Affordable Housing Bond Enhancement Act

This bill aims to make it easier and cheaper to buy, fix, and keep homes, especially for lower- and middle-income families. It raises the cap on “qualified home improvement” loans from $5,000 to $75,000 and ties it to inflation after 2026, so families can finance bigger repairs like roofs, plumbing, or energy upgrades using mortgage revenue bond programs . It also lets eligible homeowners refinance using these bonds without some old limits, using the home’s current market value at the time of refinancing, which can help people lower their payments or get out of risky loans . The bill shortens how long buyers can face a “recapture” payback if they sell or move too soon—from 9 years to 5 years—reducing surprise costs for families who need to move earlier, with changes starting in tax years after 2025 .

For mortgage credit certificates (MCCs), the credit rate would be set between 1% and 5% and can vary by year of the mortgage, giving households a steadier, more predictable tax break on mortgage interest. The time an MCC can stay in effect is extended from 2 years to 4 years, and public notice before issuing MCCs can be 30 days instead of 90, which can speed things up. Lender reporting rules are also simplified to cut paperwork. These changes roll out on different timelines, with many tied to late 2025 or later-issued certificates . The bill also requires clearer, electronic reporting on how states use their bond authority and allows states to move unused bond capacity for housing to where it’s needed within the state, helping more projects get funded instead of letting authority expire .

Key points

• Who is affected: Homebuyers and homeowners using mortgage revenue bonds or mortgage credit certificates; state and local housing finance agencies .
• What changes:
  • Home improvement loan limit rises to $75,000, with inflation bumps after 2026 .
  • Easier refinancing for eligible borrowers using bond programs, based on current home value .
  • Recapture period shrinks from 9 to 5 years, lowering long-term risk for buyers .
  • MCC credit rate set at 1%–5%, can vary by year; MCC validity extended to 4 years; simpler notices and reporting .
  • Better tracking and sharing of unused bond authority for housing within states; electronic reporting to federal agencies .
• When:
  • Most bond reporting changes start after enactment; some loan and tax changes begin after the year of enactment; several MCC and carryforward updates apply to actions after December 31, 2025, or for certificates issued starting the second calendar year after enactment .