Legislative State-of-Play
Federal Government Shut Down—Week Six May Offer Glimmers of Hope
The federal government remains mired in the longest shutdown in history. As covered in the October newsletter, the government shut down on October 1 after Congress failed to reach a spending deal for Fiscal Year 2026 (FY26) before the end of FY25 on September 30. Pressure is mounting, with missed paydays for federal employees and critical programs running out of funds.
The economic repercussions of the shutdown loom large. A recent estimate by the nonpartisan Congressional Budget Office finds that the government shutdown will result in a decline in real GDP of between $7 billion to $14 billion depending on the duration.
While the Housing Credit itself is not directly impacted by the shutdown, as it is a tax credit administered by states, other federal agencies, including HUD and USDA, are often integrally involved in many Housing Credit developments, which often receive federal funds or rely on federal insurance or loan programs.
With the government shut down, prospects for additional tax legislation later in the year appear dim as of this writing. Attention in Congress is largely devoted to ending the shutdown, passing other essential legislation, and confirming nominees. In recent days, some senators from both parties have been trying to find potential off-ramps to end the shutdown. As always, ACTION continues working with our bill leads and their staff to make sure we are ready should there be an opportunity to advance Housing Credit priorities.
Bipartisan Housing Legislation Advances in Senate; ACTION Weighs in to Support Increase in Public Welfare Investment Limit
On October 9, the Senate passed two packages of bipartisan housing legislation via amendments to the FY26 National Defense Authorization Act (NDAA, S. 2296): the ROAD to Housing Act (S.Amdt. 3901) and a package of bills that would enhance community development financial institutions (CDFIs) (S.Amdt. 3732). The NDAA is an annual defense and national security policy bill and is considered must-pass legislation. This year, both amendments were added to the Senate’s NDAA by unanimous vote as part of a larger set of amendments (S.Amdt. 3748).
As covered in the September newsletter, the ROAD to Housing Act is a bipartisan housing package combining around 30 standalone bills. One of these, the Community Investment and Prosperity Act, would raise the public welfare investment (PWI) cap for banks from 15 percent of capital and surplus to 20 percent, a move that could generate more investment in the Housing Credit. An October survey of banks conducted by ACTION members AHTCC, AHIC, and NAAHL explored the potential impact of raising the PWI cap. The survey evaluated responses from 22 banks that collectively invested more than $14 billion in the Housing Credit in 2024, which represented two-thirds of all bank investments in the Housing Credit that year. Responses indicated that over 42 percent of these investments, or $6.1 billion, were made by banks nearing their 15 percent PWI cap.
When Congress previously increased the PWI cap from 10 percent to 15 percent in 2006, the growth in public welfare investments was significant: in 2005, national banks made $3.1 billion in public welfare investments, but by 2024, that amount rose to nearly $28 billion. Should Congress enact the cap increase, banks like those surveyed that are nearing the current cap would be able to increase their investments in Housing Credit developments. The legislation would not remove any current regulatory safeguards that protect banks’ customers.
On October 30, members of the ACTION Steering Committee sent a letter to the leadership of the House Financial Services Committee and its Housing and Insurance Subcommittee urging them to include this bill in housing legislation that the chamber is currently drafting.
The House passed its version of the NDAA (H.R. 3838) in September. It does not include any of these amendments. The Senate and House will establish a joint conference committee to negotiate a compromise NDAA that can pass both chambers.
October AHCIA Cosponsorship Update
Are we still building cosponsorship of the AHCIA after the tax reconciliation bill enacted some of our Housing Credit priorities? YES! And we need your help to leverage the momentum from the reconciliation votes to keep adding Republicans to the bill. This is important should there be additional opportunities to advance a tax package in the remainder of this Congress and to build an even stronger foundation of support for the next Congress.
The AHCIA currently has almost 38 percent of Congress cosponsoring, with support evenly divided by Republicans and Democrats. In the House, there were two new cosponsors this past month, bringing the total number of cosponsors there to 161.
- Mike Turner (R-OH-10)
- Julia Brownley (D-CA-26)
We are continuing to add Republicans and Democrats to the bill in pairs and numerous Democrats are still in the queue to join as cosponsors, so please keep up your efforts to enlist more Republicans.
Administration Updates
White House Issues RIFs for 4,000 Federal Employees
On October 10, the White House’s Office of Management and Budget (OMB) issued reduction-in-force, or RIF, notices to approximately 4,000 federal career employees. Among these are over 440 HUD staff and almost 1,450 Treasury staff – including all 81 employees of Treasury’s CDFI Fund. The termination of the CDFI Fund staff will be effective on December 13.
On October 15, a federal judge issued a temporary restraining order blocking the RIFs, and on October 28, she issued a preliminary injunction further blocking the RIFs indefinitely. The Administration is expected to appeal these rulings, meaning that the issue is not fully resolved.
On October 23, 105 Republicans in Congress, led by Senate Finance Chair Mike Crapo (R-ID) – who is also the co-chair of the Senate Community Development Finance Caucus – and Rep. Young O. Kim (R-CA-40), sent a letter to OMB Director Russ Vought and Treasury Sec. Scott Bessent urging them to undo the RIFs affecting the CDFI Fund. The letter highlights the longstanding congressional support for the CDFI Fund and the important work the Fund and CDFIs perform in low-income communities across America. It also explains that these RIFs will jeopardize the major expansion of the Housing Credit that Republicans achieved earlier this year. On October 27, 124 House Democrats sent a similar letter to Director Vought and Sec. Bessent.
IRS Publishes Housing Credit Multipliers for 2026
On October 22, the IRS published Revenue Procedure 2025-32, which includes updated Housing Credit allocations for 2026. This Revenue Procedure reflects the permanent 12 percent increase in 9 Percent Housing Credit authority achieved in the reconciliation bill. The 9 Percent Credit multiplier will be $3.416 per capita (a 41.6¢ increase over 2025); the 9 Percent Credit small-state minimum will be $3,953,600 (a $498,600 increase over 2025); the private activity bond (PAB) multiplier will be $135 per capita (a $5 increase from 2025); and the PAB small-state minimum will be $397,625,000 (an increase of over $8.8 million from 2025). The per-unit rehabilitation minimum will be $8,700 (a $200 increase from 2025).
Potential Changes Coming to HUD’s Continuum of Care
During our last ACTION monthly call, we provided an update on a threat facing supportive housing relying on Continuum of Care (CoC) funding, including supportive housing financed with the Housing Credit.
As those of you who were able to attend the monthly call know, FY25 CoC funds were intended to be disbursed in accordance with a previously issued two-year Notice of Funding Opportunity (NOFO) for FY24 and FY25 funding. However, HUD announced in early July that FY25 CoC funds would not adhere to the previous NOFO, and, instead, will issue a new NOFO for FY25 CoC funding to ensure that the use of these funds would reflect the Administration’s priorities. HUD has not yet issued this NOFO, and we do not expect it to do so until after the shutdown ends. Anonymous reports in the press suggest that the new NOFO will limit the amount of these dollars that fund permanent housing, with a much larger portion going towards temporary housing. Moreover, given the delay on issuing the NOFO, CoCs will exhaust 2024 funds before the 2025 funds are available.
October 28, 22 House Republicans sent a letter to HUD urging the department to renew all existing CoC grants expiring in calendar year 2026 for an additional 12-month period. In their letter, these Republicans stated that “this extension is essential to prevent service disruptions for individuals and families experiencing homelessness, sustain continuity of care for vulnerable populations, and allow HUD adequate time to implement its next generation of homelessness policy reforms.”
If this is an issue your organization is interested in engaging in, please reach out to actioncampaign@enterprisecommunity.org for more information.
ACTION Membership
In October, the ACTION Campaign welcomed two new members to the coalition!
Please join us in welcoming the following new members:
- Lease Las Vegas, Nevada
- Aspen Blue, LLC, Minnesota
Help ACTION continue to grow our membership and advocacy strength by encouraging your networks to support affordable housing and the Housing Credit by joining the coalition. Membership is free.
Together, we can demonstrate to Members of Congress the widespread support for the Housing Credit across the country. You can also help strengthen our reach by following the ACTION Campaign’s LinkedIn page and inviting your connections to follow and join us.
Housing Credit Research
- On October 14, ACTION co-chair NCSHA published the 2024 edition of its State HFA Factbook. The Factbook reveals that the Housing Credit has helped create or preserve over 4.1 million affordable homes since its creation in 1986.
- On October 23, the Council of Large Public Housing Authorities (CLPHA), an ACTION Steering Committee member, published its 10 Year Roadmap for Public Housing Stability Interim Report. The report and the underlying study that informed it find that the baseline cost to preserve the nation’s remaining public housing portfolio is $169.1 billion. The report highlights the critical role that the Housing Credit has played in financing the preservation of public housing, and urges Congress to pass the rest of the AHCIA in order to continue financing the preservation of the remaining stock of public housing.
- A recent report by the Council of Development Finance Agencies analyzes how states issued PABs from 2021-2023. It found that new PAB issuance has overall increased in recent years, while the amount of PAB cap carried forward from prior years has decreased, indicating incredible demand for PABs, which can help finance Housing Credit properties. The report revealed that multifamily housing was among the most common uses of PABs, far ahead of other categories such as sewers, farms, student loans, industrial facilities, and single-family housing. Issuances of PABs for multifamily housing reached a record high of $21.7 billion nationwide in 2023, demonstrating a strong demand for housing, but also that states are increasingly recognizing the need for housing.
1 Comment