Legislative State-of-Play
Government Partially Shuts Down After Funding Deal Hits Speedbump
Due to Democrats’ objections to the Fiscal Year 2026 (FY26) Department of Homeland Security (DHS) funding bill in light of recent events in Minnesota, the Senate did not pass the full minibus spending package that the House had passed on January 22, which combined the remaining six unfinished FY26 appropriations bills, including the DHS bill, before funding for these agencies ran out by the January 30 end of the Continuing Resolution (CR). As such, much of the government, including HUD and the Treasury Department, is currently shut down. Last week, the President and Senate Minority Leader Chuck Schumer (D-NY) negotiated an agreement, which the Senate passed on January 30 by a 71-29 margin, to provide full-year funding for federal agencies covered by five of the remaining six bills and a two-week CR for DHS (the sixth appropriations bill) so that negotiations for that department can continue.
HUD and Treasury program funding levels in the Senate-passed five-bill minibus are unchanged from the six-bill minibus that the House previously passed. However, because the Senate replaced the full-year DHS title with a short-term CR, the House must now take up the Senate-passed package to end the shutdown. (Since the House was in a district work period last week, they were unable to vote on Friday or over the weekend while Representatives were home.) House Speaker Mike Johnson (R-LA-04) plans to bring it to the floor for a vote on Tuesday.
Legislative Action and Housing Opportunities on the Horizon
Both chambers of Congress are continuing to work on bipartisan housing authorization packages that include key priorities for the Housing Credit. As a recap: last year, the full Senate passed the ROAD to Housing Act as part of the annual defense authorization bill, but ROAD was ultimately left out of the final version of the defense legislation. Senate leadership could bring ROAD as a standalone measure to the floor for another vote soon. Also late last year, as ACTION previously reported, the House Financial Services Committee advanced the Housing for the 21st Century Act, which is currently awaiting floor consideration.
While ROAD and 21st Century are not identical packages, both include around a dozen overlapping provisions, including the Community Investment and Prosperity Act (CIPA), a top priority among Housing Credit stakeholders that could drive more investment to the program. CIPA would increase the Public Welfare Investment (PWI) cap for banks from 15 percent of capital and surplus to 20 percent, while preserving all existing safeguards. Because many banks are nearing the current cap, this change could unlock significant new investment in the Housing Credit. A survey conducted late last year 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 $6.1 billion in PWI investments were made by banks nearing their 15 percent cap, representing over 42 percent of these investments.
ACTION remains engaged with House and Senate leadership to ensure the PWI cap increase is included in any final package.
No News on Tax Legislation Prospects
Conversations around the possibility of a budget reconciliation bill in 2026, which could provide an opportunity to advance tax provisions, continue, but no clear path is set as of this writing. While some Republican leaders are eager to pursue another reconciliation effort, others remain skeptical, and views vary widely on scope and feasibility. Given these divisions, prospects for a second reconciliation package remain slim. Moreover, the chance of a bipartisan tax bill later in the year remains uncertain.
ACTION continues to work closely with the Affordable Housing Credit Improvement Act (AHCIA) lead sponsors and staff to identify viable paths to advance Housing Credit provisions from the AHCIA as opportunities emerge.
Sen. Gallego Publishes Housing Agenda
On January 14, Sen. Ruben Gallego (D-AZ) released a wide-ranging agenda to address the nation’s housing crisis. The first recommendation in his proposal is to strengthen, protect, and expand the Housing Credit, including by enacting the extremely low-income basis boost contained in the AHCIA. Another top recommendation is to increase the caps that Fannie Mae and Freddie Mac (together, the Government-Sponsored Enterprises or GSEs) can invest in the Housing Credit each year.
AHCIA Cosponsorship
The push to build cosponsorship of the AHCIA continues, and we need your help to leverage the momentum from the One Big Beautiful Bill Act votes to add more 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 ensure a strong foundation of support for the next Congress.
The AHCIA currently has over 38 percent of Congress cosponsoring, with support evenly divided by Republicans and Democrats. Last Congress, we had nearly 60 percent of Congress signing on as cosponsors. There are a number of Democrats in the queue waiting to join as cosponsors, so please keep up your efforts to enlist more Republicans and make sure we finish this session of Congress with strong cosponsorship.
Administration Updates
President Trump Seeks to Reduce Homeownership Costs
In a widely anticipated speech on housing needs at the World Economic Forum last month, President Trump outlined several proposals his administration intends to pursue to make homeownership more affordable, but did not mention efforts related to affordable rental housing broadly or the Housing Credit specifically. Following the President’s speech, the White House issued an executive order directing the Federal Housing Administration, the Federal Housing Finance Agency, and the departments of Agriculture and Veterans’ Affairs to promulgate regulations prohibiting federal mortgage insurance programs from insuring mortgages on single-family homes purchased by large institutional investors and preventing the GSEs from guaranteeing such loans.
ACTION will continue to monitor future administrative actions that could impact the Housing Credit.
Census Bureau Releases Five-Year ACS Data
On January 29, the Census Bureau published the 2020-2024 American Community Survey (ACS) Five-Year Estimates. The release of this data was delayed due to last year’s shutdown. ACTION will use this data to update its fact sheets in the coming weeks. Stay tuned!
ACTION Membership
In January, the ACTION Campaign welcomed one new member to the coalition!
Please join us in welcoming the following new member:
- Valora Ventures, Puerto Rico
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.
Housing Credit Research
- On December 3, Congress’ Joint Committee on Taxation (JCT) published its annual estimates of federal tax expenditures for Fiscal Years (FY) 2025-2029; JCT estimated that the Housing Credit will cost $80.3 billion from FY25-29, which is an average of $16.1 billion per year. An analysisby ACTION member Novogradac & Co. notes that this projection has increased by 11.8 percent compared to last year’s estimate, largely a reflection of the historic expansion of Housing Credit resources via the One Big Beautiful Bill Act. However, these are the immediate, short-term costs to the federal government, and do not reflect the long-term economic and societal benefits to communities, families, and businesses that the Housing Credit provides.
- A recent article in the Social Innovations Journal explores the rise of nonprofit Housing Credit developers whose primary purpose is actually the provision of social and health services to special populations, such as the elderly, those battling substance-use disorder, people experiencing homelessness, and those with special needs. Many of these organizations reported becoming affordable housing developers in order to best provide their services, since many organizations reported that housing was the missing piece in the lives of their clients. It contains case studies of several mission-driven developers.
Housing Credit in the News
- A December 31 article in Affordable Housing Finance, which includes interviews with several ACTION members, reveals that a number of leaders in the affordable housing space are optimistic about 2026, particularly because of the significant expansion in Housing Credit resources enacted via OBBBA.
- A January 23 article in the Arkansas Times profiles a new Housing Credit property that will serve veterans in Fayetteville, AR. The property is being touted as a potential future model for other affordable housing for veterans. The article features an interview with AHCIA original cosponsor Sen. John Boozman (R-AR).
- A January 28 article in the New York Post covers a recent analysis revealing that affordable housing construction reached record highs in 2024. Part of this increase was attributed to the enactment of the Average Income Test for the Housing Credit, which was one of ACTION’s top priorities.
