HR2725119th CongressWALLET

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.

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

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  • Kelly (PA)

    PA • R

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  • Davis (IL)

    IL • D

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  • Estes

    KS • R

    Sponsored 4/8/2025

  • Sanchez

    CA • D

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  • Miller (WV)

    WV • R

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  • Sewell

    AL • D

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  • Murphy

    NC • R

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  • Chu

    CA • D

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  • Kustoff

    TN • R

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  • Moore (WI)

    WI • D

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  • Fitzpatrick

    PA • R

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  • Evans (PA)

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  • Moore (UT)

    UT • R

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  • Schneider

    IL • D

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  • Malliotakis

    NY • R

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  • Gomez

    CA • D

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  • Carey

    OH • R

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  • 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

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  • 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)

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  • Finstad

    MN • R

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  • Schakowsky

    IL • D

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  • 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

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  • LaMalfa

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  • Garcia (CA)

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  • Bergman

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  • Goodlander

    NH • D

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  • Fleischmann

    TN • R

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  • Dingell

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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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    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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    PA • D

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  • Barr

    KY • R

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  • Foster

    IL • D

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  • Lawler

    NY • R

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  • Quigley

    IL • D

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  • Guest

    MS • R

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  • Dean (PA)

    PA • D

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  • Taylor

    OH • R

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    CO • R

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    NY • D

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  • Maloy

    UT • R

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  • Zinke

    MT • R

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  • 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

    Sponsored 4/8/2025

  • Amo

    RI • D

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  • Mann

    KS • R

    Sponsored 4/8/2025

  • Balint

    VT • D

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  • Bost

    IL • R

    Sponsored 4/8/2025

  • Huffman

    CA • D

    Sponsored 4/8/2025

  • Ezell

    MS • R

    Sponsored 4/8/2025

  • 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

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  • Keating

    MA • D

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  • Smucker

    PA • R

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  • McGovern

    MA • D

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  • Ogles

    TN • R

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  • Swalwell

    CA • D

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  • 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

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  • Golden (ME)

    ME • D

    Sponsored 5/14/2025

  • Bentz

    OR • R

    Sponsored 5/14/2025

  • Pingree

    ME • D

    Sponsored 5/20/2025

  • Mackenzie

    PA • R

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  • Moore (NC)

    NC • R

    Sponsored 5/29/2025

  • Khanna

    CA • D

    Sponsored 6/3/2025

  • Levin

    CA • D

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  • De La Cruz

    TX • R

    Sponsored 6/6/2025

  • Sorensen

    IL • D

    Sponsored 6/10/2025

  • Shreve

    IN • R

    Sponsored 6/10/2025

  • Carbajal

    CA • D

    Sponsored 6/17/2025

  • Schmidt

    KS • R

    Sponsored 6/17/2025

  • 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

    Sponsored 6/25/2025

  • 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

    Sponsored 2/25/2026

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