Late last night, the House passed its reconciliation bill, known as the One Big Beautiful Bill Act (H.R. 1), by a 215–214 vote. Included in the bill are three provisions that would expand and strengthen the Low-Income Housing Tax Credit (LIHTC) program. These include:
- Increasing the allocation of competitive (9%) tax credits by 12.5% from 2026–2029.
- Lowering the bond financing test for non-competitive (4%) tax credits from 50% to 25% for obligations made in calendar years 2026–2029.
- Establishing a 30% basis boost for rural and Native communities for properties placed in service in calendar years 2026–2029.
Analysis from the Affordable Housing Tax Credit Coalition and Novogradac estimates that these provisions, if enacted, would invest $14.1 billion in the LIHTC program and lead to the creation or preservation of over 500,000 affordable rental units.
Following the Memorial Day recess, the Senate will take up the reconciliation bill. While the Senate will likely make changes to the tax and Medicaid provisions in the House bill, it is not certain whether the LIHTC provisions will be modified.
PHADA will provide more details on the reconciliation bill in the next edition of the Advocate.