Sponsors (2)
Introduced April 29, 2025 by Catherine Marie Cortez Masto · Last progress April 29, 2025
The bill aims to expand and standardize housing‑related tax preferences and speed some administrative processes—benefiting many homeowners and improving bond issuance flexibility—while increasing administrative burdens, reducing public notice and some transparency, and creating modest fiscal and distributional risks.
Homeowners eligible for mortgage credit certificates (MCCs) will keep MCC benefits for more years and see credit rates standardized (1%–5%) with issuing authorities able to set annual rates, making mortgage assistance more predictable and longer‑lasting for eligible borrowers.
Homeowners who meet the residence and income tests can refinance without losing favorable mortgage revenue bond tax treatment, using current market value at refinancing to access refinancing benefits based on up‑to‑date home value.
States and local issuing authorities gain flexibility to transfer or redesignate unused private activity bond carryforwards within the State (including transfers to authorities issuing qualified mortgage or exempt facility bonds), which can accelerate issuance of housing bonds and help finance more affordable housing projects.
Members of the public, stakeholders, and taxpayers will have less time to learn about, review, and respond to proposed actions because notice periods shorten from 90 to 30 days, reducing opportunities for public participation and oversight.
The bill creates substantial new administrative and compliance burdens and implementation costs for state and local issuing authorities, the Treasury/IRS, and financial institutions (new reporting, electronic filing, indexing rules, updated guidance and elections), which will raise costs for governments and market participants and may be passed to taxpayers or borrowers.
Some borrowers and the public will face reduced transparency because certain lenders may no longer be required to report mortgage credit certificate‑related information and expanded disclosure to congressional committees raises confidentiality concerns for issuers.
Based on analysis of 20 sections of legislative text.
Revises private-activity bond and mortgage credit certificate rules: shortens notice, changes reporting, requires Treasury bond-cap reports, allows limited in-State carryforward transfers, and raises home-improvement loan caps.
Changes to federal tax rules and reporting for private activity bonds and mortgage credit certificates shorten a public notice period, change who must report and how penalties apply, require Treasury to publish state-by-state bond cap and issuance data, allow limited in-State transfers of unused housing bond authority, and revise rules that govern mortgage credit certificates and certain refinancings. The bill also raises the dollar cap for qualifying home improvement loans and shortens certain holding periods used in eligibility tests. The reforms mainly affect issuing authorities (state and local), homeowners who use mortgage credit certificates or get refinancing, lenders and certificate issuers, and the Department of the Treasury (reporting responsibilities). Many changes take effect for calendar years or elections after December 31, 2025, while some are effective on enactment or for later-issued certificates/loans.