CRA Update
New CRA Proposed Rule Formally Published in Federal Register
On August 12, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), two of the three federal banking regulators, formally published in the Federal Register the Notice of Proposed Rulemaking (NPR) that would change their current rules that implement the Community Reinvestment Act (CRA). The CRA is a landmark federal law enacted in 1977 that requires banks to serve the communities in which they have a presence through lending, investment, and services. CRA drives the overwhelming majority of investments in the Housing Credit – around 80 percent of Housing Credit equity annually as of 2024. Notably, the Federal Reserve Board, the third federal banking regulator, is not currently participating in this process.
As covered in last month’s ACTION newsletter, this proposed rule would revise the asset thresholds of different sizes of banks: it would (1) 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 working on a series of tools for ACTION members to use in their CRA advocacy, including talking points and a template comment letter. Stay tuned for more information soon. In addition, ACTION intends to submit its own comment letter on behalf of Steering Committee members. Comments are due by Tuesday, October 13, via the instructions in the link in the first paragraph.
Legislative State-of-Play
Congress’ August Recess Wrapping Up; Sprint to the Midterms
The House returned to Washington from its August Recess this week, and the Senate will be back in town on September 14. They’ll only be in town for a couple of weeks before the end of the fiscal year on September 30, after which they will depart again for most of October.
Congress seems fairly close to reaching a stopgap spending deal (a.k.a. a continuing resolution or CR) to fund the government at current levels through early December (after the election). Both chambers have passed their own continuing resolutions, which will need to be reconciled—including the date through which the CR would fund the government—but unlike last year, Washington insiders do not expect another government shutdown after the fiscal year ends.
At this point, there is no clear path for advancing tax legislation, including the Affordable Housing Credit Improvement Act (AHCIA), this year. While a “lame duck” bipartisan tax deal is still technically possible, such a plan is yet to coalesce, particularly as Congress will need to focus on issues like finalizing appropriations bills in the lame duck session after the election. Of course, tax changes have hitched a ride on appropriations bills in the past, but such an outcome is not common, and odds are long for other vehicles that could carry tax legislation, including a reconciliation bill.
ACTION encourages advocates to use this time while Congress is home campaigning to reach out to Members and ask that they cosponsor the AHCIA. ACTION has just updated its In-District Advocacy Guide to help affordable housing advocates secure support for the Housing Credit and the AHCIA. It details steps advocates can take to build support for the Housing Credit during the recess — everything from a quick post on social media if you have only a few minutes to an op-ed if you have an hour or two. If you have even more time, we especially encourage ACTION members to contact your Members of Congress’ offices to invite them to view the Housing Credit in action in their communities, including groundbreakings, ribbon cuttings, or site visits. The ACTION Campaign has a number of advocacy materials to help support your outreach, including National, State, and Congressional District Fact Sheets, updated statewide ACTION Campaign member lists, sample emails for outreach, as well as detailed information about the legislation in our Advocacy Toolkit.
Another way advocates can raise the profile 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 is 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.
Other Housing Credit Legislation Introduced in Congress
On August 7, Sens. Ruben Gallego (D-AZ) and Mike Rounds (R-SD) introduced the Affordable Housing Credit Carryback Act (S. 5366), which would allow Housing Credit investors to apply Housing Credits against their tax liability for any of the five years prior to the year they received the Housing Credits. This is one of several consensus proposals that ACTION is supporting as part of a broader effort to increase investor demand. Back in May, Reps. Mike Carey (R-OH-15) and Jimmy Panetta (D-CA-19) introduced an identical House version of this bill.
On August 6, Reps. Dwight Evans (D-PA-03) and Brian Fitzpatrick (R-PA-01), along with Sens. Amy Klobuchar (D-MN) and Kirsten Gillibrand (D-NY), reintroduced the Visitable Inclusive Tax Credits for Accessible Living (VITAL) Act (H.R. 10049 / S. 5285). This bill would provide a basis boost of up to 50 percent for Housing Credit units that are built to accessibility standards if at least half the units in a property will be accessible. It would also require that states mandate that at least 40 percent of new Housing Credit units over any three-year period be built to accessibility standards. ACTION has no position on this bill.
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
HUD Publishes Formula Program Allocations for FY26
On August 3, HUD published amounts for full-year Fiscal Year 2026 (FY26) allocations for its formula programs. Some of these programs, including HOME, the Housing Trust Fund, and CDBG, are used as critical sources of gap financing for Housing Credit properties. The amounts for each program are roughly flat or increased compared to their respective FY25 numbers.
ACTION Membership
In August, the ACTION Campaign welcomed seven new members to the coalition!
Please join us in welcoming the following new members:
- Birdsong Housing Partners, Florida
- Family Housing Resources, Inc., Arizona
- Arizona Community Foundation, Arizona
- Trellis, Arizona
- Phoenix IDA, Arizona
- Advocates for Human Potential, Arizona
- Pavilion Construction, Oregon
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
- An August 19 blog post by ACTION member Novogradac & Co., an accounting firm, reveals that recent data suggests that market-rate multifamily construction will slow in 2027, but that affordable housing construction will increase in 2027. Novogradac analyzed recent data from Yardi, a real estate software company; the Urban Institute, a think tank; and Harvard’s Joint Center for Housing Studies. The data suggests that the Housing Credit, which has financed over 20 percent of all new multifamily rental properties in America since 1987, will be partially responsible for this increase, especially since it was expanded last year. The article notes that the data indicates that the Housing Credit is a relatively recession-proof program, since Housing Credit activity remained comparatively steady during the Great Recession compared to market-rate activity.
- This month, the Federal Housing Finance Agency published the Federal Home Loan Banks 2025 Mission Activities Report. This report found that the FHLBs’ primary financing program for affordable housing, the Affordable Housing Program (AHP), was used to help finance 212 Housing Credit properties in 2025. These 212 properties comprise 41 percent of all properties receiving AHP funding.
Housing Credit in the News
- A recent article by KVUE spotlights a new Housing Credit property in Austin, TX, that will provide homes for survivors of domestic violence, child abuse, and human trafficking.
- An August 3 article in the Novogradac Journal of Tax Credits highlights California’s proactive implementation of the historic expansion of Housing Credit resources last year. California’s aggressive strategy led to almost twice as many affordable units financed in the Golden State by the 4 Percent Credit in 2025 than had been in 2024 and 2023. Further, California is on pace to finance over 20 percent more 4 Percent Credit units this year than in 2025. This article is the latest in a growing trend: as ACTION covered last month, Texas just made its largest-ever allocation of Housing Credits.
- An August 6 article in Affordable Housing Finance covers the proposed changes to the Community Reinvestment Act It contains quotes from several ACTION members expressing initial concern about how the proposal could impact the Housing Credit.
- A trio of August articles in Axios, the Raleigh News & Observer, and CBS 17 cover the anticipated conversion of the former Durham, NC, police department headquarters into affordable housing financed with the Housing Credit.
- An August 11 article in the Miami Herald covers the upcoming conversion of a former public school into over 360 units of affordable housing financed by the Housing Credit. After two schools consolidated, a portion of one school’s campus will be converted into affordable housing, with a preference for eligible teachers and school district employees.
