Neighborhood Homes Investment Act
Sponsored By: Representative Kelly (PA)
Introduced
Summary
Creates a Neighborhood Homes Credit to spur development and substantial rehabilitation of affordable, owner-occupied homes in distressed neighborhoods. It also excludes certain state energy subsidies for those qualified residences from federal gross income.
Show full summary
- Families and homebuyers would get more affordable owner-occupied homes targeted to distressed census tracts and a 5-year principal-residence rule that can trigger repayment if a home is sold early. Repayment can be up to 50% of the gain and phases down by 10 percentage points each full year.
- Homeowners who rehabilitate their own home would be eligible for an owner-occupied rehabilitation credit capped at $50,000 and generally limited to 50% of qualifying rehab costs above amounts paid to the homeowner. The bill also covers special remediation like pyrrhotite when certified by testing.
- States would create a Neighborhood Homes Credit Agency to allocate credits, certify projects, place liens, waive repayments for hardship, and report to the IRS. Annual state ceilings use the greater of $9 per resident or $12,000,000, plus carryover.
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 3 benefits, 0 costs, 2 mixed.
Homeowner credit for major repairs
If enacted, homeowners could get a tax credit for a qualified rehab of their own home. The credit would equal the smallest of: your net rehab cost, 50% of rehab costs, or $50,000. You must own and live in the home at the contract date, have income at or below the area median, and the work must meet the program’s substantial rehab test. The State agency would need to certify completion. This would apply for tax years after December 31, 2025.
Tax credit for builders selling affordable homes
If enacted, small builders could claim a new tax credit when they sell a qualified home at an affordable price. The credit would be the smallest of: extra development cost over the sale price, 40% of eligible costs, or 32% of the national median new‑home price, and it would be limited by the State’s allocation. Eligible costs would follow State standards, cap acquisition at 75% of total, and generally exclude pre‑allocation costs except property purchases within three years. Homes must be in approved census tracts; condos and co‑ops are eligible, with costs split by unit floor space. Sales to related parties (10% ownership test) would not qualify, and certain energy‑credit rules would not reduce costs for this credit. These rules would apply to sales in tax years after December 31, 2025.
Rules for buyers of affordable homes
If enacted, the sale price would be capped at 4 times the area’s median family income, with higher caps for 2‑, 3‑, and 4‑unit homes (125%, 150%, 175% of the base). Your family income must be 140% of area median or less, checked at the contract date. For five years after you buy, you would need to use the home as your main home; if you rent it out, you could not deduct rental expenses for that time. If you sell within five years, you could owe a repayment on your gain: 50%, dropping by 10 points each full year (50%, 40%, 30%, 20%, 10%). The State agency could place a lien and may waive repayment for hardship. These rules would apply in tax years after December 31, 2025.
How states would run the program
If enacted, Governors would name a state agency to set standards, certify projects, and report results. Each year, a state’s credit ceiling would be the larger of $12 million or $9 per resident, plus certain expirations and prior‑year unused amounts, with up to three years of carryforward. States would face category caps: generally no more than 20% of allocations to certain tract types, or up to 40% if the state qualified for the $12 million floor. The federal government would publish project data without identifying buyers, and HUD would post eligible tract lists. These rules would apply starting with tax years after December 31, 2025.
State energy rebates not taxed
If a state energy office gives you a subsidy for energy upgrades to a qualified home, it would not count as taxable income. This change would apply in tax years after December 31, 2025.
Sponsors & CoSponsors
Sponsor
Kelly (PA)
PA • R
Cosponsors
Larson (CT)
CT • D
Sponsored 4/10/2025
Carey
OH • R
Sponsored 4/10/2025
Sewell
AL • D
Sponsored 4/10/2025
Buchanan
FL • R
Sponsored 4/10/2025
Davis (IL)
IL • D
Sponsored 4/10/2025
Miller (WV)
WV • R
Sponsored 4/10/2025
Panetta
CA • D
Sponsored 4/10/2025
Feenstra
IA • R
Sponsored 4/10/2025
Kustoff
TN • R
Sponsored 4/10/2025
Malliotakis
NY • R
Sponsored 4/10/2025
Moran
TX • R
Sponsored 4/10/2025
Kelly (IL)
IL • D
Sponsored 4/17/2025
Meuser
PA • R
Sponsored 4/17/2025
Meeks
NY • D
Sponsored 4/17/2025
Correa
CA • D
Sponsored 4/17/2025
Pettersen
CO • D
Sponsored 4/17/2025
Zinke
MT • R
Sponsored 4/17/2025
Smucker
PA • R
Sponsored 4/17/2025
Houlahan
PA • D
Sponsored 4/17/2025
Nunn (IA)
IA • R
Sponsored 4/17/2025
Tonko
NY • D
Sponsored 4/17/2025
Tenney
NY • R
Sponsored 4/17/2025
Dingell
MI • D
Sponsored 4/17/2025
Chu
CA • D
Sponsored 4/17/2025
Davis (NC)
NC • D
Sponsored 4/28/2025
Vasquez
NM • D
Sponsored 4/28/2025
DeGette
CO • D
Sponsored 4/28/2025
Rulli
OH • R
Sponsored 4/28/2025
Bishop
GA • D
Sponsored 4/28/2025
Craig
MN • D
Sponsored 4/29/2025
McCollum
MN • D
Sponsored 4/29/2025
Omar
MN • D
Sponsored 5/1/2025
Mrvan
IN • D
Sponsored 5/7/2025
LaHood
IL • R
Sponsored 5/20/2025
Budzinski
IL • D
Sponsored 6/2/2025
Peters
CA • D
Sponsored 6/2/2025
Schakowsky
IL • D
Sponsored 6/3/2025
Brownley
CA • D
Sponsored 6/5/2025
Sorensen
IL • D
Sponsored 6/6/2025
Mann
KS • R
Sponsored 6/6/2025
Soto
FL • D
Sponsored 6/11/2025
Lawler
NY • R
Sponsored 6/11/2025
Evans (PA)
PA • D
Sponsored 6/25/2025
Hayes
CT • D
Sponsored 7/14/2025
Landsman
OH • D
Sponsored 7/14/2025
Strickland
WA • D
Sponsored 7/14/2025
Beatty
OH • D
Sponsored 7/14/2025
Davids (KS)
KS • D
Sponsored 7/15/2025
Neguse
CO • D
Sponsored 7/22/2025
Khanna
CA • D
Sponsored 8/19/2025
McBath
GA • D
Sponsored 8/19/2025
Hinson
IA • R
Sponsored 8/19/2025
Guest
MS • R
Sponsored 8/19/2025
Kelly (MS)
MS • R
Sponsored 9/3/2025
Rutherford
FL • R
Sponsored 9/3/2025
Krishnamoorthi
IL • D
Sponsored 9/3/2025
Bera
CA • D
Sponsored 11/18/2025
McGuire
VA • R
Sponsored 11/18/2025
Harder (CA)
CA • D
Sponsored 11/18/2025
Messmer
IN • R
Sponsored 11/18/2025
Suozzi
NY • D
Sponsored 1/20/2026
Ezell
MS • R
Sponsored 2/20/2026
Finstad
MN • R
Sponsored 3/3/2026
Houchin
IN • R
Sponsored 3/3/2026
DelBene
WA • D
Sponsored 3/5/2026
Roll Call Votes
No roll call votes available for this bill.
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