Neighborhood Homes Investment Act
Sponsored By: Senator Todd Young
Introduced
Summary
Creates a Neighborhood Homes Credit to subsidize the sale and owner-occupied rehabilitation of homes in distressed and targeted census tracts. States allocate credits and the program sets income and sale-price caps to steer homes to lower-cost owner-occupants.
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- Families and homebuyers: Affordable sales must go to owner-occupants whose family income does not exceed 140% of the area median income and come with a five-year occupancy requirement that can trigger partial repayment if broken.
- Builders and developers: The credit for each qualified residence is limited by tests that include up to 40% of eligible development costs or 32% of the national median new-home sale price.
- State agencies and projects: State-designated neighborhood homes credit agencies get annual allocation ceilings equal to the greater of $9 per person or $12 million, must certify projects and report data to Treasury, and may secure repayments by lien and grant hardship waivers.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Tax credit for affordable-home builders
If enacted, builders and developers could claim a federal tax credit for each qualified affordable home they sell. The credit would be the smallest of three amounts: excess development cost over sale price (agency may permit up to 120% of that excess in some cases), 40% of eligible development costs, or 32% of the national median new-home price. The bill would set rules for what counts as eligible and reasonable development costs, cap how much acquisition can be counted, require a ‘‘substantial rehabilitation’’ test, limit pre-allocation costs, and set a per-State annual ceiling (greater of $9 per person or $12 million) with a three-year carryforward. Credits would only be allowed for homes sold (or rehabs completed) within five years of a State allocation. This would apply for tax years beginning after Dec. 31, 2025.
Who can buy and price caps
If enacted, the bill would set who can buy NHC-supported homes and how much they may cost. A ‘‘qualified homeowner’’ would be an owner-occupant whose family income at contract date is 140% or less of the area median. The max affordable sale price for a single-unit home would be four times the area median family income at contract date (and 125%, 150%, or 175% of that cap for 2-, 3-, or 4-unit homes). Homes must be 1–4 unit houses, condos, or co-op units and be in a census tract the State agency designates as eligible using income, poverty, home-value, city-size, disaster, or shortage tests. If a supported home is sold within five years, the seller must pay a repayment amount to the State agency.
State agency rules and reporting
If enacted, States would have to run the Neighborhood Homes Credit program under a public qualified allocation plan. The plan must set priorities like neighborhood stabilization and long-term homeownership, limit concentration of allocations, simplify applications for small builders, set cost and construction-quality standards, protect buyers in some rehabs, do outreach, and report project-level data each year. A State cannot get its yearly credit amount unless it meets these rules.
State energy subsidies not taxable
If enacted, money or discounts from a State energy office for energy improvements to a qualified home would not count as federal taxable income. The exclusion would apply only to subsidies from State energy offices for homes that meet the Neighborhood Homes Credit definition. This change would apply for tax years beginning after Dec. 31, 2025.
Sponsors & CoSponsors
Sponsor
Todd Young
IN • R
Cosponsors
Mark Warner
VA • D
Sponsored 5/8/2025
Cindy Hyde-Smith
MS • R
Sponsored 5/8/2025
Ron Wyden
OR • D
Sponsored 5/8/2025
Kevin Cramer
ND • R
Sponsored 5/8/2025
Timothy Kaine
VA • D
Sponsored 5/8/2025
Tim Scott
SC • R
Sponsored 5/8/2025
Christopher Coons
DE • D
Sponsored 5/8/2025
Jerry Moran
KS • R
Sponsored 9/11/2025
Richard Durbin
IL • D
Sponsored 9/11/2025
Roll Call Votes
No roll call votes available for this bill.
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