S. 4773: Decent, Affordable, Safe Housing for All Act

This bill combines a set of housing programs, tax credits, and reporting requirements aimed at increasing the supply of affordable housing and helping certain households pay for housing.

Housing assistance and supportive services

The bill would provide rental vouchers for homeless households and households at risk of becoming homeless. It also includes funding for supportive services, such as help with housing stability, as well as money for capacity-building and administrative support. Anti-discrimination rules would apply to these programs.

Affordable housing development and preservation

The bill would authorize major funding for a Housing Trust Fund and for state administrative costs related to affordable housing development. It also directs funding toward:

• Affordable housing construction and preservation
• Modular and other alternative construction methods
• Pro-housing zoning and planning efforts
• Rural housing reinvestment and preservation programs
• Technical improvements and program administration

It would require reporting, limit how some funds may be used, and create a preservation plan and an advisory committee to help oversee these efforts.

Changes to federal and state tax credits for housing

The bill creates or expands several housing-related tax credit programs:

• Low-Income Housing Tax Credit (LIHTC) changes: It would increase state credit limits and expand eligibility for certain projects, including those serving extremely low-income households, Indian communities, rural areas, bond-financed developments, and projects that include supportive services.
• Renters credit: It would create a new state-allocated tax credit for low-income renters, with eligibility limits, set-asides for nonprofit and rural projects, tenant protections, compliance reporting, and rules for reserve and reallocation of unused credits. The credit amounts would be taxable.
• Middle-income housing tax credit: It would create a separate tax credit for middle-income housing, with a credit period of 15 years and different minimum credit rates depending on whether the building is unsubsidized or federally subsidized. The bill includes special rules for rehabilitation projects and affordability limits.
• Neighborhood homes tax credit: It would create a tax credit for development and rehabilitation in distressed neighborhoods, including both new buildings and owner-occupied home rehabilitation. The credit would apply to projects placed in service after December 31, 2025.

Rules attached to housing tax credits

The bill includes a number of conditions and restrictions on how the credits may be used. These include affordability requirements, long-term recorded commitments to keep units affordable, reporting to state agencies, compliance monitoring, rural project preferences in some cases, and limits to ensure credit allocations are feasible. It also removes some existing rules that allowed certain affordable housing projects to exit the program through a “qualified contract” process, and it clarifies purchase rights in some situations.

For the LIHTC program, the bill would also bar local governments from using approval decisions or required contributions as a condition for receiving certain credits.

Homeownership tax benefits

The bill would create a refundable first-time homebuyer credit equal to 20% of the purchase price of a principal residence, up to $15,000. The credit would have income, home price, age, residency, and filing-status limits. It would include rules for recapture if the home is sold too soon, options to transfer the credit through mortgage lenders, reporting requirements, and an online portal to administer the program.

It would also create a tax exclusion for certain losses on a principal residence in the United States, up to $100,000 for most filers and $50,000 for separate filers, with limits for high-income taxpayers and periods of nonqualified use. In addition, it would make the exclusion for mortgage debt discharge permanent and remove the current limit on casualty-loss deductions for homes.

Other studies and administrative provisions

The bill requires a study of how commercial buildings might be converted to housing. It also includes planning, technical assistance, reporting, and oversight provisions for state agencies that administer these housing programs.

Effective dates and implementation

Some provisions would apply immediately after enactment, while others would begin for tax years after 2025 or for properties placed in service after December 31, 2025. The bill also includes reserve and reallocation rules for unused credits and various compliance requirements for participating projects and taxpayers.

Relevant Companies

• None found