Affordable Housing Equity Act of 2025

This bill boosts the Low-Income Housing Tax Credit for rental projects that set aside more homes for people with very low incomes. If at least 20% of a building’s apartments are reserved for households making no more than the greater of 30% of the area’s median income or the federal poverty level—and the state housing agency says the extra boost is needed—the tax credit calculation for those units goes up by 50%. This is meant to help more deeply affordable apartments get built and stay financially sound.

Key points

• Who is affected: Rental housing developers and households with extremely low incomes (at or below 30% of area median income or at/below the federal poverty line).
• What changes: For the qualifying portion of a building, the “eligible basis” used to compute the tax credit rises to 150%, increasing the value of credits and helping projects pencil out.
• When: Applies to projects that receive new credit allocations after the law is enacted. For projects using tax-exempt bonds, it applies to bonds issued after December 31, 2025.