On April 8, 2025, the federal Affordable Housing Credit Improvement Act (“AHCIA”) was reintroduced in the House with 117 bipartisan co-sponsors from over 30 different states. The bill would expand the Low-Income Housing Tax Credit (“Housing Credit”), our nation’s most successful affordable housing program. AHCIA was first introduced in 2016 and has gained more and more support with each introduction over the past five congresses. It is intended to help finance 1.6 million more affordable rental units over the next decade. A companion bill is expected to be introduced in the Senate soon.
Some of the key provisions of AHCIA include:
- Expand the 9% Housing Credit by restoring the 12.5% cap increase that expired in 2021, and further increase the number of Housing Credits allocated to each state by 50% for the next two years.
- Streamline the election of “Average Income Test” for Bond-financed Housing Credit developments.
- Allow states to maximize production of housing projects built using private activity bonds by reducing the amount of private activity needed to secure Housing Credits from 50% to 25%.
- Provide further flexibility for existing tenants’ income eligibility.
- Basis increases for rural developments, Tribal communities and extremely low-income tenants.
- Make the Housing Credit compatible with energy tax incentives by eliminating basis reductions requirements.
