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119-hr-7414119th CongressWALLET

Affordable Housing Bond Enhancement Act

Sponsored By: Representative Yakym, Rudy [R-IN-2]

Introduced

Summary

Expand housing financing through mortgage revenue bonds (MRBs) and mortgage credit certificates (MCCs). This bill would modernize MRB and MCC rules to give states more flexible bond authority, ease some refinancings, raise home‑improvement loan limits, and cut certain administrative steps to speed housing finance.

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  • Homeowners and prospective buyers: Homeowners meeting principal‑residence and income rules could access MRB refinancing that is treated differently under the bill. The required holding period for related recapture rules is shortened from 9 years to 5 years.
  • Home improvement borrowers: The cap for qualified home‑improvement loans rises from $15,000 to $75,000 and the limit is set to increase with inflation in future years.
  • State housing authorities and lenders: States gain more flexible use and intra‑state transfers or redesignations of unused bond carryforwards. Treasury must provide annual electronic reports to congressional committees, MCC public‑notice windows shrink from 90 days to 30 days, and the lender reporting requirement is removed.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 1 costs, 2 mixed.

Higher home improvement loan limit

This bill would raise the limit for qualified home improvement loans from $15,000 to $75,000. The $75,000 amount would be indexed for inflation for calendar years beginning after 2026, using the usual cost‑of‑living adjustment with 2024 as the base. Any increase that is not a multiple of $100 would be rounded to the nearest $100. The change would apply to loans made after the last day of the calendar year that includes enactment.

Earlier tax recapture for mortgage bonds

This bill would shorten the holding period for mortgage revenue bond (MRB) tax recapture from nine years to five years. Recapture would be calculated on a 5‑year schedule: 20% in year 1, 40% in year 2, 60% in year 3, 80% in year 4, and 100% in year 5. If federally subsidized indebtedness is fully repaid during any year of the four‑year period beginning on the testing date, later years' percentages would be zero. These rules would apply to taxable years beginning after December 31, 2025.

More predictable mortgage tax credits

This bill would set mortgage credit certificate (MCC) rates between 1% and 5% and allow issuers to pick a different rate for each year of the mortgage. It would also change how certain MCC limits are calculated by using the fourth year rather than the second year for nonissued bond references. Issuing authorities would be allowed to revoke certain MCC election amounts until the end of the next calendar year, with Treasury rulemaking to prevent late issuance. These MCC changes would apply to MCCs issued on or after the first day of the second calendar year after enactment and to elections after December 31, 2025 where specified.

Easier refinancing for MRB homeowners

This bill would allow a mortgage revenue bond (MRB) homeowner to refinance without treating that refinance as a new acquisition if, at refinancing, the borrower meets the principal‑residence and income rules. For eligible refinances, the rules that normally limit refinancing would not apply and the market value at refinancing would be used instead of the original acquisition cost. The change would apply to refinancing loans made on or after enactment.

Faster reporting and state bond flexibility

This bill would let states transfer or redesignate unused bond carryforwards within the State for housing uses and allow some bonds issued within three years to be excluded from volume caps up to the carryforward amount. It would require Treasury to report annually to specified Congressional committees about state ceilings and mortgage revenue bond activity for calendar years after enactment. Issuers would have to submit certain statements electronically for calendar years after enactment. The bill would also shift the old lender reporting duty to the entity that issues an MCC, and it would shorten MCC public notices from 90 days to 30 days for notices after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Yakym, Rudy [R-IN-2]

IN • R

Cosponsors

  • Rep. Moore, Gwen [D-WI-4]

    WI • D

    Sponsored 2/9/2026

  • Rep. Vindman, Eugene Simon [D-VA-7]

    VA • D

    Sponsored 5/7/2026

Roll Call Votes

No roll call votes available for this bill.

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