Affordable Housing Credit Improvement Act of 2025
Sponsored By: Representative LaHood
Introduced
Summary
Rewrites and expands the Low‑Income Housing Tax Credit to boost construction and affordability for very low‑income renters. It would rename the program the Affordable Housing Credit and change how states get credits, who counts as low‑income, and how projects qualify and claim credits.
Show full summary
- Families and residents: Would change tenant rules so most full‑time students under age 24 do not count as low‑income occupants, allow tenant‑based voucher payments to be excluded from rent calculations in certain projects, and add protections for survivors of domestic violence and for veterans.
- Developers and owners: Would raise state allocations and set the minimum allocation at $4,876,000 in 2025, create a bigger credit when at least 20% of units serve extremely low‑income households, treat relocation costs as eligible rehab expenses, and tighten acquisition‑basis and foreclosure timing rules.
- States, tribes, and rural areas: Would require housing agencies to apply community revitalization and cost‑reasonableness criteria, add Indian areas and rural areas to difficult development area rules with specific NAHASDA exceptions, and bar prioritizing local official approval or contributions in allocation plans.
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Bill Overview
Analyzed Economic Effects
11 provisions identified: 7 benefits, 2 costs, 2 mixed.
Bigger credit for deepest‑rent units
Projects that set aside at least 20% of units for extremely low‑income households could get a larger tax credit. The qualifying portion of the building would count as 150% of its usual eligible basis, if the housing agency says the boost is needed for feasibility. This would apply to projects with new credit allocations after enactment, and to certain bond‑financed projects with bond issue dates after December 31, 2025.
Easier bond‑financed credit access
For some bond‑financed projects, the bill would lower the financing threshold from 50% to 25% for obligations first counted after enactment. It would also stop an energy deduction rule from reducing eligible basis for these housing projects. Parts of this would apply to projects with allocations after enactment and to bond issues dated after December 31, 2025.
Relief for disasters and rehab costs
This bill would protect credits after damage if owners rebuild in time. No recapture would apply if reconstruction happens within 25 months; for federally declared disasters, agencies could allow up to 12 more months. During that period, a building’s basis would be held harmless; if not rebuilt in time, past credits would be recaptured. It would also let relocation and temporary housing costs count as rehabilitation expenses when section 280B does not apply. The casualty rule would cover events after the date 25 months before enactment; the rehab‑cost rule would cover costs paid after December 31, 2024.
Tighter limits on basis and foreclosures
This bill would cap acquisition basis for buildings last placed in service less than 10 years before purchase. The acquisition part of basis could not exceed the lowest price paid in the prior 10 years (with inflation) plus seller improvements, and recent owners within five years could not use the rule. It would also delay ending the credit period after a foreclosure until 61 days after notice to the IRS and the state agency; they could block termination if they find a scheme. The basis rule would apply to buildings placed in service after December 31, 2024, and the foreclosure rule to acquisitions after December 31, 2024.
Higher state housing credit amounts
This bill would raise how much housing credit each state can allocate. For 2025, the per‑person amount would be $4.25 and the state minimum would be $4,876,000. Amounts for 2026 and later would grow with cost‑of‑living formulas and rounding rules. These changes would apply to calendar years after December 31, 2024.
More places qualify for extra credits
This bill would expand where projects can get special housing‑credit treatment. Indian and rural areas would be added to the difficult development area rules, with conditions for tribal financing or sponsors. The population cap for some DDA designations would rise from 20% to 30%, and the cap on qualified census tracts would be repealed. The new DDA rules would apply to buildings placed in service after December 31, 2025, and the cap changes would apply to designations made after December 31, 2025.
More flexible housing bond refunding
This bill would relax refinancing rules for some tax‑exempt housing bonds. Within 12 months of a loan repayment, new bonds that refinance the original issue could be treated as refundings, up to the refunded principal. It would also extend a one‑refunding timing limit from 4 years to 10 years and add exceptions. Parts would apply to issues on or after enactment, and parts would apply to repayments after July 30, 2008.
New tenant income and rent rules
This bill would change who can qualify for low‑income units and how rent is counted. A unit would keep its low‑income status if it first housed tenants at or below 60% of area median income and rent caps stay in place; for some cases, 80% may apply. Projects that elect the option would not count tenant‑based vouchers as rent. But a unit rented only by people under 24 who are full‑time students would not count, unless they meet listed exceptions. Rural projects would use one uniform income rule. Most of these rules would start for tax years after December 31, 2024, and the student and voucher rules would start for tax years after December 31, 2025.
New rules for state credit selection
State housing agencies would need to update how they choose projects. They would have to consider if development costs are reasonable and whether a project backs a clear community revitalization plan. Agencies could not score projects based on local officials’ support or opposition and could not favor local government money over other funding. They would also need to consider the needs of enrolled tribal members and others defined by NAHASDA. These changes would apply to qualified allocation plans adopted after December 31, 2025.
Protections for survivors and veterans
This bill would bar owners of tax‑credit properties from denying or ending a lease only because of domestic violence, sexual assault, stalking, or dating violence when the tenant is the victim. Tenants could enforce this in State court, and survivors who stay after a split lease would not be treated as new tenants. It would also allow veteran occupancy preferences while still meeting public‑use rules. These protections would take effect 30 days after enactment for most leases, and the veteran rule would apply to buildings placed in service before, on, or after enactment.
Average‑income test for bond projects
Projects choosing certain tax‑exempt bond treatment would need to meet the Average Income Test. This would apply to elections made after March 23, 2018. Issuers and borrowers would face an added eligibility check.
Sponsors & CoSponsors
Sponsor
LaHood
IL • R
Cosponsors
Sessions
TX • R
Sponsored 4/8/2025
Issa
CA • R
Sponsored 4/8/2025
Mullin
CA • D
Sponsored 4/8/2025
Nunn (IA)
IA • R
Sponsored 4/8/2025
Vasquez
NM • D
Sponsored 4/8/2025
Langworthy
NY • R
Sponsored 4/8/2025
Stevens
MI • D
Sponsored 4/8/2025
DelBene
WA • D
Sponsored 4/8/2025
Tenney
NY • R
Sponsored 4/8/2025
Beyer
VA • D
Sponsored 4/8/2025
Feenstra
IA • R
Sponsored 4/8/2025
Panetta
CA • D
Sponsored 4/8/2025
Buchanan
FL • R
Sponsored 4/8/2025
Larson (CT)
CT • D
Sponsored 4/8/2025
Kelly (PA)
PA • R
Sponsored 4/8/2025
Davis (IL)
IL • D
Sponsored 4/8/2025
Estes
KS • R
Sponsored 4/8/2025
Sanchez
CA • D
Sponsored 4/8/2025
Miller (WV)
WV • R
Sponsored 4/8/2025
Sewell
AL • D
Sponsored 4/8/2025
Murphy
NC • R
Sponsored 4/8/2025
Chu
CA • D
Sponsored 4/8/2025
Kustoff
TN • R
Sponsored 4/8/2025
Moore (WI)
WI • D
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Fitzpatrick
PA • R
Sponsored 4/8/2025
Evans (PA)
PA • D
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Moore (UT)
UT • R
Sponsored 4/8/2025
Schneider
IL • D
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Malliotakis
NY • R
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Gomez
CA • D
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Carey
OH • R
Sponsored 4/8/2025
Horsford
NV • D
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Yakym
IN • R
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Suozzi
NY • D
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Miller (OH)
OH • R
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Lieu
CA • D
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Emmer
MN • R
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Neguse
CO • D
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Hudson
NC • R
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Mrvan
IN • D
Sponsored 4/8/2025
Reschenthaler
PA • R
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McCollum
MN • D
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Houchin
IN • R
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McBride
DE • D
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Flood
NE • R
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Kelly (IL)
IL • D
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Finstad
MN • R
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Schakowsky
IL • D
Sponsored 4/8/2025
Kiley (CA)
CA • R
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Omar
MN • D
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Salazar
FL • R
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Peters
CA • D
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Huizenga
MI • R
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Ramirez
IL • D
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Balderson
OH • R
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Budzinski
IL • D
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Moolenaar
MI • R
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Pappas
NH • D
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Gooden
TX • R
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Beatty
OH • D
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LaMalfa
CA • R
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Garcia (CA)
CA • D
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Bergman
MI • R
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Goodlander
NH • D
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Fleischmann
TN • R
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Dingell
MI • D
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Kim
CA • R
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Casten
IL • D
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Garbarino
NY • R
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DeGette
CO • D
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Cole
OK • R
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Vargas
CA • D
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Valadao
CA • R
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Barragan
CA • D
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Carter (GA)
GA • R
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Tlaib
MI • D
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Walberg
MI • R
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Bera
CA • D
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Calvert
CA • R
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Costa
CA • D
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Rouzer
NC • R
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Houlahan
PA • D
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Barr
KY • R
Sponsored 4/8/2025
Foster
IL • D
Sponsored 4/8/2025
Lawler
NY • R
Sponsored 4/8/2025
Quigley
IL • D
Sponsored 4/8/2025
Guest
MS • R
Sponsored 4/8/2025
Dean (PA)
PA • D
Sponsored 4/8/2025
Taylor
OH • R
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Goldman (NY)
NY • D
Sponsored 4/8/2025
Evans (CO)
CO • R
Sponsored 4/8/2025
Morelle
NY • D
Sponsored 4/8/2025
Maloy
UT • R
Sponsored 4/8/2025
Torres (NY)
NY • D
Sponsored 4/8/2025
Zinke
MT • R
Sponsored 4/8/2025
Crow
CO • D
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Pettersen
CO • D
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Guthrie
KY • R
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Cleaver
MO • D
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Hinson
IA • R
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Deluzio
PA • D
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Wittman
VA • R
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Magaziner
RI • D
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Johnson (SD)
SD • R
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Matsui
CA • D
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Kiggans (VA)
VA • R
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Thanedar
MI • D
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Comer
KY • R
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McIver
NJ • D
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Rogers (KY)
KY • R
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Amo
RI • D
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Mann
KS • R
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Balint
VT • D
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Bost
IL • R
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Huffman
CA • D
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Ezell
MS • R
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Craig
MN • D
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Stauber
MN • R
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Harder (CA)
CA • D
Sponsored 4/14/2025
Crank
CO • R
Sponsored 4/14/2025
Ross
NC • D
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Rose
TN • R
Sponsored 4/14/2025
Keating
MA • D
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Smucker
PA • R
Sponsored 4/17/2025
McGovern
MA • D
Sponsored 4/24/2025
Ogles
TN • R
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Swalwell
CA • D
Sponsored 4/24/2025
DesJarlais
TN • R
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Scanlon
PA • D
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Gonzales, Tony
TX • R
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McGarvey
KY • D
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Newhouse
WA • R
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Davis (NC)
NC • D
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Owens
UT • R
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Liccardo
CA • D
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Timmons
SC • R
Sponsored 5/14/2025
Golden (ME)
ME • D
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Bentz
OR • R
Sponsored 5/14/2025
Pingree
ME • D
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Mackenzie
PA • R
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Moore (NC)
NC • R
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Khanna
CA • D
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Levin
CA • D
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De La Cruz
TX • R
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Sorensen
IL • D
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Shreve
IN • R
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Carbajal
CA • D
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Schmidt
KS • R
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Himes
CT • D
Sponsored 6/25/2025
Miller-Meeks
IA • R
Sponsored 6/25/2025
Underwood
IL • D
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Rutherford
FL • R
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Escobar
TX • D
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Green (TN)
TN • R
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Tran
CA • D
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Messmer
IN • R
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Riley (NY)
NY • D
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Harrigan
NC • R
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Turner (OH)
OH • R
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Brownley
CA • D
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Edwards
NC • R
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McClain Delaney
MD • D
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LaLota
NY • R
Sponsored 2/25/2026
Vindman
VA • D
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Roll Call Votes
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