The ACRE Act of 2025 would allow certain lenders—including banks, insurance companies, and farm credit agencies—to exclude interest income from loans secured by rural or agricultural property from their federal taxable income. The eligible loans cover agricultural land, rural single-family homes (up to $750,000), fishing operations, and aquaculture facilities, and must be made after the bill's enactment to borrowers that are not entities from China, Cuba, Iran, North Korea, Russia, or Venezuela. The bill does not provide direct federal funding but uses tax incentives to encourage lending to rural and agricultural sectors by reducing lenders' tax burden. Within five years, the Treasury Department must report to Congress on whether the tax break has actually reduced interest rates on these loans, and the provision takes effect for tax years ending after the bill becomes law.
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