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119-s-2638119th CongressWALLET

Energy Efficiency for Affordable Housing Act

Sponsored By: Senator Klobuchar, Amy [D-MN]

Introduced

Summary

Boosts the low-income housing tax credit for energy-efficient rehabilitations. The bill would create a higher rehabilitation credit for existing affordable housing that meets new energy-performance tests and add an extra boost for projects in high-cost areas.

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  • Owners and developers of affordable housing would be able to claim a rehabilitation credit equal to 130 percent of qualifying energy retrofit costs, and 160 percent in high-cost areas when the enhanced-energy rules apply. This raises the tax value of energy-focused rehab work.
  • Projects could qualify either by meeting a Department of Energy advanced building construction standard or by using a Qualified Retrofit Plan written to the bill's rules. This gives a standards-based or plan-based route to the credit.
  • A Qualified Retrofit Plan must be prepared and stamped by a licensed architect or engineer and certify an expected reduction of at least 50 percent in site energy usage intensity compared with a 24-month baseline, measured in British thermal units per square foot per year.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Bigger rehab tax credit for owners

If enacted, owners could count 130% of qualifying rehab costs for the low-income housing credit when an existing building meets the bill's enhanced-energy test. This 130% rule applies only if subsection (b)(2) does not apply to the building. If the building is in a high-cost area and both the enhanced-energy rule and subsection (d)(5)(B) apply, owners could count 160% of qualifying rehab costs. These rules would apply to credits allocated after December 31, 2025.

New energy performance pathways for credit

If enacted, a building could meet the enhanced-energy rule in two ways. The Department of Energy would set a construction standard within 180 days and buildings that meet it would qualify. Or owners could elect a Qualified Retrofit Plan (QRP). A QRP must be written and stamped by a licensed architect or engineer. The QRP must expect a 50% cut in site energy use versus a 24-month baseline and must certify baseline, expected savings, and installation. Site energy is measured in BTU per square foot per year under Energy Secretary guidance.

Credit changes apply after 2025

If enacted, the new rules would apply only to buildings with housing credit allocations after December 31, 2025. For buildings financed in whole or part by certain tax-exempt bonds, the rules would apply only if the bond issue date is after December 31, 2025. This mainly changes timing for allocators, owners, and investors.

Sponsors & CoSponsors

Sponsor

Klobuchar, Amy [D-MN]

MN • D

Cosponsors

  • Sen. Warren, Elizabeth [D-MA]

    MA • D

    Sponsored 7/31/2025

  • Sen. Smith, Tina [D-MN]

    MN • D

    Sponsored 7/31/2025

  • Sen. Van Hollen, Chris [D-MD]

    MD • D

    Sponsored 7/31/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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