Sponsors (21)
The bill makes it easier for disabled veterans to qualify for LIHTC- and bond-assisted affordable housing—improving access and project occupancy—while creating modest federal revenue impacts and a small administrative burden for housing agencies.
Veterans who receive VA disability compensation or pensions will have that income excluded when determining eligibility for LIHTC- and tax-exempt bond-assisted housing, increasing their access to affordable rental units and reducing housing cost burdens for disabled veterans.
Households that include disabled veterans will more often qualify under residential rental project bond rules, helping affordable housing project sponsors fill units and improving occupancy and financial viability of LIHTC- and bond-assisted developments.
Excluding VA disability compensation and pensions from tenant income calculations could lower reported tenant incomes for LIHTC and bond income tests, which may modestly reduce federal tax revenues or change credit allocations for some housing projects.
State and local housing agencies and bond issuers will need to update income verification procedures and guidance, creating administrative costs and a short-term implementation burden.
Based on analysis of 2 sections of legislative text.
VA disability compensation and VA pension payments are excluded from income for certain LIHTC and tax-exempt bond residential rental project income tests.
Official title: To amend the Internal Revenue Code of 1986 to disregard veteran disability compensation or pension payments in determining income for purposes of the low income housing tax credit and qualified residential rental project bonds.
Introduced September 19, 2025 by Linda T. Sánchez · Last progress September 19, 2025
Changes to federal tax law will prevent VA disability compensation and VA pension payments from being counted as income when determining eligibility or income for certain low-income housing tax credit and tax-exempt bond tests for residential rental projects. The rule applies to income determinations made after the law is enacted, making it easier for disabled veterans receiving VA benefits to qualify for housing supported by these federal tax incentives.