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Increases the federal housing tax credit available to certain rental projects that set aside at least 20% of units for extremely low-income households when a state housing credit agency determines the extra credit is needed to make the project financially viable. The change targets projects that need deeper subsidy to be built and directs state agencies to certify that the additional credit is necessary. The provision applies to buildings receiving credit allocations or obligations issued after the effective date specified in the law.
Adds a new subparagraph (C) to section 42(d)(5) of the Internal Revenue Code titled “Increase in credit for projects designated to serve extremely low-income households.” This creates a rule allowing an increased housing credit for qualifying buildings.
At least 20 percent or more of the residential units in the building must be designated by the taxpayer for occupancy by households whose aggregate household income does not exceed the greater of (I) 30 percent of area median gross income (AMGI) or (II) 100 percent of the Federal poverty line (as defined in section 36B(d)(3)). Units are counted as if the imputed income limitation applicable to such units were 30 percent of AMGI.
The building must be designated by the housing credit agency as requiring the increase in credit under this subparagraph in order for the building to be financially feasible as part of a qualified low-income housing project.
The phrase “Federal poverty line” is referenced and is to be understood within the meaning of section 36B(d)(3).
The amendment applies to buildings that receive allocations of housing credit dollar amount after the date of enactment of this Act.
Make Housing Affordable and Defend Democracy Act
Updated 3 days ago
Last progress December 3, 2025 (2 months ago)
American Affordability Act of 2025
Updated 7 hours ago
Last progress December 18, 2025 (1 month ago)
Primary beneficiaries are developers of affordable rental housing and extremely low-income renters. By allowing larger tax credits when state agencies determine projects need extra subsidy, the change can make more deep-subsidy projects financially feasible and speed or expand construction/preservation of units targeted to households with the lowest incomes. State housing credit agencies will see increased administrative work to review and certify feasibility claims and to document set-aside compliance. Investors and syndicators of LIHTC equity may adjust underwriting and pricing to reflect the larger credit, which can lower the funding gap for qualifying developments. On the federal side, the change reduces tax revenue (a tax expenditure) compared with current law; the provision does not appropriate new grant funds or change direct spending programs. Effects on local housing markets depend on scale: if widely used, the rule could materially increase housing affordable to extremely low-income households; if used rarely, effects will be limited. Risks include potential inconsistency across states in how feasibility is judged and the need for clear program guidance to avoid misuse or overstating need.
Referred to the House Committee on Ways and Means.
Last progress June 12, 2025 (8 months ago)
Introduced on June 12, 2025 by Jimmy Gomez
Updated 7 hours ago
Last progress April 8, 2025 (10 months ago)
Updated 8 hours ago
Last progress April 29, 2025 (9 months ago)