Housing Credit Turns 40!
The Housing Credit turned 40 in October! The Housing Credit was signed into law by President Ronald Reagan on October 22, 1986, as part of the Tax Reform Act of 1986. Since then, the Housing Credit has become the number one tool for financing the construction and preservation of affordable rental housing. Check out ACTION’s blog post with more information about the program’s accomplishments over the past four decades!
ACTION just published a new national fact sheet with the newest Housing Credit impact data. As the updated data in the fact sheet shows, the program has financed approximately 4.28 million affordable units, served 9.97 million households; supports 7.2 million jobs per year; generated $293 billion in federal, state, and local tax revenues; and generated $815 billion in wages and business income. ACTION’s updated state and Congressional district maps will be rolled out in the coming months, so stay tuned!
For even more on the history, impact, and success of the Housing Credit, check out this video from the Affordable Housing Tax Credit Coalition (a member of ACTION’s Steering Committee), these two articles in the Novogradac Journal of Tax Credits, this Novogradac blog post, and this blog post by ACTION co-chair Enterprise Community Partners.
CRA Update
ACTION Submits CRA Comments
On October 13, the ACTION Steering Committee submitted a comment letter to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), two of the three federal banking regulators, responding to their Notice of Proposed Rulemaking (NPR) that would change their current rules that implement the Community Reinvestment Act (CRA).
As explained in recent ACTION newsletters, the NPR would, among other things, revise the asset thresholds that determine how CRA is applied to different banks based on the amount of their assets, such that fewer banks would have investment requirements, and cap the amount of grant money going to overhead that banks give to local nonprofits at 15 percent. CRA drives the overwhelming majority of Housing Credit investments — about 80 percent per year as of 2024.
ACTION’s letter raised concerns about how this proposed change would reduce competition among investors, potentially leading to lower pricing and less investment overall in the Housing Credit. This is particularly problematic because it undercuts the historic wins achieved in Congress in the last two years: the largest permanent expansion of the Housing Credit — the lowering of the bond financing threshold and the 12 percent increase in the 9 Percent program — and the increase in the Public Welfare Investment cap. ACTION urged the regulators to maintain the current bank asset thresholds, or at least maintain the lowest possible threshold for large banks while adopting policies to further strengthen the Housing Credit in all types of communities across the country.
ACTION appreciates the advocacy of everyone who submitted comment letters to the regulators. ACTION will continue to engage with the regulators and provide updates as needed.
Legislative State-of-Play
Midterm Elections Tomorrow; Historic Retirements of Cosponsors
While we do not know the outcome of tomorrow’s midterm elections as of this writing, one thing we do know is that the 120th Congress will look different than the 119th has. Approximately one in five members of the current Congress did not seek reelection to their seat for the 120th. Still more could lose their elections after the dust has settled.
That means many of the AHCIA’s current supporters will not be coming back next year. In the House, more than two dozen AHCIA cosponsors will not be returning in January. In the Senate, at least three will not be, and more likely at least five. This means that Housing Credit advocates will have to educate a significant number of new Representatives and Senators in the coming months, as well as many new congressional staff, on the importance of the Housing Credit.
Prospects Slim for Lame Duck Tax Activity
While Republicans currently hold majorities in both the House and Senate, the election outcomes could impact the likelihood of tax activity during the lame duck period after the election. If Republicans do not maintain their majorities, they could attempt another party-line reconciliation package before they Democrats take control of Congress. However, despite having majorities in both chambers in the current Congress, Washington insiders expect Republicans could have attendance challenges after the election, with some Republicans who lost election possibly not always being present in Washington to vote. Moreover, Republicans would need to both pass a budget resolution and a reconciliation bill to usher through additional party-line legislation in a very limited timeframe in which they will also need to deal with Fiscal Year 2027 (FY27) appropriations and other must-pass legislation. Alternatively, Republicans could decide to work with Democrats to pass a bipartisan tax package, which could again include Housing Credit provisions, but would require 60 votes in the Senate. Either way, ACTION thinks that passage of another tax bill before the end of the year is very unlikely.
Spread the Word: Help ACTION by Creating Video Testimonials
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 September 30, Sen. Sheldon Whitehouse (D-RI) reintroduced the Affordable Housing Construction Act (S. 5625). This bill would make several significant changes to the Housing Credit program. It would triple the annual allocations of the 9 Percent Credit, make the temporary 12.5 percent increase to the Housing Credit from 2018 permanent, lower the Private Activity Bond threshold down to 15 percent from 25 percent, and extend the required affordability period to 50 years from 30, among other things. ACTION has no position on this bill.
On October 22, Rep. Jodey Arrington (R-TX-19) introduced the LIHTC Security Act (H.R. 10856). This bill would require states to ensure that no undocumented immigrants live in any Housing Credit units within their state, or else get their annual Housing Credit authority reduced by five percent for the year. As of this writing, ACTION does not have an established position on this legislation.
Housing Credit Raised During Senate Banking Committee Hearing
During an October 1 nominations hearing in the Senate Banking, Housing, and Urban Affairs Committee, Sen. Mike Crapo (R-ID) touted his longstanding support for the Housing Credit. One of the HUD nominees, Matt Jones, who was under consideration to become Assistant HUD Secretary, responded that, if confirmed, he would work with his colleagues within HUD and at the Treasury Department to advance affordable multifamily housing together, including via the use of the Housing Credit. Senator Crapo also chairs the Senate Finance Committee and helped spearhead the historic expansion of the Housing Credit last 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 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 Establishes Difficult Development Areas and Qualified Census Tracts for 2027
On October 6, HUD published designations for 2027 Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs) in the Federal Register. Housing Credit properties built in DDAs or QCTs can receive a basis boost of up to 30 percent. The DDAs and QCTs go into effect for Housing Credit allocations made after December 31, 2026, or for Housing Bond-financed properties with bonds issued after December 31, 2026, and are placed in service after December 31, 2026. An October 8 blog post by ACTION member Novogradac & Co. undertakes a deeper analysis of the changes.
Trump Signs Executive Order on Housing
On October 22, President Trump signed an executive order on housing. While the executive order primarily focuses on single-family homeownership rather than affordable rental housing, the accompanying White House fact sheet highlights the historic expansion of Housing Credit resources last year (though it conflates FHFA’s decision to increase the Housing Credit investment limit for the Government Sponsored Enterprises with the statutory increase in Credit authority provided by the One Big Beautiful Bill Act).
Treasury Publishes Proposed Rule on Institutional Investor Ban
On October 23, the Treasury Department published a proposed rule implementing the ban on large institutional investors owning more than 350 homes that was enacted in the 21st Century ROAD to Housing Act earlier this year. As ACTION has previously reported, single-family rental housing financed with the Housing Credit should not be impacted by the limitation on investor purchases because such housing falls under the Act’s exemptions, and House housing leaders made floor statements clarifying Congressional intent that the limitation does not apply to the Housing Credit. ACTION is reviewing the proposed rule to ensure that it aligns with that congressional intent. Comments are due via the instructions in the link above by November 23.
ACTION Membership
In October, the ACTION Campaign welcomed two new members to the coalition!
Please join us in welcoming the following new members:
- Project PRC Corporation, Texas
- Garcia Development Group, 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
- An October 6 report by the Federal Reserve Bank of Atlanta analyzes patterns of Housing Credit use across six states in the Southeast from 2008-2024. During that time period, some 2,700 Housing Credit properties were financed, containing around 240,000 units. It finds that, per 100,000 residents, there are fewer Housing Credit units in metro areas, more Housing Credit units in micropolitan areas, and more Housing Credit units in rural areas than the nationwide average. Additionally, Georgia produced the most Housing Credit properties, while Florida produced the most Housing Credit units across these states. Unsurprisingly, states with smaller populations had the most Housing Credit units per capita. Alabama produced both the fewest Housing Credit properties and units per 100,000 residents; Mississippi had the fewest number of overall renters (of any kind), but had the highest number of Housing Credit units per 1,000 renters. Mid-sized metro areas have more Housing Credit units per 1,000 renters than larger and smaller metro areas. Some micropolitan areas produce more Housing Credit units per 1,000 renters or per 100,000 residents than metro areas.
- An October 6 blog post by Novogradac & Co. analyzes the results of the 2026 Current Population Survey (CPS), which is published by the Census Bureau and contains data from 2025. The CPS, which contains income and poverty data, reveals that the official poverty rate in 2025 is down 0.5 percentage points from 2024, and that real median household income is up 2.6 percent from 2024, a record high. While these are both unquestionably good outcomes, Novogradac’s analysis finds that housing affordability challenges remain as costs continue to rise and constraints in affordable housing supply continue to exist. The CPS is used to determine Qualified Census Tract basis boosts for the Housing Credit, but income limits are determined by a different Census Bureau study, the American Community Survey. The blog post highlights the critical importance of the Housing Credit for financing affordable housing.
Housing Credit in the News
- A September 29 blog post by the Urban Institute warns that the proposed CRA changes could result in weakened community development activity in low- and moderate-income communities.
- An October 2 article in Tax Credit Advisor highlights the potential benefit for the Housing Credit stemming from a provision in ROAD that allows the Community Development Block Grant (CDBG) to be used for new development of affordable homes. Prior to ROAD’s enactment, CDBG was primarily used for acquisition and rehabilitation of older properties, rather than new construction. TCA analyzed CDBG funding from FY26 and forecasts that the change to CDBG law in ROAD could allow for up to $660 million in new gap financing for the Housing Credit nationwide in FY27. While TCA reports that some CDBG recipients are already working to implement this positive change, the article cautions that the distribution of this money will not be even across the country (because of how the CDBG formula works), and that this new CDBG funding will likely not replace existing major sources of gap financing. The article further cautions that the impact and availability of this additional CDBG money is contingent upon forthcoming implementation guidance from HUD, that CDBG can be used for a variety of other projects unrelated to housing, and that CDBG appropriations are not guaranteed to remain predictable every year.
- An article in the October issue of the Novogradac Journal of Tax Credits takes a deep dive into the legislative history of the Housing Credit’s creation in the 1980s.
- Another article in the October issue of the Novogradac Journal of Tax Credits highlights the uniqueness and impacts of the Housing Credit. The article explains that the Housing Credit has been successful because of features built into the program. It is deliberately flexible, encourages innovation, and its public-private partnership nature has allowed the Housing Credit to remain resilient in different states and geographies across time and throughout different economic circumstances. Since it’s a tax credit, it essentially has a reliable funding stream, while it maintains state control and local input. The Housing Credit’s success can be attributed to the fact that it is adaptable but durable.
- An October 12 article in Bloomberg Government takes a deep dive into the proposed CRA rule.
- An October 13 article in McKnight’s Senior Living notes that a variety of advocates for senior living have argued against the new CRA proposed rule.
- October 13 articles in Affordable Housing Finance, Housing Wire, Bloomberg Government, and WRE News cover a CRA comment letter led by the National Association of Affordable Housing Lenders, an ACTION Campaign Steering Committee member, signed by over 475 organizations (including numerous other ACTION members) urging the banking regulators to protect community development activities as they work on the new CRA proposed rule.
- An October 13 blog post by the Urban Institute offers a counter-proposal to the new CRA proposed rule that aims to better serve low- and moderate-income communities.
- An October 13 article in Affordable Housing Finance features an interview with the executive director of ACTION co-chair NCSHA. Among other things, the article notes that state Housing Credit agencies are seeing significant increases in applications, in part due to the historic expansion of Housing Credit resources last year. He predicts that Housing Credit allocations this year could top $2 billion, roughly four times more than were allocated in 2022. This fact is the latest in a growing trend about record allocations that ACTION has covered in recent months.
- An October 16 newsletter by ACTION co-chair NCSHA covers the history of the Housing Credit over the past 40 years and the role of states in administering the Housing Credit.
- An October 19 article in the Contra Costa (CA) Herald spotlights the groundbreaking of a new Housing Credit property in Bay Point, CA, alongside the first new county library to open in that area in 50 years. The property will provide 167 affordable units that are expected to house around 1,000 people, adjacent to the community’s brand-new library. Both are expected to open in early 2029.
- An October 19 article in Globe St. notes that the CRA proposed rule could lead to reduced affordable housing investment and development in New York.
- An October 22 blog post by ACTION co-chair Enterprise Community Partners highlights how the Housing Credit became the top tool for financing affordable housing and the impacts that it has had over the past 40 years.
