Legislative State-of-Play
21st Century ROAD to Housing Act Becomes Law!
At 12:00 a.m. on July 11, the 21st Century ROAD to Housing Act became law! The President opted not to sign the bill in protest of Congress not passing unrelated election reform legislation; however, the Constitution establishes that legislation passed by Congress becomes law 10 days (excluding Sundays) after being delivered to the President’s desk, even without a presidential signature, so long as the President does not veto it. The 21st Century ROAD to Housing Act is arguably the most significant standalone, non-tax housing legislation Congress has passed in a generation.
ACTION’s top priority in the law is increasing the Public Welfare Investment (PWI) cap from 15 percent of banks’ capital and surplus to 20 percent. This provision will allow banks that are up against the cap to increase their investments in the Housing Credit. After Congress last raised the PWI cap in 2006, banks significantly increased their annual PWI investments. Investment went up by roughly ninefold between 2005, the year before Congress raised the PWI cap, and 2024, the year for which the most recent data is available. The newly increased PWI cap complements last year’s historic expansion of the Housing Credit. Federal banking regulators will need to update their guidance to reflect the new PWI limit, and states with banking statutes that do not automatically conform with federal banking rules may need to pass legislation to allow banks chartered in those states to take advantage of the higher limit. ACTION will continue to monitor implementation progress on the PWI cap increase.
The law also includes important provisions to strengthen HUD and USDA programs often used in conjunction with the Housing Credit. The law significantly reforms the HOME program, which helps finance around 15 to 20 percent of Housing Credit units annually, and USDA’s Rural Housing Service, which will better enable use of the Housing Credit for the preservation of affordable homes for residents in rural communities.
The law also includes the Administration’s priority to prevent large institutional investors from purchasing single family homes, but does not include language from some previous iterations of the bill that would have required institutional investors in so-called “build-to-rent” and “renovate-to-rent” properties to sell such properties after seven years. We appreciate efforts from ACTION Campaign members to ensure the enacted text does not negatively impact single-family rental housing financed with the Housing Credit.
ACTION is deeply grateful to the champions in Congress who have worked tirelessly to advance this legislation, especially Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA); House Financial Services Committee Chairman French Hill (R-AR-02) and Ranking Member Maxine Waters (D-CA-43); House Financial Services Housing and Insurance Subcommittee Chairman Mike Flood (R-NE-01) and Ranking Member Emanuel Cleaver (D-MO-05); and all the Congressional staff who worked tirelessly to draft, negotiate, and pass the legislation. ACTION also thanks all the advocates across the country – this would not have been possible without your dedication.
Outlook for Tax Legislation Dimming
Congressional Republicans are facing obstacles as they seek to pass a third budget resolution to facilitate reconciliation legislation that can bypass the Senate filibuster. House Republicans took the first step on July 22, passing a budget resolution on the House floor. While reconciliation is often a strategy for moving tax legislation, House leadership decided not to use this budget resolution to direct the Ways and Means Committee to include tax legislation, instead maintaining a narrow focus primarily on defense spending.
The Senate is not likely to take immediate action to further advance the budget process. Senate Majority Leader John Thune (R-SD) has publicly said that the House’s effort is unlikely to succeed in the Senate, and that he would not bring a budget resolution to the floor until September at the earliest.
Despite the challenges facing reconciliation 3.0, House Majority Leader Steve Scalise (R-LA-01) told reporters that congressional Republicans are exploring a subsequent fourth budget reconciliation package, which could include tax provisions. ACTION’s sources on Capitol Hill say that Republicans remain interested in addressing affordability concerns across the country, including housing affordability.
Yet, as covered in ACTION’s July newsletter, time is rapidly running out for Republicans to advance legislation of any type, including must-pass appropriations legislation. Additionally, recent changes in the Senate, including the unexpected passing of Budget Committee Chairman Lindsey Graham (R-SC) and the ongoing medical absence of Sen. Mitch McConnell (R-KY), make passing even partisan legislation more challenging.
Congress could still advance a bipartisan tax package towards the end of the year, likely after the election. Though the same timing pressures exist, there are fewer procedural hurdles for a bipartisan tax package to overcome than a reconciliation package faces. ACTION remains in regular contact with our congressional champions regarding opportunities to advance provisions from the Affordable Housing Credit Improvement Act (AHCIA).
Congress is Home for August Recess; Now is the Time to Advocate!
Congress is working from home for most of August and into early September. This is typically the longest time each year that Members spend in their districts and states, giving local advocates the perfect opportunity to show them the Housing Credit in action. ACTION has just updated its In-District Advocacy Guide to help affordable housing advocates secure support for the Housing Credit and the AHCIA. Getting Members of Congress and their staff to a Housing Credit property is invaluable, so the guide contains steps you can take to invite them to a site visit, grand opening, or groundbreaking. It also has tips and tricks for building support in other ways, such as writing an op-ed, submitting a letter to your newspaper’s editor, social media strategies, and more. Since it’s an election year, Congress is also set to be at home in their districts campaigning during most of October and the first week of November, so advocates should work to schedule additional site visits and meetings then as well.
Another way to help Members of Congress hear from their constituents, especially about the importance of the Housing Credit, is by creating video testimonials featuring residents who live in Housing Credit properties. We are asking ACTION members to help capture these testimonials and share the local, people-centered impact these federal policies have in communities.
- Create a short video (up to two minutes long) telling Congress why the Low-Income Housing Tax Credit is so important for your community, business, or family.
- Whether you use your cellphone or a professional camera — it’s all about the story and message. (Videos shot on phones are often better, because they are more authentic, but be sure to shoot the videos in areas without too much background noise.)
- Who the best speaker to connect with your Senators or Representative? It is ideal to hear from residents, but it could also be a community leader, a business owner, or a property owner.
- Be creative! Submit videos to housingactioncampaign@gmail.com.
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 to add more members of Congress to the bill. In particular, ACTION is targeting Republicans, as both the House and Senate versions of AHCIA have Democrats waiting to be added, as we seek to maintain party parity. Strong cosponsorship 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 39 percent of Congress (across both the House and Senate) cosponsoring, with support evenly divided by Republicans and Democrats. Last Congress, we had nearly 60 percent of Congress signing on as cosponsors.
Administration Updates
New CRA Proposed Rule Published
On July 31, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), two of the three federal banking regulators, published a Notice of Proposed Rulemaking (NPR) that would change their current rules that implement the Community Reinvestment Act (CRA). The Federal Reserve Board, the third federal banking regulator, is not currently involved in this process. The CRA is a landmark federal law enacted in 1977 that is responsible for driving the overwhelming majority of investments in the Housing Credit – around 80 percent as of 2024. However, the regulations implementing the CRA have not been updated since 1995, over 30 years ago. As explained in the August 2025 newsletter, the banking regulators decided to rescind a 2023 proposed update to the rules implementing the CRA.
This proposed rule is a narrower, more targeted update of the existing 1995 CRA regulations than the 2023 version would have been. It aims to increase focus on lending, ensure that community development grants actually benefit communities, reduce burdens, and increase clarity and objectivity. Notably, it proposes to revise the asset thresholds of different sizes of banks: (1) it would redefine small banks as those with assets under $1 billion, up from $412 million; (2) replace intermediate small banks with intermediate banks, defined as those with assets between $1 billion and $10 billion, instead of between $412 million and $1.649 billion; and (3) redefine large banks as those with assets greater than $10 billion, up from $1.649 billion. ACTION is still analyzing the proposal, which could have significant impacts on the Housing Credit. The banking regulators are accepting public comments until 60 days after the NPR is officially published in the Federal Register, which is expected to be early this month.
ACTION Membership
In July, the ACTION Campaign welcomed one new member to the coalition!
Please join us in welcoming the following new member:
- LAFHBuilds, California
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
- A recent analysis of fresh HUD data about the Housing Credit by ACTION member Novogradac & Co. reveals that the Housing Credit continues to serve extremely-low-income (ELI) households: over 57 percent of those living in Housing Credit properties earn up to 30 percent of the area median income, the highest percentage of ELI households served since at least 2015. The analysis also reveals that over 48 percent of Housing Credit residents received at least some rental assistance, also the highest percentage since at least 2015. The analysis calls for increased investments in the Housing Credit and related programs in order to continue addressing the affordable housing crisis.
- A recent analysis of Harvard JCHS’s 2026 State of the Nation’s Housing report by Novogradac notes that the report highlights the continued importance of the Housing Credit to addressing the nation’s affordable housing crisis, but argues that increased investments will be necessary to better address it.
- A July 16 Novogradac blog post analyzes the recent National Multifamily Housing Council Housing Affordability Toolkit. The blog post highlights the critical role of the Housing Credit to financing affordable housing and policy recommendations in the report to make it even more effective.
- A study published on July 20 in the journal Housing Policy Debate found that new Housing Credit properties in five Florida metro areas actually increased the sale price of nearby homes by almost 10.7 percent, while, at the same time, rents in nearby market-rate apartments are 1.1 percent to 1.3 percent lower than they would have been if the Housing Credit property had not been built. This study demonstrates the incredible benefits of the Housing Credit for nearby homeowners and market-rate apartment residents.
- The 2026 edition of the Secure Homes, Strong Communities report by the National Association of Housing and Redevelopment Officials (NAHRO), an ACTION Steering Committee member, published on July 21, explores various federal affordable housing programs. For the Housing Credit, the report finds that 52 percent of Housing Credit properties utilized the 9 Percent Credit, 33 percent of Housing Credit properties utilized the 4 Percent Credit, 12 percent of Housing Credit properties used both 9 Percent and 4 Percent Credits, and three percent of Housing Credit properties utilized the temporary Great Recession-era Tax Credit Exchange Program. It also finds that 39 percent of Housing Credit units are two-bedroom, 35 percent are one-bedroom, 17 percent are three-bedroom, two percent are at least four-bedroom, and six percent are studio units. As of 2024, 61 percent of Housing Credit properties were new construction, 36 percent were rehabilitation projects, and two percent were a mix of both. A number of Housing Credit properties targeted specific populations: 63 percent are for families, 33 percent are for the elderly, 19 percent are for individuals with disabilities, and 11 percent are for people formerly experiencing homelessness. Lastly, 12 percent of properties have up to 10 units, 8 percent range from 11 to 20 units, 35 percent range from 21-50 units, 24 percent have 51-99 units, and 21 percent have at least 100 units. The report calls on Congress to pass the rest of the AHCIA.
- A July 22 blog post by Novogradac analyzes a recent renter survey report conducted by the National Low Income Housing Coalition (NLIHC), an ACTION Steering Committee member. It explores findings from NLIHC’s report about why people moving or looking to move to a new rental home have struggled to do so, but notes that the Housing Credit has helped finance affordable rental housing. It calls for further expansion of the Housing Credit in order to build and preserve additional affordable housing.
- On July 23, NLIHC published the 2026 editionof its annual Out of Reach: The High Cost of Housing report. It finds that the 2026 housing wage – how much a full-time worker must earn to afford a modest rental home at fair market rent without spending more than 30 percent of income – is $34.73 for a two-bedroom rental home and $29.19 for a one-bedroom rental home, both up since last year. Yet the report finds that the average renter earns $24.84, more than $4 an hour less than is needed to afford a one-bedroom rental home and nearly $10 an hour less than is needed to afford a two-bedroom rental home without spending more than 30 percent of their income. The report calls for further expanding and expanding the Housing Credit by passing the AHCIA.
- On July 24, the National Association of Affordable Housing Lenders, an ACTION Steering Committee member, published a report on the Community Reinvestment Act (CRA). It finds that the CRA incentivized around 80 percent of Housing Credit equity investments in 2024, or just over $23 billion. From 2015-2022, the Housing Credit comprised 79 percent of Public Welfare Investments made by banks regulated by the OCC, or $95 billion. Together, these two findings demonstrate the importance of the CRA for encouraging investments in the Housing Credit.
Housing Credit in the News
- On July 23, the University of Maryland published results from a recent survey it conducted across battleground states and House districts. The survey found that, nationally, 83 percent of respondents were in favor of providing tax incentives to home builders to build or repair affordable homes. Broken down by political party, 80 percent of Republican respondents, 88 percent of Democratic respondents, and 81 percent of independent respondents expressed support for this idea.
- A July 24 article in Multi-Housing News reveals that Texas has made its largest allocation of Housing Credits ever this year. The Lone Star State will finance 70 properties – mostly for new construction, but with some preservation – this year, totaling over 4,400 affordable units. To finance these affordable homes, Texas will allocate nearly $115 million in 9 Percent Housing Credits, around $15 million more than it did last year. This record-breaking financing is the direct result of the historic expansion of Housing Credit resources last year.
- A July 28 article in the San Jose (Calif.) Spotlight about the enactment of the 21st Century ROAD to Housing Act includes a quote from ACTION member Eden Housing highlighting the new increase in the PWI cap and the anticipated increase in Housing Credit investments that should result from this increase.
