis that continues to affect millions of Americans.”
“These Housing Credit provisions represent bold action to increase the nation’s housing supply by over one million homes at a time when the affordable housing crisis has reached record levels and has affected every state, district, and community,” said Dudley Benoit, President of the AHTCC Board of Directors and Senior Managing Director of Walker & Dunlop. “The Housing Credit is the most effective tool we have to meet the affordable housing needs in rural, suburban, and urban areas which in turn has proven to generate economic growth, support workforces, and strengthen communities.”
The Senate’s bill includes the following modifications to the Housing Credit:
- Housing Credit allocation increase: The bill would provide a permanent 12 percent Housing Credit allocation increase beginning in 2026.
- Bond threshold test reduction: The 50 percent bond financing threshold test would be lowered to 25 percent permanently beginning in 2026, lowering a barrier to affordable housing production and allowing states to make more efficient use of their bond cap resources.
These proposals were introduced as part of the bipartisan Affordable Housing Credit Improvement Act (AHCIA, S.1515/H.R.2725) of 2025. The bill was introduced in the Senate by Sen. Todd Young (R-IN) and in the House by Rep. Darin LaHood (R-IL). The legislation already has the support of more than one-third of Congress – 155 cosponsors in the House and 42 cosponsors in the Senate, evenly balanced with Republicans and Democrats and representing 46 states across the country. The AHTCC thanks 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 AHCIA cosponsors for their support.
The Housing Credit is the nation’s primary financing tool for the development and preservation of affordable rental housing. Established under President Reagan and last expanded during the first Trump Administration, the Housing Credit is a proven, pro-growth tax policy with a nearly 40-year track record of leveraging private investment to increase the supply of affordable rental housing. The inclusion of Housing Credit provisions in both the House and Senate versions of this landmark reconciliation legislation represents the long-overdue need to bolster the nation’s affordable production.
The bill passed after Vice President JD Vance broke a tied 50-50 vote and will now move to the House of Representatives, where lawmakers aim to pass it before the President’s July 4 deadline.
Comments are closed.