Sponsors (2)
Official title: To amend the Internal Revenue Code of 1986 to increase the low-income housing tax credit for projects designated to serve extremely low-income households.
Introduced June 12, 2025 by Jimmy Gomez · Last progress June 12, 2025
The bill shifts more LIHTC resources to create and preserve deeply affordable rental units for extremely low-income households—improving housing stability and developer feasibility—while increasing federal tax expenditures and adding administrative and timing complexities that could slow projects or reduce production in some smaller markets.
Extremely low-income renters (≤30% AMGI or ≤100% FPL) gain greater access to deeply affordable rental units because the bill increases LIHTC support for projects that reserve units for them, making those developments more financially viable and reducing housing instability.
Affordable housing developers and owners receive stronger financial incentives—larger tax credits when state housing agencies certify heightened need—improving project feasibility and encouraging construction or preservation of deeply affordable rental housing.
Communities in high-need areas could see an increased supply of deeply affordable rental housing, which can ease local housing shortages and stabilize low-income neighborhoods.
Taxpayers and the federal budget face higher costs because expanding LIHTC support increases federal tax expenditures, which may crowd out other spending priorities or require offsetting fiscal adjustments.
Developers, bond issuers, and state agencies face added qualification complexity and timing constraints (agency designation and effective-dates tied to allocation and bond issue dates), which can delay financing, increase transaction costs, and complicate project delivery.
Small or rural markets risk fewer supported projects because concentrating credits on deeper targeting (e.g., requiring ≥20% of units at very low incomes) may make it harder for areas with limited budgets or few eligible projects to use available credits effectively.
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 poverty line) if the housing credit agency designates the project as needing the increase.
Creates a targeted boost to the federal Low-Income Housing Tax Credit (LIHTC) for certain buildings that set aside units for extremely low-income households. Buildings that reserve at least 20% of units for households with incomes at or below the greater of 30% of area median gross income (AMGI) or 100% of the federal poverty line may receive an increased credit if the state housing credit agency determines the boost is needed to make the project financially feasible. The change applies to housing credit allocations made after the law is enacted and to certain bond-financed buildings whose obligation issue date is after December 31, 2025. The policy aims to encourage more housing affordable to the lowest-income renters by raising the LIHTC available to qualifying projects.