H.R. 3540 would eliminate the Low-Income Housing Tax Credit (LIHTC), a federal tax incentive that has encouraged private investment in affordable housing since 1986. The bill would sunset the program immediately upon enactment, preventing any new buildings from qualifying for the credit in future years, though it would allow existing projects already in service to retain their benefits. This change would affect housing developers, investors, and nonprofits who rely on the tax credit to finance affordable rental housing projects, as well as low-income renters who depend on such housing. The bill contains no new funding provisions, as eliminating the tax credit would reduce federal expenditures rather than require new spending. The legislation was introduced in May 2025 and referred to the House Ways and Means Committee, where it would need approval before proceeding to a floor vote.
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