I 

118TH CONGRESS 

2D SESSION H. R. 9380 

To amend the Internal Revenue Code of 1986 to provide a credit for working 

families housing development, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 16, 2024 

Mr. RYAN introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, and Energy and Commerce, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit for working families housing development, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Working Families 

5 Housing Tax Credit Act’’. 

6 SEC. 2. SENSE OF CONGRESS RELATING TO THE WORKING 

7 FAMILIES HOUSING TAX CREDIT. 

8 It is the sense of Congress that— 


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1 (1) the working family housing tax credit under 

2 section 42A of the Internal Revenue Code of 1986 

3 is a critically important Federal Government policy 

4 tool to encourage the production of quality housing 

5 for our teachers, firefighters, police officers, vet6 erans, and all hard-working Americans; and 

7 (2) Congress should further improve and en8 hance the working families housing tax credit by 

9 passing pro-housing legislation. 

10 SEC. 3. WORKING FAMILIES HOUSING TAX CREDIT. 

11 (a) IN GENERAL.—Subpart D of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of 

13 1986 is amended by inserting after section 42 the fol14 lowing new section: 

15 ‘‘SEC. 42A. WORKING FAMILIES HOUSING CREDIT. 

16 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

17 amount of the working families housing credit determined 

18 under this section for any taxable year in the credit period 

19 shall be an amount equal to— 

20 ‘‘(1) the applicable percentage, of 

21 ‘‘(2) the qualified basis of each qualified work22 ing families building. 

23 ‘‘(b) APPLICABLE PERCENTAGE.— 

24 ‘‘(1) DETERMINATION OF APPLICABLE PER25 CENTAGE.—For purposes of this section— 


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1 ‘‘(A) IN GENERAL.—The term ‘applicable 

2 percentage’ means, with respect to any building, 

3 the appropriate percentage prescribed by the 

4 Secretary for the earlier of— 

5 ‘‘(i) the month in which such building 

6 is placed in service, or 

7 ‘‘(ii) at the election of the taxpayer, 

8 the month in which the taxpayer and the 

9 housing credit agency enter into an agree10 ment with respect to such building (which 

11 is binding on such agency, the taxpayer, 

12 and all successors in interest) as to the 

13 housing credit dollar amount to be allo14 cated to such building. 

15 A month may be elected under clause (ii) only 

16 if the election is made not later than the 5th 

17 day after the close of such month. Such an elec18 tion, once made, shall be irrevocable. 

19 ‘‘(B) METHOD OF PRESCRIBING PERCENT20 AGES.—The percentages prescribed by the Sec21 retary for any month shall be percentages which 

22 will yield over a 15-year period amounts of 

23 credit under subsection (a) which have a 

24 present value equal to— 


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1 ‘‘(i) 50 percent of the qualified basis 

2 of a new building, and 

3 ‘‘(ii) 60 percent of the qualified basis 

4 of a building not described in clause (i). 

5 ‘‘(C) METHOD OF DISCOUNTING.—The 

6 present value under subparagraph (B) shall be 

7 determined— 

8 ‘‘(i) as of the last day of the 1st year 

9 of the 15-year period referred to in sub10 paragraph (B), 

11 ‘‘(ii) by using a discount rate equal to 

12 72 percent of the average of the annual 

13 Federal mid-term rate and the annual 

14 Federal long-term rate applicable under 

15 section 1274(d)(1) to the month applicable 

16 under clause (i) or (ii) of subparagraph 

17 (A) and compounded annually, and 

18 ‘‘(iii) by assuming that the credit al19 lowable under this section for any year is 

20 received on the last day of such year. 

21 ‘‘(2) MINIMUM CREDIT RATE.— 

22 ‘‘(A) IN GENERAL.—The applicable per23 centage for any building which is not Federally 

24 subsidized for the taxable year shall not be less 

25 than 5 percent. 


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1 ‘‘(B) MINIMUM CREDIT RATE FOR FEDER2 ALLY SUBSIDIZED BUILDINGS.—In the case of 

3 any building to which subparagraph (A) does 

4 not apply, except as provided in paragraph (3), 

5 the applicable percentage shall not be less than 

6 2 percent. 

7 ‘‘(3) EXCEPTION FOR CERTAIN FEDERALLY

8 SUBSIDIZED BUILDINGS.—In the case of any build9 ing to which paragraph (2)(A) does not apply, the 

10 applicable percentage is zero unless— 

11 ‘‘(A) a credit is allowed under section 42 

12 with respect to such building for the taxable 

13 year, and 

14 ‘‘(B) such building is financed by tax-ex15 empt bonds as described in section 42(h)(4). 

16 ‘‘(4) CROSS REFERENCES.— 

17 ‘‘(A) For treatment of certain rehabilita18 tion expenditures as separate new buildings, see 

19 subsection (e). 

20 ‘‘(B) For determination of applicable per21 centage for increases in qualified basis after the 

22 1st year of the credit period, see subsection 

23 (f)(3). 

24 ‘‘(C) For authority of housing credit agen25 cy to limit applicable percentage and qualified 


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1 basis which may be taken into account under 

2 this section with respect to any building, see 

3 subsection (h)(6). 

4 ‘‘(c) QUALIFIED BASIS; QUALIFIED WORKING FAMI5 LIES BUILDING.—For purposes of this section— 

6 ‘‘(1) QUALIFIED BASIS.— 

7 ‘‘(A) DETERMINATION.—The qualified 

8 basis of any qualified working families building 

9 for any taxable year is an amount equal to— 

10 ‘‘(i) the applicable fraction (deter11 mined as of the close of such taxable year) 

12 of 

13 ‘‘(ii) the eligible basis of such building 

14 (determined under subsection (d)). 

15 ‘‘(B) APPLICABLE FRACTION.—For pur16 poses of subparagraph (A), the term ‘applicable 

17 fraction’ means the smaller of the unit fraction 

18 or the floor space fraction. 

19 ‘‘(C) UNIT FRACTION.—For purposes of 

20 subparagraph (B), the term ‘unit fraction’ 

21 means the fraction— 

22 ‘‘(i) the numerator of which is the 

23 number of working families units in the 

24 building, and 


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1 ‘‘(ii) the denominator of which is the 

2 number of residential rental units (whether 

3 or not occupied) in such building. 

4 ‘‘(D) FLOOR SPACE FRACTION.—For pur5 poses of subparagraph (B), the term ‘floor 

6 space fraction’ means the fraction— 

7 ‘‘(i) the numerator of which is the 

8 total floor space of the working families 

9 units in such building, and 

10 ‘‘(ii) the denominator of which is the 

11 total floor space of the residential rental 

12 units (whether or not occupied) in such 

13 building. 

14 ‘‘(2) QUALIFIED WORKING FAMILIES BUILD15 ING.—The term ‘qualified working families building’ 

16 means any building which is part of a qualified 

17 working families housing project at all times during 

18 the period— 

19 ‘‘(A) beginning on the 1st day in the credit 

20 period on which such building is part of such a 

21 project, and 

22 ‘‘(B) ending on the last day of the credit 

23 period with respect to such building. 

24 ‘‘(d) ELIGIBLE BASIS.—For purposes of this sec25 tion— 


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1 ‘‘(1) NEW BUILDINGS.—The eligible basis of a 

2 new building is its adjusted basis as of the close of 

3 the 1st taxable year of the credit period. 

4 ‘‘(2) EXISTING BUILDINGS.— 

5 ‘‘(A) IN GENERAL.—The eligible basis of 

6 an existing building is— 

7 ‘‘(i) in the case of a building which 

8 meets the requirements of subparagraph 

9 (B), its adjusted basis as of the close of 

10 the 1st taxable year of the credit period, 

11 and 

12 ‘‘(ii) zero in any other case. 

13 ‘‘(B) REQUIREMENTS.—A building meets 

14 the requirements of this subparagraph if— 

15 ‘‘(i) the building is acquired by pur16 chase (as defined in section 179(d)(2)), 

17 ‘‘(ii) there is a period of at least 10 

18 years between the date of its acquisition by 

19 the taxpayer and the date the building was 

20 last placed in service, 

21 ‘‘(iii) the building was not previously 

22 placed in service by the taxpayer or by any 

23 person who was a related person with re24 spect to the taxpayer as of the time pre25 viously placed in service, and 


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1 ‘‘(iv) except as provided in subsection 

2 (f)(5), a credit is allowable under sub3 section (a) by reason of subsection (e) with 

4 respect to the building. 

5 ‘‘(C) ADJUSTED BASIS.—For purposes of 

6 subparagraph (A), the adjusted basis of any 

7 building shall not include so much of the basis 

8 of such building as is determined by reference 

9 to the basis of other property held at any time 

10 by the person acquiring the building. 

11 ‘‘(D) SPECIAL RULES.— 

12 ‘‘(i) SPECIAL RULES FOR CERTAIN

13 TRANSFERS.—For purposes of determining 

14 under subparagraph (B)(ii) when a build15 ing was last placed in service, there shall 

16 not be taken into account any placement in 

17 service— 

18 ‘‘(I) in connection with the acqui19 sition of the building in a transaction 

20 in which the basis of the building in 

21 the hands of the person acquiring it is 

22 determined in whole or in part by ref23 erence to the adjusted basis of such 

24 building in the hands of the person 

25 from whom acquired, 


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1 ‘‘(II) by a person whose basis in 

2 such building is determined under sec3 tion 1014(a) (relating to property ac4 quired from a decedent), 

5 ‘‘(III) by any governmental unit 

6 or qualified nonprofit organization if 

7 the requirements of subparagraph 

8 (B)(ii) are met with respect to the 

9 placement in service by such unit or 

10 organization and all the income from 

11 such property is exempt from Federal 

12 income taxation, 

13 ‘‘(IV) by any person who ac14 quired such building by foreclosure 

15 (or by instrument in lieu of fore16 closure) of any purchase-money secu17 rity interest held by such person if the 

18 requirements of subparagraph (B)(ii) 

19 are met with respect to the placement 

20 in service by such person and such 

21 building is resold within 12 months 

22 after the date such building is placed 

23 in service by such person after such 

24 foreclosure, or 


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1 ‘‘(V) of a single-family residence 

2 by any individual who owned and used 

3 such residence for no other purpose 

4 than as his principal residence. 

5 ‘‘(ii) RELATED PERSON.—For pur6 poses of subparagraph (B)(iii), a person 

7 (hereinafter in this subclause referred to as 

8 the ‘related person’) is related to any per9 son if the related person bears a relation10 ship to such person specified in section 

11 267(b) or 707(b)(1), or the related person 

12 and such person are engaged in trades or 

13 businesses under common control (within 

14 the meaning of subsections (a) and (b) of 

15 section 52). 

16 ‘‘(3) SPECIAL RULES RELATING TO DETER17 MINATION OF ADJUSTED BASIS.—For purposes of 

18 this subsection— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (B), the adjusted basis of any 

21 building shall be determined without regard to 

22 the adjusted basis of any property which is not 

23 residential rental property. 

24 ‘‘(B) BASIS OF PROPERTY IN COMMON

25 AREAS, ETC., INCLUDED.— 


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1 ‘‘(i) IN GENERAL.—Except as pro2 vided in clause (ii), the adjusted basis of 

3 any building shall be determined by taking 

4 into account the adjusted basis of property 

5 (of a character subject to the allowance for 

6 depreciation) used in common areas or 

7 provided as comparable amenities to all 

8 residential rental units in such building. 

9 ‘‘(ii) SPECIAL RULE.—In the case of 

10 any building for which the low-income 

11 housing tax credit is allowable under sec12 tion 42, the adjusted basis of the building 

13 under this section shall be determined 

14 without regard to property used in com15 mon areas or provided as comparable 

16 amenities to all residential rental units in 

17 such building. 

18 ‘‘(C) NO REDUCTION FOR DEPRECIA19 TION.—The adjusted basis of any building shall 

20 be determined without regard to paragraphs (2) 

21 and (3) of section 1016(a). 

22 ‘‘(4) SPECIAL RULES FOR DETERMINING ELIGI23 BLE BASIS.— 

24 ‘‘(A) FEDERAL GRANTS NOT TAKEN INTO

25 ACCOUNT IN DETERMINING ELIGIBLE BASIS.— 


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1 The eligible basis of a building shall not include 

2 any costs financed with the proceeds of a Fed3 erally funded grant. 

4 ‘‘(B) INCREASE IN CREDIT FOR BUILDINGS

5 IN HIGH COST AREAS.— 

6 ‘‘(i) IN GENERAL.—In the case of any 

7 building located in a difficult development 

8 area which is designated for purposes of 

9 this subparagraph— 

10 ‘‘(I) in the case of a new build11 ing, the eligible basis of such building 

12 shall be 130 percent of such basis de13 termined without regard to this sub14 paragraph, and 

15 ‘‘(II) in the case of an existing 

16 building, the rehabilitation expendi17 tures taken into account under sub18 section (e) shall be 130 percent of 

19 such expenditures determined without 

20 regard to this subparagraph. 

21 ‘‘(ii) LIMITATION.—Clause (i) shall 

22 not apply to any building if paragraph (1) 

23 of subsection (h) does not apply to any 

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1 ing by reason of paragraph (9) of such 

2 subsection. 

3 ‘‘(iii) DIFFICULT DEVELOPMENT

4 AREAS.— 

5 ‘‘(I) IN GENERAL.—The term 

6 ‘difficult development areas’ means 

7 any area designated by the Secretary 

8 of Housing and Urban Development 

9 as an area which has high construc10 tion, land, or utility costs relative to 

11 area median gross income, any rural 

12 area, and any Indian area. 

13 ‘‘(II) RURAL AREA.—For pur14 poses of subclause (I), the term ‘rural 

15 area’ means any non-metropolitan 

16 area, or any rural area as defined by 

17 section 520 of the Housing Act of 

18 1949, which is identified by the quali19 fied allocation plan under subsection 

20 (m)(1)(B). 

21 ‘‘(III) INDIAN AREA.—For pur22 poses of subclause (I), the term ‘In23 dian area’ means any Indian area (as 

24 defined in section 4(11) of the Native 

25 American Housing Assistance and 


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1 Self Determination Act of 1996 (25 

2 U.S.C. 4103(11))). 

3 ‘‘(IV) SPECIAL RULE FOR BUILD4 INGS IN INDIAN AREAS.—In the case 

5 of an area which is a difficult develop6 ment area solely because it is an In7 dian area, a building shall not be 

8 treated as located in such area unless 

9 such building is assisted or financed 

10 under the Native American Housing 

11 Assistance and Self Determination 

12 Act of 1996 (25 U.S.C. 4101 et seq.) 

13 or the project sponsor is an Indian 

14 tribe (as defined in section 

15 45A(c)(6)), a tribally designated hous16 ing entity (as defined in section 4(22) 

17 of such Act (25 U.S.C. 4103(22))), or 

18 wholly owned or controlled by such an 

19 Indian tribe or tribally designated 

20 housing entity. 

21 ‘‘(V) LIMIT ON AREAS DES22 IGNATED.—The portions of metropoli23 tan statistical areas which may be 

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1 gate area having 20 percent of the 

2 population of such metropolitan sta3 tistical areas. A comparable rule shall 

4 apply to nonmetropolitan areas. 

5 ‘‘(iv) SPECIAL RULES AND DEFINI6 TIONS.—For purposes of this subpara7 graph— 

8 ‘‘(I) population shall be deter9 mined on the basis of the most recent 

10 decennial census for which data are 

11 available, 

12 ‘‘(II) area median gross income 

13 shall be determined in accordance 

14 with subsection (g)(4), 

15 ‘‘(III) the term ‘metropolitan sta16 tistical area’ has the same meaning as 

17 when used in section 143(k)(2)(B), 

18 and 

19 ‘‘(IV) the term ‘nonmetropolitan 

20 area’ means any county (or portion 

21 thereof) which is not within a metro22 politan statistical area. 

23 ‘‘(v) BUILDINGS DESIGNATED BY

24 STATE HOUSING CREDIT AGENCY.—Any 

25 building which is designated by the State 


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1 housing credit agency as requiring the in2 crease in credit under this subparagraph in 

3 order for such building to be financially 

4 feasible as part of a qualified working fam5 ilies housing project shall be treated for 

6 purposes of this subparagraph as located 

7 in a difficult development area which is 

8 designated for purposes of this subpara9 graph. 

10 ‘‘(5) CREDIT ALLOWABLE FOR CERTAIN BUILD11 INGS ACQUIRED DURING 10-YEAR PERIOD.—On ap12 plication by the taxpayer, the Secretary may waive 

13 paragraph (2)(B)(ii) with respect to any building ac14 quired from an insured depository institution in de15 fault (as defined in section 3 of the Federal Deposit 

16 Insurance Act) or from a receiver or conservator of 

17 such an institution. 

18 ‘‘(6) ACQUISITION OF BUILDING BEFORE END

19 OF PRIOR CREDIT PERIOD.— 

20 ‘‘(A) IN GENERAL.—Under regulations 

21 prescribed by the Secretary, in the case of a 

22 building described in subparagraph (B) (or in23 terest therein) which is acquired by the tax24 payer— 


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1 ‘‘(i) paragraph (2)(B) shall not apply, 

2 but 

3 ‘‘(ii) the credit allowable by reason of 

4 subsection (a) to the taxpayer for any pe5 riod after such acquisition shall be equal to 

6 the amount of credit which would have 

7 been allowable under subsection (a) for 

8 such period to the prior owner referred to 

9 in subparagraph (B) had such owner not 

10 disposed of the building. 

11 ‘‘(B) DESCRIPTION OF BUILDING.—A 

12 building is described in this subparagraph if— 

13 ‘‘(i) a credit was allowed by reason of 

14 subsection (a) to any prior owner of such 

15 building, and 

16 ‘‘(ii) the taxpayer acquired such build17 ing before the end of the credit period for 

18 such building with respect to such prior 

19 owner (determined without regard to any 

20 disposition by such prior owner). 

21 ‘‘(e) REHABILITATION EXPENDITURES TREATED AS

22 SEPARATE NEW BUILDING.— 

23 ‘‘(1) IN GENERAL.—Rehabilitation expenditures 

24 paid or incurred by the taxpayer with respect to any 


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1 building shall be treated for purposes of this section 

2 as a separate building which is not a new building. 

3 ‘‘(2) REHABILITATION EXPENDITURES.—For 

4 purposes of paragraph (1)— 

5 ‘‘(A) IN GENERAL.—The term ‘rehabilita6 tion expenditures’ means amounts chargeable to 

7 capital account and incurred for property (or 

8 additions or improvements to property) of a 

9 character subject to the allowance for deprecia10 tion in connection with the rehabilitation of a 

11 building. 

12 ‘‘(B) COST OF ACQUISITION, ETC., NOT IN13 CLUDED.—Such term does not include the cost 

14 of acquiring any building (or interest therein) 

15 or any amount not permitted to be taken into 

16 account under paragraph (3) of subsection (d). 

17 ‘‘(C) CERTAIN RELOCATION COSTS.—In 

18 the case of a rehabilitation of a building to 

19 which section 280B does not apply, costs relat20 ing to the relocation of occupants, including— 

21 ‘‘(i) amounts paid to occupants, 

22 ‘‘(ii) amounts paid to third parties for 

23 services relating to such relocation, and 

24 ‘‘(iii) amounts paid for temporary 

25 housing for occupants, 


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1 shall be treated as chargeable to capital account 

2 and taken into account as rehabilitation ex3 penditures. 

4 ‘‘(3) MINIMUM EXPENDITURES TO QUALIFY.— 

5 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

6 apply to rehabilitation expenditures with respect 

7 to any building only if— 

8 ‘‘(i) the expenditures are allocable to 

9 1 or more working families units or sub10 stantially benefit such units, and 

11 ‘‘(ii) the amount of such expenditures 

12 during any 24-month period meets the re13 quirements of whichever of the following 

14 subclauses requires the greater amount of 

15 such expenditures: 

16 ‘‘(I) The requirement of this sub17 clause is met if such amount is not 

18 less than 20 percent of the adjusted 

19 basis of the building (determined as of 

20 the 1st day of such period and with21 out regard to paragraphs (2) and (3) 

22 of section 1016(a)). 

23 ‘‘(II) The requirement of this 

24 subclause is met if the qualified basis 

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1 vided by the number of working fami2 lies units in the building, is equal to 

3 or greater than the dollar amount in 

4 effect under section 42(e)(3)(A)(ii)(II) 

5 for the calendar year in which such 

6 expenditures are treated as placed in 

7 service under paragraph (4). 

8 ‘‘(B) DATE OF DETERMINATION.—The de9 termination under subparagraph (A) shall be 

10 made as of the close of the 1st taxable year in 

11 the credit period with respect to such expendi12 tures. 

13 ‘‘(4) SPECIAL RULES.—For purposes of apply14 ing this section with respect to expenditures which 

15 are treated as a separate building by reason of this 

16 subsection— 

17 ‘‘(A) such expenditures shall be treated as 

18 placed in service at the close of the 24-month 

19 period referred to in paragraph (3)(A), and 

20 ‘‘(B) the applicable fraction under sub21 section (c)(1) shall be the applicable fraction for 

22 the building (without regard to paragraph (1)) 

23 with respect to which the expenditures were in24 curred. 


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1 Nothing in subsection (d)(2) shall prevent a credit 

2 from being allowed by reason of this subsection. 

3 ‘‘(5) NO DOUBLE COUNTING.—Rehabilitation 

4 expenditures may, at the election of the taxpayer, be 

5 taken into account under this subsection or sub6 section (d)(2)(A)(i) but not under both such sub7 sections. 

8 ‘‘(6) REGULATIONS TO APPLY SUBSECTION

9 WITH RESPECT TO GROUP OF UNITS IN BUILDING.— 

10 The Secretary may prescribe regulations, consistent 

11 with the purposes of this subsection, treating a 

12 group of units with respect to which rehabilitation 

13 expenditures are incurred as a separate new build14 ing. 

15 ‘‘(f) DEFINITION AND SPECIAL RULES RELATING TO

16 CREDIT PERIOD.— 

17 ‘‘(1) CREDIT PERIOD DEFINED.—For purposes 

18 of this section, the term ‘credit period’ means, with 

19 respect to any building, the period of 15 taxable 

20 years beginning with— 

21 ‘‘(A) the taxable year in which the building 

22 is placed in service, or 

23 ‘‘(B) at the election of the taxpayer, the 

24 succeeding taxable year, 


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1 but only if the building is a qualified working fami2 lies building as of the close of the 1st year of such 

3 period. The election under subparagraph (B), once 

4 made, shall be irrevocable. 

5 ‘‘(2) SPECIAL RULE FOR 1ST YEAR OF CREDIT

6 PERIOD.— 

7 ‘‘(A) IN GENERAL.—The credit allowable 

8 under subsection (a) with respect to any build9 ing for the 1st taxable year of the credit period 

10 shall be determined by substituting for the ap11 plicable fraction under subsection (c)(1) the 

12 fraction— 

13 ‘‘(i) the numerator of which is the 

14 sum of the applicable fractions determined 

15 under subsection (c)(1) as of the close of 

16 each full month of such year during which 

17 such building was in service, and 

18 ‘‘(ii) the denominator of which is 12. 

19 ‘‘(B) DISALLOWED 1ST-YEAR CREDIT AL20 LOWED IN 16TH YEAR.—Any reduction by rea21 son of subparagraph (A) in the credit allowable 

22 (without regard to subparagraph (A)) for the 

23 1st taxable year of the credit period shall be al24 lowable under subsection (a) for the 1st taxable 

25 year following the credit period. 


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1 ‘‘(3) DETERMINATION OF APPLICABLE PER2 CENTAGE WITH RESPECT TO INCREASES IN QUALI3 FIED BASIS AFTER 1ST YEAR OF CREDIT PERIOD.— 

4 ‘‘(A) IN GENERAL.—In the case of any 

5 building which was a qualified working families 

6 building as of the close of the 1st year of the 

7 credit period, if— 

8 ‘‘(i) as of the close of any taxable year 

9 in the credit period (after the 1st year of 

10 such period) the qualified basis of such 

11 building, exceeds 

12 ‘‘(ii) the qualified basis of such build13 ing as of the close of the 1st year of the 

14 credit period, 

15 the applicable percentage which shall apply 

16 under subsection (a) for the taxable year to 

such excess shall be the percentage equal to 2 17 ⁄3

18 of the applicable percentage which (after the 

19 application of subsection (h)) would but for this 

20 paragraph apply to such basis. 

21 ‘‘(B) 1ST YEAR COMPUTATION APPLIES.— 

22 A rule similar to the rule of paragraph (2)(A) 

23 shall apply to any increase in qualified basis to 

24 which subparagraph (A) applies for the 1st year 

25 of such increase. 


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1 ‘‘(4) DISPOSITIONS OF PROPERTY.—If a build2 ing (or an interest therein) is disposed of during any 

3 year for which credit is allowable under subsection 

4 (a), such credit shall be allocated between the par5 ties on the basis of the number of days during such 

6 year the building (or interest) was held by each. 

7 ‘‘(5) CREDIT PERIOD FOR EXISTING BUILDINGS

8 NOT TO BEGIN BEFORE REHABILITATION CREDIT

9 ALLOWED.— 

10 ‘‘(A) IN GENERAL.—The credit period for 

11 an existing building shall not begin before the 

12 1st taxable year of the credit period for reha13 bilitation expenditures with respect to the build14 ing. 

15 ‘‘(B) ACQUISITION CREDIT ALLOWED FOR

16 CERTAIN BUILDINGS NOT ALLOWED A REHA17 BILITATION CREDIT.— 

18 ‘‘(i) IN GENERAL.—In the case of a 

19 building described in clause (ii)— 

20 ‘‘(I) subsection (d)(2)(B)(iv) 

21 shall not apply, and 

22 ‘‘(II) the credit period for such 

23 building shall not begin before the 

24 taxable year which would be the 1st 

25 taxable year of the credit period for 


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1 rehabilitation expenditures with re2 spect to the building under the modi3 fications described in clause (ii)(II). 

4 ‘‘(ii) BUILDING DESCRIBED.—A build5 ing is described in this clause if— 

6 ‘‘(I) a waiver is granted under 

7 subsection (d)(4) with respect to the 

8 acquisition of the building, and 

9 ‘‘(II) a credit would be allowed 

10 for rehabilitation expenditures with 

11 respect to such building if subsection 

12 (e)(3)(A)(ii)(I) did not apply and if 

13 the dollar amount in effect under sub14 section (e)(3)(A)(ii)(II) were two15 thirds of such amount. 

16 ‘‘(g) QUALIFIED WORKING FAMILIES HOUSING

17 PROJECT.—For purposes of this section— 

18 ‘‘(1) QUALIFIED WORKING FAMILIES HOUSING

19 PROJECT.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualified 

21 working families housing project’ means any 

22 project for residential rental property if such 

23 project meets the low-income requirements of 

24 subparagraph (B) and the working families re25 quirements of subparagraph (C). 


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1 ‘‘(B) LOW-INCOME REQUIREMENTS.—The 

2 project meets the low-income requirements of 

3 this subparagraph if 20 percent or more of the 

4 residential units in such project are both rent5 restricted and occupied by individuals whose in6 come is 60 percent or less of area median gross 

7 income. 

8 ‘‘(C) WORKING FAMILIES REQUIRE9 MENTS.— 

10 ‘‘(i) IN GENERAL.—The project meets 

11 the working families requirements of this 

12 subparagraph if 40 percent or more of the 

13 residential units in such project are both 

14 rent-restricted and occupied by individuals 

15 whose income does not exceed the imputed 

16 income limitation designated by the tax17 payer with respect to the respective unit. 

18 ‘‘(ii) SPECIAL RULES RELATING TO

19 INCOME LIMITATION.—For purposes of 

20 clause (i)— 

21 ‘‘(I) DESIGNATION.—The tax22 payer shall designate the imputed in23 come limitation of each unit taken 

24 into account under such clause. 


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1 ‘‘(II) AVERAGE TEST.—The aver2 age of the imputed income limitations 

3 designated under subclause (I) shall 

4 not exceed 100 percent of area me5 dian gross income. 

6 ‘‘(III) PERMITTED INCRE7 MENTS.—The designated imputed in8 come limitation of any unit under sub9 clause (I) shall be 70, 80, 90, 100, 

10 110, 120, 130, 140, 150, 160, 170, or 

11 180 percent of area median gross in12 come. 

13 Any designation under this paragraph, once made, 

14 shall be irrevocable. For purposes of this paragraph, 

15 any property shall not be treated as failing to be res16 idential rental property merely because part of the 

17 building in which such property is located is used for 

18 purposes other than residential rental purposes. 

19 ‘‘(2) RENT-RESTRICTED UNITS.— 

20 ‘‘(A) IN GENERAL.—For purposes of para21 graph (1), a residential unit is rent-restricted if 

22 the gross rent with respect to such unit does 

23 not exceed 30 percent of the imputed income 

24 limitation applicable to such unit. For purposes 

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1 come limitation under paragraph (1) applicable 

2 for any period shall not be less than such limi3 tation applicable for the earliest period the 

4 building (which contains the unit) was included 

5 in the determination of whether the project is 

6 a qualified working families housing project. 

7 ‘‘(B) GROSS RENT.—For purposes of sub8 paragraph (A), gross rent— 

9 ‘‘(i) includes any utility allowance de10 termined by the Secretary after taking into 

11 account such determinations under section 

12 8 of the United States Housing Act of 

13 1937, 

14 ‘‘(ii) does not include any fee for a 

15 supportive service which is paid to the 

16 owner of the unit (on the basis of the 

17 working families status of the tenant of the 

18 unit) by any governmental program of as19 sistance (or by an organization described 

20 in section 501(c)(3) and exempt from tax 

21 under section 501(a)) if such program (or 

22 organization) provides assistance for rent 

23 and the amount of assistance provided for 

24 rent is not separable from the amount of 


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1 assistance provided for supportive services, 

2 and 

3 ‘‘(iii) does not include any rental pay4 ment to the owner of the unit to the extent 

5 such owner pays an equivalent amount to 

6 the Farmers’ Home Administration under 

7 section 515 of the Housing Act of 1949. 

8 For purposes of clause (ii), the term ‘supportive 

9 service’ means any service provided under a 

10 planned program of services designed to enable 

11 residents of a residential rental property to re12 main independent and avoid placement in a 

13 hospital, nursing home, or intermediate care fa14 cility for the mentally or physically handi15 capped. 

16 ‘‘(C) IMPUTED INCOME LIMITATION APPLI17 CABLE TO UNIT.—For purposes of this para18 graph, the imputed income limitation applicable 

19 to a unit is the income limitation which would 

20 apply under paragraph (1) to individuals occu21 pying the unit if the number of individuals oc22 cupying the unit were as follows: 

23 ‘‘(i) In the case of a unit which does 

24 not have a separate bedroom, 1 individual. 


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1 ‘‘(ii) In the case of a unit which has 

2 1 or more separate bedrooms, 1.5 individ3 uals for each separate bedroom. 

4 In the case of a project with respect to which 

5 a credit is allowable by reason of this section 

6 and for which financing is provided by a bond 

7 described in section 142(a)(7), the imputed in8 come limitation shall apply in lieu of the other9 wise applicable income limitation for purposes 

10 of applying section 142(d)(4)(B)(ii). 

11 ‘‘(D) TREATMENT OF UNITS OCCUPIED BY

12 INDIVIDUALS WHOSE INCOMES RISE ABOVE

13 LIMIT.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), notwithstanding an in16 crease in the income of the occupants of a 

17 working families unit above the income 

18 limitation applicable under paragraph (1), 

19 such unit shall continue to be treated as a 

20 working families unit if the income of such 

21 occupants initially met such income limita22 tion and such unit continues to be rent-re23 stricted. 

24 ‘‘(ii) NEXT AVAILABLE UNIT MUST BE

25 RENTED TO WORKING FAMILIES TENANT


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1 IF INCOME RISES ABOVE 140 PERCENT OF

2 INCOME LIMIT.—If the income of the occu3 pants of the unit increases above 140 per4 cent of the income limitation applicable 

5 under paragraph (1), clause (i) shall cease 

6 to apply to such unit if any residential 

7 rental unit in the building (of a size com8 parable to, or smaller than, such unit) is 

9 occupied by a new resident whose income 

10 exceeds such income limitation. 

11 ‘‘(3) DATE FOR MEETING REQUIREMENTS.— 

12 ‘‘(A) IN GENERAL.—Except as otherwise 

13 provided in this paragraph, a building shall be 

14 treated as a qualified working families building 

15 only if the project (of which such building is a 

16 part) meets the requirements of paragraph (1) 

17 not later than the close of the 1st year of the 

18 credit period for such building. 

19 ‘‘(B) BUILDINGS WHICH RELY ON LATER

20 BUILDINGS FOR QUALIFICATION.— 

21 ‘‘(i) IN GENERAL.—In determining 

22 whether a building (hereinafter in this sub23 paragraph referred to as the ‘prior build24 ing’) is a qualified working families build25 ing, the taxpayer may take into account 1 


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1 or more additional buildings placed in serv2 ice during the 12-month period described 

3 in subparagraph (A) with respect to the 

4 prior building only if the taxpayer elects to 

5 apply clause (ii) with respect to each addi6 tional building taken into account. 

7 ‘‘(ii) TREATMENT OF ELECTED

8 BUILDINGS.—In the case of a building 

9 which the taxpayer elects to take into ac10 count under clause (i), the period under 

11 subparagraph (A) for such building shall 

12 end at the close of the 12-month period ap13 plicable to the prior building. 

14 ‘‘(iii) DATE PRIOR BUILDING IS

15 TREATED AS PLACED IN SERVICE.—For 

16 purposes of determining the credit period 

17 for the prior building, the prior building 

18 shall be treated for purposes of this section 

19 as placed in service on the most recent 

20 date any additional building elected by the 

21 taxpayer (with respect to such prior build22 ing) was placed in service. 

23 ‘‘(C) SPECIAL RULE.—A building— 

24 ‘‘(i) other than the 1st building placed 

25 in service as part of a project, and 


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1 ‘‘(ii) other than a building which is 

2 placed in service during the 12-month pe3 riod described in subparagraph (A) with 

4 respect to a prior building which becomes 

5 a qualified working families building, 

6 shall in no event be treated as a qualified work7 ing families building unless the project is a 

8 qualified working families housing project 

9 (without regard to such building) on the date 

10 such building is placed in service. 

11 ‘‘(D) PROJECTS WITH MORE THAN 1

12 BUILDING MUST BE IDENTIFIED.—For pur13 poses of this section, a project shall be treated 

14 as consisting of only 1 building unless, before 

15 the close of the 1st calendar year in the project 

16 period (as defined in subsection (h)(1)(F)(ii)), 

17 each building which is (or will be) part of such 

18 project is identified in such form and manner 

19 as the Secretary may provide. 

20 ‘‘(4) CERTAIN RULES MADE APPLICABLE.— 

21 Paragraphs (2) (other than subparagraph (A) there22 of), (3), and (7) of section 142(d), and section 

23 6652(j), shall apply for purposes of determining 

24 whether any project is a qualified working families 

25 housing project and whether any unit is a working 


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1 families unit; except that, in applying such provi2 sions for such purposes— 

3 ‘‘(A) the term ‘gross rent’ shall have the 

4 meaning given such term by paragraph (2)(B) 

5 of this subsection, and 

6 ‘‘(B) the term ‘applicable income limit’ 

7 means the limitation under paragraph (1) of 

8 this subsection. 

9 ‘‘(5) ELECTION TO TREAT BUILDING AFTER

10 CREDIT PERIOD AS NOT PART OF A PROJECT.—For 

11 purposes of this section, the taxpayer may elect to 

12 treat any building as not part of a qualified working 

13 families housing project for any period beginning 

14 after the credit period for such building. 

15 ‘‘(6) SPECIAL RULE WHERE DE MINIMIS EQ16 UITY CONTRIBUTION.—Property shall not be treated 

17 as failing to be residential rental property for pur18 poses of this section merely because the occupant of 

19 a residential unit in the project pays (on a voluntary 

20 basis) to the lessor a de minimis amount to be held 

21 toward the purchase by such occupant of a residen22 tial unit in such project if— 

23 ‘‘(A) all amounts so paid are refunded to 

24 the occupant on the cessation of his occupancy 

25 of a unit in the project, and 


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1 ‘‘(B) the purchase of the unit is not per2 mitted until after the close of the credit period 

3 with respect to the building in which the unit 

4 is located. 

5 Any amount paid to the lessor as described in the 

6 preceding sentence shall be included in gross rent 

7 under paragraph (2) for purposes of determining 

8 whether the unit is rent-restricted. 

9 ‘‘(7) SCATTERED SITE PROJECTS.—Buildings 

10 which would (but for their lack of proximity) be 

11 treated as a project for purposes of this section shall 

12 be so treated if all of the dwelling units in each of 

13 the buildings are rent-restricted (within the meaning 

14 of paragraph (2)) residential rental units. 

15 ‘‘(8) WAIVER OF CERTAIN RECERTIFI16 CATIONS.—On application by the taxpayer, the Sec17 retary may waive any annual recertification of ten18 ant income for purposes of this subsection, if the en19 tire building is occupied by working families tenants. 

20 ‘‘(9) CLARIFICATION OF GENERAL PUBLIC USE

21 REQUIREMENT.—A project does not fail to meet the 

22 general public use requirement solely because of oc23 cupancy restrictions or preferences that favor ten24 ants— 

25 ‘‘(A) with special needs, or 


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1 ‘‘(B) who are members of a specified group 

2 under a Federal program or State program or 

3 policy that supports housing for such a speci4 fied group. 

5 ‘‘(10) PREVAILING WAGE REQUIREMENTS.—No 

6 credit shall be determined under this section with re7 spect to any building (including any rehabilitation 

8 expenditures treated as a separate building under 

9 subsection (e)) unless such building meets require10 ments similar the requirements described in section 

11 45(b)(7). 

12 ‘‘(h) LIMITATION ON AGGREGATE CREDIT ALLOW13 ABLE WITH RESPECT TO PROJECTS LOCATED IN A

14 STATE.— 

15 ‘‘(1) CREDIT MAY NOT EXCEED CREDIT

16 AMOUNT ALLOCATED TO BUILDING.— 

17 ‘‘(A) IN GENERAL.—The amount of the 

18 credit determined under this section for any 

19 taxable year with respect to any building shall 

20 not exceed the housing credit dollar amount al21 located to such building under this subsection. 

22 ‘‘(B) TIME FOR MAKING ALLOCATION.— 

23 Except in the case of an allocation which meets 

24 the requirements of subparagraph (C), (D), 

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1 count under subparagraph (A) only if it is 

2 made not later than the close of the calendar 

3 year in which the building is placed in service. 

4 ‘‘(C) EXCEPTION WHERE BINDING COM5 MITMENT.—An allocation meets the require6 ments of this subparagraph if there is a binding 

7 commitment (not later than the close of the cal8 endar year in which the building is placed in 

9 service) by the housing credit agency to allocate 

10 a specified housing credit dollar amount to such 

11 building beginning in a specified later taxable 

12 year. 

13 ‘‘(D) EXCEPTION WHERE INCREASE IN

14 QUALIFIED BASIS.— 

15 ‘‘(i) IN GENERAL.—An allocation 

16 meets the requirements of this subpara17 graph if such allocation is made not later 

18 than the close of the calendar year in 

19 which ends the taxable year to which it will 

20 1st apply but only to the extent the 

21 amount of such allocation does not exceed 

22 the limitation under clause (ii). 

23 ‘‘(ii) LIMITATION.—The limitation 

24 under this clause is the amount of credit 

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1 gard to this subsection) for a taxable year 

2 with respect to an increase in the qualified 

3 basis of the building equal to the excess 

4 of— 

5 ‘‘(I) the qualified basis of such 

6 building as of the close of the 1st tax7 able year to which such allocation will 

8 apply, over 

9 ‘‘(II) the qualified basis of such 

10 building as of the close of the 1st tax11 able year to which the most recent 

12 prior housing credit allocation with re13 spect to such building applied. 

14 ‘‘(iii) HOUSING CREDIT DOLLAR

15 AMOUNT REDUCED BY FULL ALLOCA16 TION.—Notwithstanding clause (i), the full 

17 amount of the allocation shall be taken 

18 into account under paragraph (2). 

19 ‘‘(E) EXCEPTION WHERE 10 PERCENT OF

20 COST INCURRED.— 

21 ‘‘(i) IN GENERAL.—An allocation 

22 meets the requirements of this subpara23 graph if such allocation is made with re24 spect to a qualified building which is 

25 placed in service not later than the close of 


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1 the second calendar year following the cal2 endar year in which the allocation is made. 

3 ‘‘(ii) QUALIFIED BUILDING.—For pur4 poses of clause (i), the term ‘qualified 

5 building’ means any building which is part 

6 of a project if the taxpayer’s basis in such 

7 project (as of the date which is 1 year 

8 after the date that the allocation was 

9 made) is more than 10 percent of the tax10 payer’s reasonably expected basis in such 

11 project (as of the close of the second cal12 endar year referred to in clause (i)). Such 

13 term does not include any existing building 

14 unless a credit is allowable under sub15 section (e) for rehabilitation expenditures 

16 paid or incurred by the taxpayer with re17 spect to such building for a taxable year 

18 ending during the second calendar year re19 ferred to in clause (i) or the prior taxable 

20 year. 

21 ‘‘(F) ALLOCATION OF CREDIT ON A

22 PROJECT BASIS.— 

23 ‘‘(i) IN GENERAL.—In the case of a 

24 project which includes (or will include) 


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1 more than 1 building, an allocation meets 

2 the requirements of this subparagraph if— 

3 ‘‘(I) the allocation is made to the 

4 project for a calendar year during the 

5 project period, 

6 ‘‘(II) the allocation only applies 

7 to buildings placed in service during 

8 or after the calendar year for which 

9 the allocation is made, and 

10 ‘‘(III) the portion of such alloca11 tion which is allocated to any building 

12 in such project is specified not later 

13 than the close of the calendar year in 

14 which the building is placed in service. 

15 ‘‘(ii) PROJECT PERIOD.—For pur16 poses of clause (i), the term ‘project pe17 riod’ means the period— 

18 ‘‘(I) beginning with the 1st cal19 endar year for which an allocation 

20 may be made for the 1st building 

21 placed in service as part of such 

22 project, and 

23 ‘‘(II) ending with the calendar 

24 year the last building is placed in 

25 service as part of such project. 


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1 ‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY

2 TO ALL TAXABLE YEARS ENDING DURING OR AFTER

3 CREDIT ALLOCATION YEAR.—Any housing credit dol4 lar amount allocated to any building for any cal5 endar year— 

6 ‘‘(A) shall apply to such building for all 

7 taxable years in the credit period ending during 

8 or after such calendar year, and 

9 ‘‘(B) shall reduce the aggregate housing 

10 credit dollar amount of the allocating agency 

11 only for such calendar year. 

12 ‘‘(3) HOUSING CREDIT DOLLAR AMOUNT FOR

13 AGENCIES.— 

14 ‘‘(A) IN GENERAL.—The aggregate hous15 ing credit dollar amount which a housing credit 

16 agency may allocate for any calendar year is 

17 the portion of the State housing credit ceiling 

18 allocated under this paragraph for such cal19 endar year to such agency. 

20 ‘‘(B) STATE CEILING INITIALLY ALLO21 CATED TO STATE HOUSING CREDIT AGEN22 CIES.—Except as provided in subparagraph 

23 (D), the State housing credit ceiling for each 

24 calendar year shall be allocated to the housing 

25 credit agency of such State. If there is more 


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1 than 1 housing credit agency of a State, all 

2 such agencies shall be treated as a single agen3 cy. 

4 ‘‘(C) STATE HOUSING CREDIT CEILING.— 

5 The State housing credit ceiling applicable to 

6 any State for any calendar year shall be an 

7 amount equal to the sum of— 

8 ‘‘(i) the unused State housing credit 

9 ceiling (if any) of such State for the pre10 ceding calendar year, 

11 ‘‘(ii) the greater of— 

12 ‘‘(I) $1.00 multiplied by the 

13 State population, or 

14 ‘‘(II) $1,500,000, plus 

15 ‘‘(iii) the amount of State housing 

16 credit ceiling returned in the calendar year. 

17 For purposes of clause (i), the unused State 

18 housing credit ceiling for any calendar year is 

19 the excess (if any) of the sum of the amounts 

20 described in clauses (ii) (reduced by the aggre21 gate amounts described in paragraph (10)(A)(i) 

22 with respect to all elections made for such cal23 endar year) and (iii) over the aggregate housing 

24 credit dollar amount allocated for such year. 

25 For purposes of clause (iii), the amount of 


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1 State housing credit ceiling returned in the cal2 endar year equals the housing credit dollar 

3 amount previously allocated within the State to 

4 any project which fails to meet the 10 percent 

5 test under paragraph (1)(E)(ii) on a date after 

6 the close of the calendar year in which the allo7 cation was made or which does not become a 

8 qualified working families housing project with9 in the period required by this section or the 

10 terms of the allocation or to any project with 

11 respect to which an allocation is cancelled by 

12 mutual consent of the housing credit agency 

13 and the allocation recipient. 

14 ‘‘(D) STATE MAY PROVIDE FOR DIF15 FERENT ALLOCATION.—Rules similar to the 

16 rules of section 146(e) (other than paragraph 

17 (2)(B) thereof) shall apply for purposes of this 

18 paragraph. 

19 ‘‘(E) POPULATION.—For purposes of this 

20 paragraph, population shall be determined in 

21 accordance with section 146(j). 

22 ‘‘(F) COST-OF-LIVING ADJUSTMENT.— 

23 ‘‘(i) IN GENERAL.—In the case of a 

24 calendar year after 2024, the $1,500,000 

25 and $1.00 amounts in subparagraph (C) 


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1 shall each be increased by an amount equal 

2 to— 

3 ‘‘(I) such dollar amount, multi4 plied by 

5 ‘‘(II) the cost-of-living adjust6 ment determined under section 1(f)(3) 

7 for such calendar year by substituting 

8 ‘calendar year 2023’ for ‘calendar 

9 year 2016’ in subparagraph (A)(ii) 

10 thereof. 

11 ‘‘(ii) ROUNDING.— 

12 ‘‘(I) In the case of the 

13 $1,140,000 amount, any increase 

14 under clause (i) which is not a mul15 tiple of $5,000 shall be rounded to the 

16 next lowest multiple of $5,000. 

17 ‘‘(II) In the case of the $1.00 

18 amount, any increase under clause (i) 

19 which is not a multiple of 5 cents 

20 shall be rounded to the next lowest 

21 multiple of 5 cents. 

22 ‘‘(4) PORTION OF STATE CEILING SET-ASIDE

23 FOR CERTAIN PROJECTS INVOLVING QUALIFIED

24 NONPROFIT ORGANIZATIONS.— 


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1 ‘‘(A) IN GENERAL.—Not more than 90 

2 percent of the State housing credit ceiling (de3 termined without regard to paragraph (7)) for 

4 any State for any calendar year shall be allo5 cated to projects other than qualified working 

6 families housing projects described in subpara7 graph (B). 

8 ‘‘(B) PROJECTS INVOLVING QUALIFIED

9 NONPROFIT ORGANIZATIONS.—For purposes of 

10 subparagraph (A), a qualified working families 

11 housing project is described in this subpara12 graph if a qualified nonprofit organization is to 

13 own an interest in the project (directly or 

14 through a partnership) and materially partici15 pate (within the meaning of section 469(h)) in 

16 the development and operation of the project 

17 throughout the credit period. 

18 ‘‘(C) QUALIFIED NONPROFIT ORGANIZA19 TION.—For purposes of this paragraph, the 

20 term ‘qualified nonprofit organization’ means 

21 any organization if— 

22 ‘‘(i) such organization is described in 

23 paragraph (3) or (4) of section 501(c) and 

24 is exempt from tax under section 501(a), 


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1 ‘‘(ii) such organization is determined 

2 by the State housing credit agency not to 

3 be affiliated with or controlled by a for4 profit organization, and 

5 ‘‘(iii) one of the exempt purposes of 

6 such organization includes the fostering of 

7 working families housing. 

8 ‘‘(D) TREATMENT OF CERTAIN SUBSIDI9 ARIES.— 

10 ‘‘(i) IN GENERAL.—For purposes of 

11 this paragraph, a qualified nonprofit orga12 nization shall be treated as satisfying the 

13 ownership and material participation test 

14 of subparagraph (B) if any qualified cor15 poration in which such organization holds 

16 stock satisfies such test. 

17 ‘‘(ii) QUALIFIED CORPORATION.—For 

18 purposes of clause (i), the term ‘qualified 

19 corporation’ means any corporation if 100 

20 percent of the stock of such corporation is 

21 held by 1 or more qualified nonprofit orga22 nizations at all times during the period 

23 such corporation is in existence. 

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1 graph (3) shall be construed to permit a State 

2 not to comply with subparagraph (A) of this 

3 paragraph. 

4 ‘‘(5) BUILDINGS ELIGIBLE FOR CREDIT ONLY

5 IF MINIMUM LONG-TERM COMMITMENT TO WORKING

6 FAMILIES HOUSING.— 

7 ‘‘(A) IN GENERAL.—No credit shall be al8 lowed by reason of this section with respect to 

9 any building for the taxable year unless an ex10 tended working families housing commitment is 

11 in effect as of the end of such taxable year. 

12 ‘‘(B) EXTENDED WORKING FAMILIES

13 HOUSING COMMITMENT.—For purposes of this 

14 paragraph, the term ‘extended working families 

15 housing commitment’ means any agreement be16 tween the taxpayer and the housing credit agen17 cy— 

18 ‘‘(i) which requires that the applicable 

19 fraction (as defined in subsection (c)(1)) 

20 for the building for each taxable year in 

21 the extended use period will not be less 

22 than the applicable fraction specified in 

23 such agreement and which prohibits the 

24 actions described in subclauses (I) and (II) 

25 of subparagraph (E)(ii), 


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1 ‘‘(ii) which allows individuals who 

2 meet the income limitation applicable to 

3 the building under subsection (g) (whether 

4 prospective, present, or former occupants 

5 of the building) the right to enforce in any 

6 State court the requirement and prohibi7 tions of clause (i), 

8 ‘‘(iii) which prohibits the disposition 

9 to any person of any portion of the build10 ing to which such agreement applies unless 

11 all of the building to which such agreement 

12 applies is disposed of to such person, 

13 ‘‘(iv) which prohibits the refusal to 

14 lease to a holder of a voucher or certificate 

15 of eligibility under section 8 of the United 

16 States Housing Act of 1937 because of the 

17 status of the prospective tenant as such a 

18 holder, 

19 ‘‘(v) which is binding on all successors 

20 of the taxpayer, and 

21 ‘‘(vi) which, with respect to the prop22 erty, is recorded pursuant to State law as 

23 a restrictive covenant. 

24 ‘‘(C) ALLOCATION OF CREDIT MAY NOT

25 EXCEED AMOUNT NECESSARY TO SUPPORT


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1 COMMITMENT.—The housing credit dollar 

2 amount allocated to any building may not ex3 ceed the amount necessary to support the appli4 cable fraction specified in the extended working 

5 families housing commitment for such building, 

6 including any increase in such fraction pursu7 ant to the application of subsection (f)(3) if 

8 such increase is reflected in an amended work9 ing families housing commitment. 

10 ‘‘(D) EXTENDED USE PERIOD.—For pur11 poses of this paragraph, the term ‘extended use 

12 period’ means the period— 

13 ‘‘(i) beginning on the 1st day in the 

14 credit period on which such building is 

15 part of a qualified working families hous16 ing project, and 

17 ‘‘(ii) ending on the later of— 

18 ‘‘(I) the date specified by such 

19 agency in such agreement, or 

20 ‘‘(II) the date which is 15 years 

21 after the close of the credit period. 

22 ‘‘(E) EXCEPTIONS IF FORECLOSURE OR IF

23 NO BUYER WILLING TO MAINTAIN WORKING

24 FAMILIES STATUS.— 


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1 ‘‘(i) IN GENERAL.—The extended use 

2 period for any building shall terminate on 

3 the 61st day after the taxpayer (or a suc4 cessor in interest) provides notice to the 

5 Secretary and the housing credit agency 

6 that the building has been acquired by 

7 foreclosure (or instrument in lieu of fore8 closure) and that the taxpayer intends the 

9 termination of such period, unless, before 

10 such date, the Secretary or the housing 

11 credit agency determines that such acquisi12 tion is part of an arrangement with the 

13 taxpayer a purpose of which is to termi14 nate such period. 

15 ‘‘(ii) EVICTION, ETC., OF EXISTING

16 WORKING FAMILIES TENANTS NOT PER17 MITTED.—The termination of an extended 

18 use period under clause (i) shall not be 

19 construed to permit before the close of the 

20 3-year period following such termination— 

21 ‘‘(I) the eviction or the termi22 nation of tenancy (other than for good 

23 cause) of an existing tenant of any 

24 working families unit, or 


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1 ‘‘(II) any increase in the gross 

2 rent with respect to such unit not oth3 erwise permitted under this section. 

4 ‘‘(F) EFFECT OF NONCOMPLIANCE.—If, 

5 during a taxable year, there is a determination 

6 that an extended working families housing 

7 agreement was not in effect as of the beginning 

8 of such year, such determination shall not apply 

9 to any period before such year and subpara10 graph (A) shall be applied without regard to 

11 such determination if the failure is corrected 

12 within 1 year from the date of the determina13 tion. 

14 ‘‘(G) PROJECTS WHICH CONSIST OF MORE

15 THAN 1 BUILDING.—The application of this 

16 paragraph to projects which consist of more 

17 than 1 building shall be made under regulations 

18 prescribed by the Secretary. 

19 ‘‘(6) SPECIAL RULES.— 

20 ‘‘(A) BUILDING MUST BE LOCATED WITH21 IN JURISDICTION OF CREDIT AGENCY.—A hous22 ing credit agency may allocate its aggregate 

23 housing credit dollar amount only to buildings 

24 located in the jurisdiction of the governmental 

25 unit of which such agency is a part. 


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1 ‘‘(B) AGENCY ALLOCATIONS IN EXCESS OF

2 LIMIT.—If the aggregate housing credit dollar 

3 amounts allocated by a housing credit agency 

4 for any calendar year exceed the portion of the 

5 State housing credit ceiling allocated to such 

6 agency for such calendar year, the housing 

7 credit dollar amounts so allocated shall be re8 duced (to the extent of such excess) for build9 ings in the reverse of the order in which the al10 locations of such amounts were made. 

11 ‘‘(C) CREDIT REDUCED IF ALLOCATED

12 CREDIT DOLLAR AMOUNT IS LESS THAN CREDIT

13 WHICH WOULD BE ALLOWABLE WITHOUT RE14 GARD TO PLACED IN SERVICE CONVENTION, 

15 ETC.— 

16 ‘‘(i) IN GENERAL.—The amount of 

17 the credit determined under this section 

18 with respect to any building shall not ex19 ceed the clause (ii) percentage of the 

20 amount of the credit which would (but for 

21 this subparagraph) be determined under 

22 this section with respect to such building. 

23 ‘‘(ii) DETERMINATION OF PERCENT24 AGE.—For purposes of clause (i), the 


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1 clause (ii) percentage with respect to any 

2 building is the percentage which— 

3 ‘‘(I) the housing credit dollar 

4 amount allocated to such building, 

5 bears to 

6 ‘‘(II) the credit amount deter7 mined in accordance with clause (iii). 

8 ‘‘(iii) DETERMINATION OF CREDIT

9 AMOUNT.—The credit amount determined 

10 in accordance with this clause is the 

11 amount of the credit which would (but for 

12 this subparagraph) be determined under 

13 this section with respect to the building 

14 if— 

15 ‘‘(I) this section were applied 

16 without regard to paragraphs (2)(A) 

17 and (3)(B) of subsection (f), and 

18 ‘‘(II) subsection (f)(3)(A) were 

19 applied without regard to ‘the percentage equal to 2 20 ⁄3 of’. 

21 ‘‘(D) HOUSING CREDIT AGENCY TO SPECI22 FY APPLICABLE PERCENTAGE AND MAXIMUM

23 QUALIFIED BASIS.—In allocating a housing 

24 credit dollar amount to any building, the hous25 ing credit agency shall specify the applicable 


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1 percentage and the maximum qualified basis 

2 which may be taken into account under this 

3 section with respect to such building. The appli4 cable percentage and maximum qualified basis 

5 so specified shall not exceed the applicable per6 centage and qualified basis determined under 

7 this section without regard to this subsection. 

8 ‘‘(7) INCREASE IN STATE CEILING DEDICATED

9 TO CERTAIN RURAL DEVELOPMENT PROJECTS.— 

10 ‘‘(A) IN GENERAL.—The State housing 

11 credit ceiling for any calendar year shall be in12 creased by an amount equal to 20 percent of 

13 the amount determined under paragraph 

14 (3)(C)(ii). 

15 ‘‘(B) USE OF INCREASED AMOUNT.— 

16 ‘‘(i) IN GENERAL.—The amount of 

17 the increase under subparagraph (A) for 

18 any calendar year may only be allocated to 

19 buildings located in a rural area or 

20 exurban area. 

21 ‘‘(ii) RURAL AREA.—For purposes of 

22 clause (i), the term ‘rural area’ means any 

23 non-metropolitan area, or any rural area 

24 as defined by section 520 of the Housing 

25 Act of 1949, which is identified by the 


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1 qualified allocation plan under subsection 

2 (l)(1)(B). 

3 ‘‘(iii) EXURBAN AREA.—For purposes 

4 of clause (i), the term ‘exurban area’ has 

5 the meaning given such term by the Sec6 retary after consultation with the Bureau 

7 of the Census. 

8 ‘‘(8) OTHER DEFINITIONS.—For purposes of 

9 this subsection— 

10 ‘‘(A) HOUSING CREDIT AGENCY.—The 

11 term ‘housing credit agency’ means any agency 

12 authorized to carry out this subsection. 

13 ‘‘(B) POSSESSIONS TREATED AS STATES.— 

14 The term ‘State’ includes a possession of the 

15 United States. 

16 ‘‘(9) CREDIT FOR BUILDINGS FINANCED BY

17 TAX-EXEMPT BONDS SUBJECT TO VOLUME CAP NOT

18 TAKEN INTO ACCOUNT.—Rules similar to the rules 

19 of subsections (h)(4), (m)(1)(D), and (m)(2)(D) of 

20 section 42 shall apply for purposes of this sub21 section. 

22 ‘‘(10) ELECTION TO TRANSFER STATE HOUSING

23 CREDIT CEILING FOR ALLOCATIONS TO LOW-INCOME

24 BUILDINGS.— 


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1 ‘‘(A) IN GENERAL.—If a State housing 

2 credit agency makes an election under this 

3 paragraph with respect to a calendar year— 

4 ‘‘(i) the State housing credit ceiling 

5 for such calendar year under paragraph 

6 (3) (determined before application of para7 graph (7)) shall be reduced by the amount 

8 specified in such election, 

9 ‘‘(ii) the amount determined under 

10 paragraph (7) for such calendar year shall 

11 be reduced by the amount specified in such 

12 election, and 

13 ‘‘(iii) the amount determined under 

14 section 42(h)(3)(C)(ii) for such calendar 

15 year shall be increased by the sum of the 

16 amounts specified in clauses (i) and (ii), 

17 except that any amount specified under 

18 clause (ii)— 

19 ‘‘(I) may only be allocated under 

20 such section to qualified low-income 

21 buildings (as defined in section 42) lo22 cated in a rural area or exurban area 

23 (as defined in paragraph (7)), and 

24 ‘‘(II) shall not be taken into ac25 count for purposes of determining the 


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1 unused housing credit ceiling under 

2 the second sentence of section 

3 42(h)(3)(C). 

4 ‘‘(B) TIME AND MANNER FOR MAKING

5 ELECTION.— 

6 ‘‘(i) IN GENERAL.—An election under 

7 this paragraph— 

8 ‘‘(I) shall be made before the end 

9 of the calendar year with respect to 

10 which such election applies, 

11 ‘‘(II) shall be made in such man12 ner as specified by the Secretary, and 

13 ‘‘(III) shall separately specify the 

14 amount of reductions to be made 

15 under paragraph (3) and paragraph 

16 (7). 

17 ‘‘(ii) FREQUENCY.—A State housing 

18 credit agency may make more than one 

19 election under this section with respect to 

20 any calendar year, and any such election, 

21 once made, shall be revocable only if such 

22 revocation is made before the end of the 

23 calendar year with respect to which such 

24 election is made. 


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1 ‘‘(C) LIMITATION.—The aggregate amount 

2 specified in elections under this paragraph with 

3 respect to any State housing credit agency for 

4 calendar year shall not exceed the sum of— 

5 ‘‘(i) the amount determined under 

6 paragraph (3)(C)(ii) for such calendar 

7 year, plus 

8 ‘‘(ii) the amount determined under 

9 paragraph (7) for such calendar year. 

10 ‘‘(i) DEFINITIONS AND SPECIAL RULES.—For pur11 poses of this section— 

12 ‘‘(1) WORKING FAMILIES UNIT.— 

13 ‘‘(A) IN GENERAL.—The term ‘working 

14 families unit’ means any unit in a building if— 

15 ‘‘(i) such unit is rent-restricted (as de16 fined in subsection (g)(2)), and 

17 ‘‘(ii) the individuals occupying such 

18 unit meet the income limitation applicable 

19 under subsection (g)(1) to the project of 

20 which such building is a part. 

21 ‘‘(B) EXCEPTIONS.— 

22 ‘‘(i) EXCLUSION OF LOW-INCOME

23 UNITS.—A unit shall not be treated as a 

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1 income unit (as defined under section 

2 42(i)(3)). 

3 ‘‘(ii) UNIT MUST BE SUITABLE FOR

4 PERMANENT OCCUPANCY.— 

5 ‘‘(I) IN GENERAL.—A unit shall 

6 not be treated as a working families 

7 unit unless the unit is suitable for oc8 cupancy and used other than on a 

9 transient basis. 

10 ‘‘(II) SUITABILITY FOR OCCU11 PANCY.—For purposes of subclause 

12 (I), the suitability of a unit for occu13 pancy shall be determined under regu14 lations prescribed by the Secretary 

15 taking into account local health, safe16 ty, and building codes. 

17 ‘‘(III) SINGLE-ROOM OCCUPANCY

18 UNITS.—For purposes of subclause 

19 (I), a single-room occupancy unit shall 

20 not be treated as used on a transient 

21 basis merely because it is rented on a 

22 month-by-month basis. 

23 ‘‘(C) SPECIAL RULE FOR BUILDINGS HAV24 ING 4 OR FEWER UNITS.—In the case of any 

25 building which has 4 or fewer residential rental 


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1 units, no unit in such building shall be treated 

2 as a working families unit if the units in such 

3 building are owned by— 

4 ‘‘(i) any individual who occupies a res5 idential unit in such building, or 

6 ‘‘(ii) any person who is related (as de7 fined in subsection (d)(2)(D)(ii)) to such 

8 individual. 

9 ‘‘(D) RULES RELATING TO STUDENTS.— 

10 ‘‘(i) IN GENERAL.—A unit occupied 

11 solely by individuals who— 

12 ‘‘(I) have not attained age 24, 

13 and 

14 ‘‘(II) are enrolled in a full-time 

15 course of study at an institution of 

16 higher education (as defined in section 

17 3304(f)), 

18 shall not be treated as a working families 

19 unit. 

20 ‘‘(ii) EXCEPTION FOR CERTAIN FED21 ERAL PROGRAMS.—In the case of a Feder22 ally-assisted building (as defined in sub23 section (d)(6)(C)(i) of section 42), clause 

24 (i) shall not apply to a unit all of the occu25 pants of which meet all applicable requireVerDate Sep 11 2014 18:38 Sep 09, 2024 Jkt 049200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H9380.IH H9380

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1 ments under the housing program de2 scribed in such subsection through which 

3 the building is assisted, financed, or oper4 ated. 

5 ‘‘(iii) OTHER EXCEPTIONS.—Clause 

6 (i) shall not apply to a unit occupied by an 

7 individual who— 

8 ‘‘(I) is married, if such individ9 ual’s spouse also occupies the unit, 

10 ‘‘(II) is a person with disabilities 

11 (as defined in section 3(b)(3)(E) of 

12 the United States Housing Act of 

13 1937), 

14 ‘‘(III) is a veteran (as defined in 

15 section 101(2) of title 38, United 

16 States Code), 

17 ‘‘(IV) has one or more qualifying 

18 children (as defined in section 

19 152(c)), if such children also occupy 

20 the unit, the individual is not a de21 pendent (as defined in section 152, 

22 determined without regard to sub23 sections (b)(1), (b)(2), and (d)(1)(B) 

24 thereof) of another individual, and 

25 such children are not claimed as deVerDate Sep 11 2014 18:38 Sep 09, 2024 Jkt 049200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\H9380.IH H9380

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1 pendents (as so defined) of another 

2 individual, or 

3 ‘‘(V) is, or was immediately prior 

4 to attaining the age of majority— 

5 ‘‘(aa) an emancipated minor 

6 or in legal guardianship as deter7 mined by a court of competent 

8 jurisdiction in the individual’s 

9 State of legal residence, 

10 ‘‘(bb) under the care and 

11 placement responsibility of the 

12 State agency responsible for ad13 ministering a plan under part B 

14 or part E of title IV of the Social 

15 Security Act, or 

16 ‘‘(cc) was an unaccompanied 

17 youth (within the meaning of sec18 tion 725(6) of the McKinney19 Vento Homeless Assistance Act 

20 (42 U.S.C. 11434a(6))) or a 

21 homeless child or youth (within 

22 the meaning of section 725(2) of 

23 such Act (42 U.S.C. 

24 11434a(2))). 


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1 ‘‘(E) OWNER-OCCUPIED BUILDINGS HAV2 ING 4 OR FEWER UNITS ELIGIBLE FOR CREDIT

3 WHERE DEVELOPMENT PLAN.— 

4 ‘‘(i) IN GENERAL.—Subparagraph (C) 

5 shall not apply to the acquisition or reha6 bilitation of a building pursuant to a devel7 opment plan of action sponsored by a 

8 State or local government or a qualified 

9 nonprofit organization. 

10 ‘‘(ii) LIMITATION ON CREDIT.—In the 

11 case of a building to which clause (i) ap12 plies, the applicable fraction shall not ex13 ceed 80 percent of the unit fraction. 

14 ‘‘(iii) CERTAIN UNRENTED UNITS

15 TREATED AS OWNER-OCCUPIED.—In the 

16 case of a building to which clause (i) ap17 plies, any unit which is not rented for 90 

18 days or more shall be treated as occupied 

19 by the owner of the building as of the 1st 

20 day it is not rented. 

21 ‘‘(2) NEW BUILDING.—The term ‘new building’ 

22 means a building the original use of which begins 

23 with the taxpayer. 


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1 ‘‘(3) EXISTING BUILDING.—The term ‘existing 

2 building’ means any building which is not a new 

3 building. 

4 ‘‘(4) APPLICATION TO ESTATES AND TRUSTS.— 

5 In the case of an estate or trust, the amount of the 

6 credit determined under subsection (a) shall be ap7 portioned between the estate or trust and the bene8 ficiaries on the basis of the income of the estate or 

9 trust allocable to each. 

10 ‘‘(5) IMPACT OF TENANT’S OPTION TO ACQUIRE

11 PROPERTY.— 

12 ‘‘(A) IN GENERAL.—No Federal income 

13 tax benefit shall fail to be allowable to the tax14 payer with respect to any qualified working 

15 families building merely by reason of an option 

16 held by the tenants (in cooperative form or oth17 erwise) or resident management corporation of 

18 such building or by a qualified nonprofit organi19 zation or government agency to purchase the 

20 property or all of the partnership interests 

21 (other than interests of the person exercising 

22 such option or a related party thereto (within 

23 the meaning of section 267(b) or 707(b)(1))) 

24 relating to the property after the close of the 

25 credit period for a price which is not less than 


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1 the minimum purchase price determined under 

2 subparagraph (B). 

3 ‘‘(B) MINIMUM PURCHASE PRICE.—For 

4 purposes of subparagraph (A), the minimum 

5 purchase price under this subparagraph is an 

6 amount equal to the principal amount of out7 standing indebtedness secured by the building 

8 (other than indebtedness incurred within the 5- 

9 year period ending on the date of the sale to 

10 the tenants). In the case of a purchase of a 

11 partnership interest, the minimum purchase 

12 price is an amount equal to such interest’s rat13 able share of the amount determined under the 

14 preceding sentence. 

15 ‘‘(6) TREATMENT OF RURAL PROJECTS.—For 

16 purposes of this section, in the case of any project 

17 for residential rental property located in a rural area 

18 (as defined in section 520 of the Housing Act of 

19 1949), any income limitation measured by reference 

20 to area median gross income shall be measured by 

21 reference to the greater of area median gross income 

22 or national non-metropolitan median income. 

23 ‘‘(7) DETERMINATION OF WHETHER BUILDING

24 IS FEDERALLY SUBSIDIZED.— 


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1 ‘‘(A) IN GENERAL.—Except as otherwise 

2 provided in this paragraph, for purposes of this 

3 section, a project shall be treated as Federally 

4 subsidized for any taxable year if, at any time 

5 during such taxable year or any prior taxable 

6 year, there is or was outstanding any obligation 

7 the interest on which is exempt from tax under 

8 section 103 the proceeds of which are or were 

9 used (directly or indirectly) with respect to such 

10 project or the operation thereof. 

11 ‘‘(B) SPECIAL RULE FOR SUBSIDIZED CON12 STRUCTION FINANCING.—Subparagraph (A) 

13 shall not apply to any tax-exempt obligation 

14 used to provide construction financing for any 

15 building if— 

16 ‘‘(i) such obligation (when issued) 

17 identified the building for which the pro18 ceeds of such obligation would be used, 

19 and 

20 ‘‘(ii) such obligation is redeemed be21 fore such building is placed in service. 

22 ‘‘(8) REDUCTION IN BASIS.—In the case of any 

23 building for which a credit is allowable under this 

24 section and section 42, the basis of the building shall 


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1 be reduced by the amount of such credit allowed 

2 under subsection (a). 

3 ‘‘(j) APPLICATION OF AT-RISK RULES.—For pur4 poses of this section— 

5 ‘‘(1) IN GENERAL.—Except as otherwise pro6 vided in this subsection, rules similar to the rules of 

7 section 49(a)(1) (other than subparagraphs 

8 (D)(ii)(II) and (D)(iv)(I) thereof), section 49(a)(2), 

9 and section 49(b)(1) shall apply in determining the 

10 qualified basis of any building in the same manner 

11 as such sections apply in determining the credit base 

12 of property. 

13 ‘‘(2) SPECIAL RULES FOR DETERMINING QUALI14 FIED PERSON.—For purposes of paragraph (1)— 

15 ‘‘(A) IN GENERAL.—If the requirements of 

16 subparagraphs (B), (C), and (D) are met with 

17 respect to any financing borrowed from a quali18 fied nonprofit organization, the determination 

19 of whether such financing is qualified commer20 cial financing with respect to any qualified 

21 working families building shall be made without 

22 regard to whether such organization— 

23 ‘‘(i) is actively and regularly engaged 

24 in the business of lending money, or 


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1 ‘‘(ii) is a person described in section 

2 49(a)(1)(D)(iv)(II). 

3 ‘‘(B) FINANCING SECURED BY PROP4 ERTY.—The requirements of this subparagraph 

5 are met with respect to any financing if such fi6 nancing is secured by the qualified working 

7 families building, except that this subparagraph 

8 shall not apply in the case of a federally as9 sisted building described in section 42(d)(6)(C) 

10 if— 

11 ‘‘(i) a security interest in such build12 ing is not permitted by a Federal agency 

13 holding or insuring the mortgage secured 

14 by such building, and 

15 ‘‘(ii) the proceeds from the financing 

16 (if any) are applied to acquire or improve 

17 such building. 

18 ‘‘(C) PORTION OF BUILDING ATTRIB19 UTABLE TO FINANCING.—The requirements of 

20 this subparagraph are met with respect to any 

21 financing for any taxable year in the credit pe22 riod if, as of the close of such taxable year, not 

23 more than 60 percent of the eligible basis of the 

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1 cipal and interest of any governmental financ2 ing which is part of a wrap-around mortgage 

3 involving such financing). 

4 ‘‘(D) REPAYMENT OF PRINCIPAL AND IN5 TEREST.—The requirements of this subpara6 graph are met with respect to any financing if 

7 such financing is fully repaid on or before the 

8 earliest of— 

9 ‘‘(i) the date on which such financing 

10 matures, 

11 ‘‘(ii) the 90th day after the close of 

12 the credit period with respect to the quali13 fied working families building, or 

14 ‘‘(iii) the date of its refinancing or the 

15 sale of the building to which such financ16 ing relates. 

17 In the case of a qualified nonprofit organization 

18 which is not described in section 

19 49(a)(1)(D)(iv)(II) with respect to a building, 

20 clause (ii) of this subparagraph shall be applied 

21 as if the date described therein were the 90th 

22 day after the earlier of the date the building 

23 ceases to be a qualified working families build24 ing or the date which is 15 years after the close 

25 of a credit period with respect thereto. 


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1 ‘‘(3) PRESENT VALUE OF FINANCING.—If the 

2 rate of interest on any financing described in para3 graph (2)(A) is less than the rate which is 1 per4 centage point below the applicable Federal rate as of 

5 the time such financing is incurred, then the quali6 fied basis (to which such financing relates) of the 

7 qualified working families building shall be the 

8 present value of the amount of such financing, using 

9 as the discount rate such applicable Federal rate. 

10 For purposes of the preceding sentence, the rate of 

11 interest on any financing shall be determined by 

12 treating interest to the extent of government sub13 sidies as not payable. 

14 ‘‘(4) FAILURE TO FULLY REPAY.— 

15 ‘‘(A) IN GENERAL.—To the extent that the 

16 requirements of paragraph (2)(D) are not met, 

17 then the taxpayer’s tax under this chapter for 

18 the taxable year in which such failure occurs 

19 shall be increased by an amount equal to the 

20 applicable portion of the credit under this sec21 tion with respect to such building, increased by 

22 an amount of interest for the period— 

23 ‘‘(i) beginning with the due date for 

24 the filing of the return of tax imposed by 


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1 chapter 1 for the 1st taxable year for 

2 which such credit was allowable, and 

3 ‘‘(ii) ending with the due date for the 

4 taxable year in which such failure occurs, 

5 determined by using the underpayment rate and 

6 method under section 6621. 

7 ‘‘(B) APPLICABLE PORTION.—For pur8 poses of subparagraph (A), the term ‘applicable 

9 portion’ means the aggregate decrease in the 

10 credits allowed to a taxpayer under section 38 

11 for all prior taxable years which would have re12 sulted if the eligible basis of the building were 

13 reduced by the amount of financing which does 

14 not meet requirements of paragraph (2)(D). 

15 ‘‘(C) CERTAIN RULES TO APPLY.—Rules 

16 similar to the rules of subparagraphs (A) and 

17 (D) of section 42(j)(4) shall apply for purposes 

18 of this subsection. 

19 ‘‘(k) CERTIFICATIONS AND OTHER REPORTS TO SEC20 RETARY.— 

21 ‘‘(1) CERTIFICATION WITH RESPECT TO 1ST

22 YEAR OF CREDIT PERIOD.—Following the close of 

23 the 1st taxable year in the credit period with respect 

24 to any qualified working families building, the tax25 payer shall certify to the Secretary (at such time 


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1 and in such form and in such manner as the Sec2 retary prescribes)— 

3 ‘‘(A) the taxable year, and calendar year, 

4 in which such building was placed in service, 

5 ‘‘(B) the adjusted basis and eligible basis 

6 of such building as of the close of the 1st year 

7 of the credit period, 

8 ‘‘(C) the maximum applicable percentage 

9 and qualified basis permitted to be taken into 

10 account by the appropriate housing credit agen11 cy under subsection (h), and 

12 ‘‘(D) such other information as the Sec13 retary may require. 

14 In the case of a failure to make the certification re15 quired by the preceding sentence on the date pre16 scribed therefor, unless it is shown that such failure 

17 is due to reasonable cause and not to willful neglect, 

18 no credit shall be allowable by reason of subsection 

19 (a) with respect to such building for any taxable 

20 year ending before such certification is made. 

21 ‘‘(2) ANNUAL REPORTS TO THE SECRETARY.— 

22 The Secretary may require taxpayers to submit an 

23 information return (at such time and in such form 

24 and manner as the Secretary prescribes) for each 

25 taxable year setting forth— 


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1 ‘‘(A) the qualified basis for the taxable 

2 year of each qualified working families building 

3 of the taxpayer, 

4 ‘‘(B) the information described in para5 graph (1)(C) for the taxable year, and 

6 ‘‘(C) such other information as the Sec7 retary may require. 

8 The penalty under section 6652(j) shall apply to any 

9 failure to submit the return required by the Sec10 retary under the preceding sentence on the date pre11 scribed therefor. 

12 ‘‘(3) ANNUAL REPORTS FROM HOUSING CREDIT

13 AGENCIES.—Each agency which allocates any hous14 ing credit amount to any building for any calendar 

15 year shall submit to the Secretary (at such time and 

16 in such manner as the Secretary shall prescribe) an 

17 annual report specifying— 

18 ‘‘(A) the amount of housing credit amount 

19 allocated to each building for such year, 

20 ‘‘(B) sufficient information to identify each 

21 such building and the taxpayer with respect 

22 thereto, and 

23 ‘‘(C) such other information as the Sec24 retary may require. 


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1 The penalty under section 6652(j) shall apply to any 

2 failure to submit the report required by the pre3 ceding sentence on the date prescribed therefor. 

4 ‘‘(l) RESPONSIBILITIES OF HOUSING CREDIT AGEN5 CIES.— 

6 ‘‘(1) PLANS FOR ALLOCATION OF CREDIT

7 AMONG PROJECTS.— 

8 ‘‘(A) IN GENERAL.—Notwithstanding any 

9 other provision of this section, the housing cred10 it dollar amount with respect to any building 

11 shall be zero unless— 

12 ‘‘(i) such amount was allocated pursu13 ant to a qualified allocation plan of the 

14 housing credit agency which is approved by 

15 the governmental unit (in accordance with 

16 rules similar to the rules of section 

17 42(m)(1)) of which such agency is a part, 

18 ‘‘(ii) a comprehensive market study of 

19 the housing needs of working family indi20 viduals in the area to be served by the 

21 project is conducted before the credit allo22 cation is made and at the developer’s ex23 pense by a disinterested party who is ap24 proved by such agency, and 


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1 ‘‘(iii) a written explanation is available 

2 to the general public for any allocation of 

3 a housing credit dollar amount which is 

4 not made in accordance with established 

5 priorities and selection criteria of the hous6 ing credit agency. 

7 ‘‘(B) QUALIFIED ALLOCATION PLAN.—For 

8 purposes of this paragraph, the term ‘qualified 

9 allocation plan’ means any plan— 

10 ‘‘(i) which sets forth selection criteria 

11 to be used to determine housing priorities 

12 of the housing credit agency which are ap13 propriate to local conditions, 

14 ‘‘(ii) which also gives preference in al15 locating housing credit dollar amounts 

16 among selected projects to— 

17 ‘‘(I) projects obligated to serve 

18 qualified tenants for the longest peri19 ods, 

20 ‘‘(II) projects in areas with insuf21 ficient supply of housing affordable to 

22 median income households, 

23 ‘‘(III) projects which target hous24 ing to tenants at a range of incomes 


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1 between 60 and 100 percent of area 

2 median gross income, and 

3 ‘‘(IV) projects located near tran4 sit hubs, and 

5 ‘‘(iii) which provides a procedure that 

6 the agency (or an agent or other private 

7 contractor of such agency) will follow in 

8 monitoring for noncompliance with the 

9 provisions of this section and in notifying 

10 the Internal Revenue Service of such non11 compliance which such agency becomes 

12 aware of and in monitoring for noncompli13 ance with habitability standards through 

14 regular site visits. 

15 ‘‘(C) CERTAIN SELECTION CRITERIA MUST

16 BE USED.—The selection criteria set forth in a 

17 qualified allocation plan must include— 

18 ‘‘(i) project location, 

19 ‘‘(ii) housing needs characteristics, 

20 ‘‘(iii) project characteristics, including 

21 whether the project includes the use of ex22 isting housing as part of a community revi23 talization plan, 

24 ‘‘(iv) sponsor characteristics, 


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1 ‘‘(v) tenant populations with special 

2 housing needs, 

3 ‘‘(vi) tenant populations of individuals 

4 with children, 

5 ‘‘(vii) projects intended for eventual 

6 tenant ownership, 

7 ‘‘(viii) the energy efficiency of the 

8 project, and 

9 ‘‘(ix) the historic nature of the 

10 project. 

11 ‘‘(D) CERTAIN SELECTION CRITERIA PRO12 HIBITED.—The selection criteria set forth in a 

13 qualified allocation plan shall not include a re14 quirement of local approval or local contribu15 tions, either as a threshold qualification re16 quirement or as part of a point system to be 

17 considered for allocations of housing credit dol18 lar amount. 

19 ‘‘(2) CREDIT ALLOCATED TO BUILDING NOT TO

20 EXCEED AMOUNT NECESSARY TO ASSURE PROJECT

21 FEASIBILITY.— 

22 ‘‘(A) IN GENERAL.—The housing credit 

23 dollar amount allocated to a project shall not 

24 exceed the amount the housing credit agency 

25 determines is necessary for the financial feasiVerDate Sep 11 2014 18:38 Sep 09, 2024 Jkt 049200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\H9380.IH H9380

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1 bility of the project and its viability as a quali2 fied working families housing project through3 out the credit period. 

4 ‘‘(B) AGENCY EVALUATION.—In making 

5 the determination under subparagraph (A), the 

6 housing credit agency shall consider— 

7 ‘‘(i) the sources and uses of funds and 

8 the total financing planned for the project, 

9 ‘‘(ii) any proceeds or receipts expected 

10 to be generated by reason of tax benefits, 

11 ‘‘(iii) the percentage of the housing 

12 credit dollar amount used for project costs 

13 other than the cost of intermediaries, and 

14 ‘‘(iv) the reasonableness of the devel15 opmental and operational costs of the 

16 project. 

17 Clause (iii) shall not be applied so as to impede 

18 the development of projects in hard-to-develop 

19 areas. Such a determination shall not be con20 strued to be a representation or warranty as to 

21 the feasibility or viability of the project. 

22 ‘‘(C) DETERMINATION MADE WHEN CRED23 IT AMOUNT APPLIED FOR AND WHEN BUILDING

24 PLACED IN SERVICE.— 


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1 ‘‘(i) IN GENERAL.—A determination 

2 under subparagraph (A) shall be made as 

3 of each of the following times: 

4 ‘‘(I) The application for the 

5 housing credit dollar amount. 

6 ‘‘(II) The allocation of the hous7 ing credit dollar amount. 

8 ‘‘(III) The date the building is 

9 placed in service. 

10 ‘‘(ii) CERTIFICATION AS TO AMOUNT

11 OF OTHER SUBSIDIES.—Prior to each de12 termination under clause (i), the taxpayer 

13 shall certify to the housing credit agency 

14 the full extent of all Federal, State, and 

15 local subsidies which apply (or which the 

16 taxpayer expects to apply) with respect to 

17 the building. 

18 ‘‘(m) REGULATIONS.—The Secretary shall prescribe 

19 such regulations as may be necessary or appropriate to 

20 carry out the purposes of this section, including— 

21 ‘‘(1) regulations dealing with— 

22 ‘‘(A) projects which include more than 1 

23 building or only a portion of a building, or 

24 ‘‘(B) buildings which are placed in service 

25 in portions, 


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1 ‘‘(2) regulations providing for the application of 

2 this section to short taxable years, 

3 ‘‘(3) regulations preventing the avoidance of the 

4 rules of this section, 

5 ‘‘(4) regulations providing the opportunity for 

6 housing credit agencies to correct administrative er7 rors and omissions with respect to allocations and 

8 record keeping within a reasonable period after their 

9 discovery, taking into account the availability of reg10 ulations and other administrative guidance from the 

11 Secretary, and 

12 ‘‘(5) in consultation with the Secretary of 

13 Housing and Urban Development, regulations or 

14 guidance to promote uniform definitions and to 

15 streamline requirements for with respect to qualified 

16 working families buildings which receive funding 

17 from programs administrated by the Department of 

18 Housing and Urban Development, including pro19 grams authorized by Native American Housing As20 sistance and Self-Determination Act of 1996.’’. 

21 (b) TREATMENT AS PART OF GENERAL BUSINESS

22 CREDIT.—Section 38(b) of the Internal Revenue Code of 

23 1986 is amended by striking ‘‘plus’’ at the end of para24 graph (40), by striking the period at the end of paragraph 


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1 (41) and inserting ‘‘, plus’’, and by adding at the end the 

2 following new paragraph: 

3 ‘‘(42) the working families housing credit deter4 mined under section 42A(a).’’. 

5 (c) REDUCTION IN BASIS.—Section 1016(a) of the 

6 Internal Revenue Code of 1986 is amended— 

7 (1) by striking ‘‘and’’ at the end of paragraph 

8 (37); 

9 (2) by redesignating paragraph (38) as para10 graph (39); and 

11 (3) by inserting after paragraph (37) the fol12 lowing new paragraph: 

13 ‘‘(38) to the extent provided in section 

14 42A(i)(8), and’’. 

15 (d) TREATMENT UNDER BASE EROSION MINIMUM

16 TAX.—Section 59A(b)(4) of he Internal Revenue Code of 

17 1986 is amended by redesignating subparagraphs (B) and 

18 (C) as subparagraphs (C) and (D), respectively, and by 

19 inserting after subparagraphs (A) the following new sub20 paragraph: 

21 ‘‘(B) the working families housing credit 

22 determined under section 42A(a),’’. 

23 (e) CONFORMING AMENDMENTS RELATING TO LOW24 INCOME HOUSING TAX CREDIT.—Section 42(n) of the In25 ternal Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘regulations’’ in the matter pre2 ceding paragraph (1), 

3 (2) by inserting ‘‘regulations’’ before ‘‘dealing 

4 with’’ in paragraph (1), 

5 (3) by inserting ‘‘regulations’’ before ‘‘pro6 viding’’ in paragraphs (2) and (4), 

7 (4) by inserting ‘‘regulations’’ before ‘‘pre8 venting’’ in paragraph (3), 

9 (5) by striking ‘‘and’’ at the end of paragraph 

10 (3), 

11 (6) by striking the period at the end of para12 graph (4) and inserting ‘‘, and’’, and 

13 (7) by adding at the end the following new 

14 paragraph: 

15 ‘‘(5) in consultation with the Secretary of 

16 Housing and Urban Development, regulations or 

17 guidance to promote uniform definitions and to 

18 streamline requirements with respect to qualified 

19 low-income buildings which receive funding from 

20 programs administrated by the Department of Hous21 ing and Urban Development, including programs au22 thorized by Native American Housing Assistance 

23 and Self-Determination Act of 1996.’’. 

24 (f) CONFORMING AMENDMENTS.— 


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1 (1) Section 45L(e) of the Internal Revenue 

2 Code of 1986 is amended by inserting ‘‘or 42A’’ 

3 after ‘‘42’’. 

4 (2) Section 50(c)(3)(C) of such Code is amend5 ed by inserting ‘‘or 42A’’ after ‘‘42’’. 

6 (3) Section 55(c)(1) of such Code is amended 

7 by inserting ‘‘42A(j),’’ before ‘‘45(e)(11)(C)’’. 

8 (4) Subsections (i)(3)(C), (i)(6)(B)(i), and 

9 (k)(1) of section 469 of such Code are each amended 

10 by inserting ‘‘or 42A’’ after ‘‘42’’. 

11 (5) The table of sections for subpart D of part 

12 IV of subchapter A of chapter 1 of such Code is 

13 amended by inserting after the item relating to sec14 tion 42 the following new item: 

‘‘Sec. 42A. Working families housing credit.’’. 

15 (g) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to buildings placed in service after 

17 December 31, 2024, in taxable years ending after such 

18 date. 

19 SEC. 4. LOANS AND GRANTS FOR INFRASTRUCTURE 

20 PROJECTS IN CONNECTION WITH QUALIFIED 

21 WORKING FAMILIES HOUSING PROJECTS. 

22 (a) IN GENERAL.—The Secretary shall make grants 

23 and below-market-rate loans (as the Secretary determines 

24 appropriate) to local governments in rural and exurban 

25 areas for covered infrastructure projects carried out in 


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1 connection with the development of qualified working fam2 ilies housing projects. 

3 (b) COVERED INFRASTRUCTURE PROJECTS.—For 

4 purposes of this section— 

5 (1) IN GENERAL.—The term ‘‘covered infra6 structure project’’ means projects for electricity, 

7 waters, sewers, local access roads, and such other 

8 projects as the Secretary determines appropriate. 

9 (2) CLEAN ENERGY PRIORITIZATION.—With re10 spect to any infrastructure project for electricity, the 

11 Secretary shall give priority to clean energy projects. 

12 (c) OTHER DEFINITIONS AND SPECIAL RULES.— 

13 Terms used in this section which are also used in section 

14 42A of the Internal Revenue Code of 1986 shall have the 

15 same meaning when used in this section as when used in 

16 such section of such Code. Requirements similar to the 

17 requirements of section 45(b)(7) of such Code shall apply 

18 with respect to infrastructure projects with respect to 

19 which grants or loans are made under this section. 

20 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated $100,000,000 to carry 

22 out the purposes of this section. 

Æ 


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