Sponsors (6)
The bill trades a substantial federal tax expenditure and added administrative complexity for a targeted incentive that can convert commercially owned manufactured-home communities into resident- or nonprofit-controlled, long-term affordable communities — protecting current residents but risking revenue loss, implementation hurdles, and potential capture of benefits by non-resident parties.
Low-income manufactured-home residents and prospective resident-owned nonprofits gain stronger ability to keep communities affordable because sellers are incentivized to sell to resident-controlled entities rather than commercial owners.
Current residents are more protected from sharp site-fee increases and displacement because conversions encourage long-term (50-year) covenants and resident- or nonprofit-ownership that lock in affordable home-site availability.
Sellers of qualifying manufactured-home community land can receive a large tax credit (up to 75% of qualified gain) when selling to resident-controlled nonprofits/co-ops, materially reducing sellers' federal tax liability and making sales to residents more financially feasible.
The tax credit/benefit reduces federal revenue and could increase the deficit or require offsets, which may affect taxpayers broadly or crowd out other federal spending.
Buyers face a substantial 20% recapture tax on net proceeds if the long-term use covenant is broken, creating financial risk that could deter buyers, complicate transactions, or constrain refinancing and future investment.
Complex eligibility rules, affidavit/recording/reporting requirements, and other compliance burdens raise transaction costs for sellers and buyers and increase administrative work for tax/state authorities, limiting uptake and slowing conversions.
Based on analysis of 3 sections of legislative text.
Creates a federal tax credit (IRC §45BB) equal to 75% of a seller’s qualified gain when selling manufactured home communities to qualified resident cooperatives or nonprofits subject to long-term preservation covenants.
Official title: To amend the Internal Revenue Code of 1986 to allow a business credit for gain from the sale of real property for use as a manufactured home community, and for other purposes.
Introduced May 21, 2026 by Ilhan Omar · Last progress May 21, 2026
Creates a federal business tax credit to encourage sellers to transfer manufactured home communities (mobile home parks) to resident-owned cooperatives or nonprofit owners that commit to preserving the site as a manufactured home community for at least 50 years. The credit equals 75% of the seller’s “qualified gain” from the sale when the seller owned the property for the prior two years and the buyer meets cooperative/nonprofit membership and governance rules; the bill also imposes a recapture tax on buyers if the long-term covenant is broken. The provision adds new Internal Revenue Code section 45BB, requires affidavits and recordation, directs Treasury to issue regulations, treats the credit as part of the general business credit, and applies to taxable years beginning after December 31, 2026.