S. 2638 provides tax incentives to encourage energy-efficient improvements in affordable housing properties. The bill increases the low-income housing tax credit—a federal incentive that funds the development and rehabilitation of affordable homes—by 30 percent for existing buildings that meet advanced energy performance standards, and by 60 percent for such buildings in high-cost areas. To qualify, buildings must either meet standards set by the Secretary of Energy within 180 days or have a certified retrofit plan reducing energy use by at least 50 percent, with plans designed by licensed architects or engineers. The incentives apply to housing credit allocations made after December 31, 2025, and to bond-financed projects issued after that date. This legislation aims to help affordable housing providers reduce operating costs through energy efficiency while strengthening the nation's low-income housing stock.
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