The Affordable Housing Bond Enhancement Act modifies federal tax rules to make it easier and more attractive for state and local governments to issue bonds that finance affordable housing. The bill expands how much money can be borrowed through mortgage revenue bonds, increases the limit on home improvement loans from $15,000 to $75,000 (adjusted annually for inflation), and eliminates restrictions on refinancing mortgages for existing homeowners who meet income requirements. It also reduces the "recapture tax" penalty that homeowners face if they sell their homes within five years of receiving bond-financed mortgages, making the tax structure less punitive over time. Additionally, the legislation streamlines administrative requirements by reducing public notice periods from 90 to 30 days, eliminating certain lender reporting duties, and extending timelines for issuing and revoking mortgage credit certificates. Most provisions take effect after December 31, 2025, with immediate implementation for refinancing loans and lender reporting changes.
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