This bill creates a new federal tax credit designed to encourage investment in the construction and renovation of affordable homes for low and moderate-income homebuyers. The credit allows investors who purchase equity investments in certified housing development entities to receive tax credits equal to 7 percent of their investment on the initial purchase date and 8 percent on each of the four anniversary dates thereafter, for a total potential credit of 39 percent over five years. The bill allocates $1 billion in tax credits for 2025, increasing to $3.5 billion annually by 2030-2031, with at least 50 percent dedicated to housing for families earning no more than 80 percent of area median income and at least 5 percent for Native American housing. To qualify, homes must be sold to first-time homebuyers earning no more than 120 percent of area median income, and buyers must maintain the home as their principal residence for five years, with limited exceptions for military personnel. The tax credit program runs from 2025 through 2031, with unused allocations able to carry forward until 2036.
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