H.R.2725 - Affordable Housing Credit Improvement Act of 2025 (119th Congress)
Summary
H.R.2725, the Affordable Housing Credit Improvement Act of 2025, aims to reform the low-income housing credit by amending the Internal Revenue Code of 1986. The bill addresses various aspects of affordable housing, including state allocation formulas, tenant eligibility, credit eligibility, and assistance for Native American and rural communities. It seeks to increase the availability and effectiveness of the low-income housing tax credit to better serve those in need.
Expected Effects
The bill is likely to increase the amount of affordable housing available by incentivizing developers through tax credits and streamlining eligibility requirements. It could also lead to more investment in housing in underserved communities, including rural and Native American areas. The changes to tenant eligibility rules may provide more stability for vulnerable populations.
Potential Benefits
- Increased state allocations for low-income housing credits, leading to more projects.
- Expanded tenant eligibility criteria, including protections for victims of domestic abuse and revised student occupancy rules.
- Enhanced credit eligibility and determination rules, such as modifications to previous ownership rules and increased credit for projects serving extremely low-income households.
- Targeted assistance for Native American and rural communities through specific allocation plans and difficult development area designations.
- Revisions to tax-exempt bond financing, promoting the use of bonds for affordable housing projects.
Potential Disadvantages
- Increased complexity in the administration of the low-income housing credit program due to numerous amendments.
- Potential for unintended consequences from changes in tenant eligibility rules.
- Possible delays in project development due to increased cost oversight and accountability measures.
- Risk of inefficient allocation of resources if the criteria for community revitalization plans are not well-defined.
- The 25% tax-exempt bond financing requirement may be too restrictive.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble) by promoting affordable housing. It falls under Congress's power to tax and spend for the general welfare. The bill does not appear to infringe on any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).