Sponsors (2)
Official title: Amend the Internal Revenue Code of 1986 to expand housing investment with mortgage revenue bonds, and for other purposes.
Introduced April 29, 2025 by Catherine Marie Cortez Masto · Last progress April 29, 2025
The bill increases flexibility and predictability for housing finance and certain homeowner tax benefits while streamlining some reporting, but does so at the cost of reduced public notice and participation, added administrative burdens, potential revenue loss, and uneven access across localities.
State and local issuing authorities can transfer/redesignate unused private activity bond carryforward authority and submit required bond data electronically, making it easier and faster to finance affordable housing projects.
Homeowners who meet residence and income tests can refinance without losing favorable mortgage revenue bond tax treatment, and refinancings will use current market value for certain calculations, preserving or improving access to tax‑preferred refinancing.
Changes to Mortgage Credit Certificates (longer effective periods, predictable annual credit rates capped at 1–5%, and a limited ability for issuers to rescind elections) increase predictability and may preserve or extend tax credit benefits for eligible homeowners.
Members of the public, stakeholders, and taxpayers have only 30 days (instead of 90) to review and respond to certain notices, reducing public participation, transparency, and time to prepare responses or legal challenges.
Expanding allowable tax‑preferred borrowing (bond transfers/redesignations, higher home‑improvement loan caps, and longer MCC periods) and increased issuance could reduce federal tax revenues or raise long‑term federal costs.
State and local issuing authorities, issuers, and Treasury/IRS face increased compliance, reporting, and administrative burdens to gather detailed bond breakdowns, implement electronic filing, adjust MCC rules, and track timing/elections.
Based on analysis of 20 sections of legislative text.
Revises mortgage credit certificate rules, raises home-improvement loan cap to $75K (indexed), permits limited intrastate transfer of housing bond carryforwards, shortens notice and holding periods, and tightens bond reporting.
Changes federal rules for mortgage credit certificates (MCCs), qualified private activity bonds, and State volume cap reporting. It shortens certain public notice windows, increases the home improvement loan cap, allows limited intrastate transfers/redesignations of unused housing bond authority, revises MCC credit-rate and term rules, tightens reporting and electronic filing for bond/state cap data, and alters some penalty/reporting language. Many provisions take effect for calendar years or elections after December 31, 2025, while a few take effect on enactment or for loans/certificates issued in specified later periods.