Sponsors (10)
Official title: Amend the Internal Revenue Code of 1986 to establish a tax credit for neighborhood revitalization, and for other purposes.
Introduced May 8, 2025 by Todd Young · Last progress May 8, 2025
The bill increases federal support for producing and rehabilitating affordable homes—boosting supply and helping low‑income homeowners—while creating new federal costs, administrative complexity, and risks of uneven allocation and resale recapture that could blunt or complicate its benefits.
Low-income and distressed communities would receive targeted investment to build and rehabilitate homes, increasing local housing supply and affordability.
Homeowners in distressed areas (including low-income owner-occupants) could access funds and tax credits for repairs and owner-occupied rehabilitations, reducing housing dilapidation and helping stabilize neighborhoods.
Small developers and builders would face lower financial risk and fewer up-front barriers because refundable/offsetting credits and reduced application burdens make subsidized affordable-for-sale projects more economically viable.
Creates a new federal tax expenditure and refundable credits that will reduce federal revenue and could increase deficits unless offsets are provided.
Caps, allocation rules, and per‑state limits risk uneven distribution and could leave some high‑need communities, small builders, or specific areas without adequate credits.
Complex program rules (allocation, certification, look‑back rules, liens, recapture/repayment) increase compliance costs and project uncertainty for developers and homeowners, potentially deterring participation.
Based on analysis of 3 sections of legislative text.
Adds a Neighborhood Homes tax credit to subsidize construction/rehab of for-sale affordable homes in distressed communities, with per-unit caps tied to costs and median home prices.
Creates a new federal tax credit called the Neighborhood Homes Credit to subsidize the development and substantial rehabilitation of for-sale homes in distressed urban and rural neighborhoods. The credit is claimed by developers/house builders for each qualified residence sold in an "affordable sale," with per-unit limits based on development cost, a percentage of eligible costs, and a share of the national median new-home price. The law defines allowable development costs, caps acquisition in the eligible-costs calculation, requires an administrative neighborhood homes credit agency to make feasibility and cost reasonableness determinations, and directs credit claim mechanics through existing business tax credit rules (section 38). The aim is to close financing gaps that block construction and rehabilitation in low-income communities while minimizing application burdens and complying with fair housing law.