Neighborhood Homes Investment Act

Creates a new federal tax incentive called the Neighborhood Homes Credit to subsidize the production and sale of affordable “starter” homes in distressed and underserved neighborhoods. The credit is administered through state-level allocation agencies with annual state caps, rules for credit calculation, reporting and plan requirements for state agencies, and a 5-year resale recapture if an assisted home is sold above the affordability limit.

The law aims to lower the ‘‘value gap’’ barrier to building and renovating affordable homes, direct subsidies to low- and moderate-income buyers and neighborhoods, simplify access for small developers, and require state transparency and fair-housing consistency while changing the Internal Revenue Code to implement the credit.