Sponsors (2)
The bill directs more LIHTC support to create and preserve deeply affordable rental units for extremely low-income households—likely expanding access and local supply—but increases federal tax expenditures and adds administrative and market constraints that may delay projects or disadvantage small/rural markets.
Extremely low-income households (≤30% AMGI or ≤100% FPL) will have greater access to deeply affordable rental units because federal LIHTC support is increased for projects that reserve units for them.
Communities in high-need areas could see an expanded supply of deeply affordable rental housing, reducing housing instability and pressure on local services.
Affordable housing developers and owners (and state housing agencies) gain improved project feasibility because projects can receive larger tax credits when state agencies certify demonstrated need, encouraging construction or preservation of deeply affordable units.
Taxpayers and the federal budget will face higher LIHTC-related tax expenditures, increasing budgetary cost and potentially crowding out other spending priorities.
Developers, bond issuers, and state/local agencies face added qualification complexity and timing constraints (agency designation requirement and allocation/bond date rules) that can delay financing, raise transaction costs, and risk project schedules.
Small or rural markets may be disadvantaged because concentrated targeting (e.g., requiring a high share of very low-income units) could reduce the number of projects that can be supported in areas with limited budgets or few eligible projects.
Based on analysis of 2 sections of legislative text.
Increases the LIHTC for buildings that reserve ≥20% of units for households at ≤30% AMGI (or 100% FPL) when the housing credit agency deems it needed for financial feasibility.
Introduced June 12, 2025 by Jimmy Gomez · Last progress June 12, 2025
Increases the federal low-income housing tax credit (LIHTC) for buildings that reserve at least 20% of units for very-low-income households by treating those units as if the income limit were 30% of area median gross income (AMGI) or the greater of 30% AMGI and 100% of the Federal poverty line. The higher credit is available only when the state or local housing credit agency designates that the increased credit is needed to make the project financially feasible. The change applies to LIHTC allocations made after enactment and to certain tax-exempt bond–related obligations issued after December 31, 2025.