Senate Makes Huge Step Forward in Increasing Affordable Housing

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA, H.R. 1), which was passed by Congress the previous day. The bill provides a permanent 12 percent increase to the 9 Percent Housing Credit and permanently lowers the 50 percent test for bond-financed 4 Percent Credit properties. This is the biggest Housing Credit expansion since 2000, and is estimated to have nearly 10 times the impact of the minimum floor for 4 Percent Credits enacted in 2020.

The final bill differs from the version the House passed in May, which included those two provisions on a temporary basis only, rather than permanently. The final OBBBA does not include provisions from the House-passed version that would have created four-year, 30 percent basis boosts for Housing Credit properties located in rural and tribal communities. Senator Jacky Rosen (D-NV), a cosponsor of the Affordable Housing Credit Improvement Act (AHCIA), filed an amendment that would have reinstated the 30 percent rural basis boost, but it, along with the vast majority of amendments filed by Senators, did not receive a vote.

The law also contains a permanent extension of 100 percent bonus depreciation for qualified properties, which has the potential to help boost pricing due to its impact on investors’ yields.

The law does not contain any changes to the tax-exempt status of private activity bonds and does not contain the “Super BEAT” provision included in earlier versions of the bill, which would have likely caused problems for Housing Credit investors based outside the United States.

The two Housing Credit provisions enacted in the OBBBA have their genesis in the AHCIA and would not have been successfully enacted were it not for the support ACTION members have achieved for the underlying standalone bill. The AHCIA includes many other critical provisions that ACTION is still seeking to see passed. We will continue our work in support of all aspects of the AHCIA, taking advantage of each and every opportunity we have along the way, and will continue to call on you to advocate for the AHCIA—more details on cosponsorship below!

Advocacy Resources

The below fact sheets demonstrate the effects of the bill on each state and territory. The fact sheets include the benefits for each state in terms of additional rental homes, jobs, wages and business income, and tax revenue generated.