H.R. 9281: Decent, Affordable, Safe Housing for All Act

The bill makes a broad set of changes aimed at increasing housing supply, expanding rental assistance, and giving tax relief to renters and homebuyers. It combines federal grants, tax credits, and rule changes intended to support affordable housing construction, help people pay for housing, and encourage more long-term affordable units.

Housing assistance and grant programs

The bill creates or expands several housing programs, including:

• Homeless rental vouchers and supportive services to help people experiencing homelessness find and keep housing.

• Permanent homelessness grants for states and other housing providers.

• Capacity-building grants for states and housing agencies to help them administer housing programs and plan more development.

• Land acquisition and affordable housing construction funding to support the creation of new housing units.

• Modular-construction grants and incentives for pro-housing zoning changes, intended to make it easier and faster to build housing.

The bill also requires states to meet certain progress benchmarks. If they do not, they could face penalties or reduced support under the bill’s framework.

Changes to low-income housing tax credits

The bill makes several changes to the Low-Income Housing Tax Credit (LIHTC) program, which is a major federal incentive for affordable housing development. It would:

• Revise the formula used to calculate credits.

• Expand credits for projects serving extremely low-income households, rural areas, and Indian areas.

• Expand credits tied to supportive services in some projects.

• Repeal the “qualified contract” option, which affects how long some projects must remain affordable.

• Clarify tenant or purchaser rights in certain housing transactions.

• Prohibit local approval or local financial contribution requirements from being used as LIHTC selection criteria.

The bill also bars local official approval or contribution requirements from being considered in some LIHTC decisions.

New renter tax credit framework

The bill creates a state-run renters’ credit system. Under this framework, states would have to adopt public allocation plans for the credits. Landlords could receive credits or payments if they lower rents under qualifying agreements. Those agreements would also include tenant protections, such as limits on unjust eviction, and would require fair-housing compliance, reporting, and oversight by IRS and HUD.

In addition, the bill creates a middle-income housing tax credit to support housing that is affordable to households that do not qualify for the lowest-income programs but still face high housing costs.

Middle-income housing tax credit

The bill creates one or more middle-income housing credit programs with rules for:

• Which buildings and units qualify.

• Rent and income limits for tenants.

• Annual state allocation caps and overall credit limits.

• Set-asides for rural projects and nonprofit projects.

• Long-term affordability commitments, reporting requirements, and anti-abuse rules.

It also provides special treatment for some multi-building projects and allows certain waivers or elections. Some provisions would apply to projects started after December 31, 2025.

Neighborhood Homes Credit

The bill creates a Neighborhood Homes Credit to support the construction or rehabilitation of affordable homes in low-income areas and disaster-affected areas. The credit would have state allocation caps, income and price limits, federal oversight, and reporting requirements. If a qualifying home is sold too soon, the credit could be recaptured. The credit would also be eligible for use under certain tax rules, including the alternative minimum tax and general business credit rules.

First-time homebuyer tax credit

The bill creates a new refundable tax credit for first-time homebuyers. The credit would equal 20% of the purchase price, up to $15,000, subject to income and home price limits. The credit would have recapture rules if the home is sold too early, and a mortgage lender could potentially receive the credit on the buyer’s behalf. The credit would apply to tax years after 2026.

Changes affecting homeowners and loss deductions

The bill also changes several tax rules for homeowners. It would:

• Remove limits on deductions for losses from a principal residence, subject to a $100,000 cap and income phaseout.

• Coordinate those loss deductions with existing capital loss rules and carryforwards.

• Repeal the limitation on personal casualty losses.

• Make the exclusion for forgiven qualified principal residence debt permanent after 2025.

Study and timing

The bill directs a study on converting vacant commercial property into housing. It also staggers the effective dates of different provisions, with some taking effect upon enactment and others beginning in 2026 or 2027.

Relevant Companies

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