II 

118TH CONGRESS 

1ST SESSION S. 680 

To provide rental vouchers for the homeless, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2023 

Mr. WYDEN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To provide rental vouchers for the homeless, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Decent, Affordable, Safe Housing for All Act’’ or the 

6 ‘‘DASH Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—HOUSING ASSISTANCE 

Subtitle A—General Housing Assistance 

Sec. 111. Rental vouchers for the homeless. 


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Sec. 112. Land acquisition and construction. 

Sec. 113. Modular construction pilot program. 

Sec. 114. Supporting pro-housing development. 

Sec. 115. Permanent authorization of appropriations for McKinney-Vento 

Homeless Assistance Act grants. 

Subtitle B—Rural Housing Assistance 

Sec. 121. Rural housing reinvestment. 

Sec. 122. Permanent establishment of housing preservation and revitalization 

program. 

Sec. 123. Eligibility for rural housing vouchers. 

Sec. 124. Amount of voucher assistance. 

Sec. 125. Use of available rental assistance. 

Sec. 126. Funding for multifamily technical improvements. 

Sec. 127. Plan for preserving affordability of rental projects. 

TITLE II—REVENUE PROVISIONS 

Sec. 201. Tax-exempt bond financing requirement. 

Sec. 202. Increases in State allocations. 

Sec. 203. Buildings designated to serve extremely low-income households. 

Sec. 204. Inclusion of Indian areas as difficult development areas for purposes 

of certain buildings. 

Sec. 205. Inclusion of rural areas as difficult development areas. 

Sec. 206. Increase in credit for bond-financed projects designated by housing 

credit agency. 

Sec. 207. Repeal of qualified contract option. 

Sec. 208. Modification and clarification of rights relating to building purchase. 

Sec. 209. Prohibition of local approval and contribution requirements. 

Sec. 210. Increase in credit for low-income housing supportive services. 

Sec. 211. Study of tax incentives for the conversion of commercial property to 

affordable housing. 

Sec. 212. Renters credit. 

Sec. 213. Middle-income housing tax credit. 

Sec. 214. Neighborhood homes credit. 

Sec. 215. First-time homebuyer refundable credit. 

1 TITLE I—HOUSING ASSISTANCE 

2 Subtitle A—General Housing 

3 Assistance 

4 SEC. 111. RENTAL VOUCHERS FOR THE HOMELESS. 

5 (a) IN GENERAL.—Section 8(o) of the United States 

6 Housing Act of 1937 (42 U.S.C. 1437f(o)) is amended 

7 by adding at the end the following: 


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1 ‘‘(22) RENTAL VOUCHERS FOR THE HOME2 LESS.— 

3 ‘‘(A) DEFINITIONS.—In this paragraph: 

4 ‘‘(i) AT RISK OF HOMELESSNESS.— 

5 The term ‘at risk of homelessness’ has the 

6 meaning given the term in section 401(1) 

7 of the McKinney-Vento Homeless Assist8 ance Act (42 U.S.C. 11360), except that 

9 ‘50 percent’ shall be substituted for ‘30 

10 percent’ in subparagraph (A) of that sec11 tion. 

12 ‘‘(ii) CAPACITY-BUILDING PERIOD.— 

13 The term ‘capacity-building period’ means 

14 the 2-year period beginning on the date on 

15 which the formula is established under 

16 subparagraph (E)(ii). 

17 ‘‘(iii) CONTINUUM OF CARE.—The 

18 term ‘continuum of care’ has the meaning 

19 given the term in section 578.3 of title 24, 

20 Code of Federal Regulations, or any suc21 cessor regulation. 

22 ‘‘(iv) ELIGIBLE PUBLIC HOUSING

23 AGENCY.—The term ‘eligible public hous24 ing agency’ means a public housing agency 

25 that— 


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1 ‘‘(I) administers assistance under 

2 this subsection through a contract for 

3 annual contributions entered into with 

4 the Secretary; 

5 ‘‘(II) has a partnership with a 

6 public child welfare agency and a con7 tinuum of care that— 

8 ‘‘(aa) has a system for iden9 tifying and referring eligible re10 cipients for assistance under this 

11 paragraph from the public hous12 ing agency, including by pro13 viding a written certification that 

14 the eligible recipient is eligible to 

15 receive the assistance; and 

16 ‘‘(bb) will, to the greatest 

17 extent practicable, provide or fa18 cilitate the provision of sup19 portive services to those eligible 

20 recipients; and 

21 ‘‘(III) submits to the Secretary a 

22 statement describing— 

23 ‘‘(aa) how the public hous24 ing agency will connect eligible 

25 recipients with local community 


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1 resources, to the extent available; 

2 and 

3 ‘‘(bb) the plan for use of ca4 pacity-building funding under 

5 subparagraph (E), including— 

6 ‘‘(AA) a timeline for 

7 the use of that funding with8 in the capacity-building pe9 riod; 

10 ‘‘(BB) hiring and per11 sonnel needs; 

12 ‘‘(CC) physical infra13 structure needs; and 

14 ‘‘(DD) technological in15 frastructure needs, including 

16 upgrades to the HMIS, and 

17 any other capacity-related 

18 investments that are nec19 essary to administer assist20 ance under this paragraph. 

21 ‘‘(v) ELIGIBLE RECIPIENT.—The term 

22 ‘eligible recipient’ means any individual or 

23 family experiencing homelessness or at risk 

24 of homelessness with an income that is less 


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1 than 50 percent of the area median in2 come. 

3 ‘‘(vi) EXPERIENCING HOMELESSNESS; 

4 HOMELESS.—The terms ‘experiencing 

5 homelessness’ and ‘homeless’ means an in6 dividual or family who is— 

7 ‘‘(I) living in a place not meant 

8 for human habitation or in an emer9 gency shelter; 

10 ‘‘(II) living in transitional hous11 ing for homeless persons and was 

12 homeless before entering transitional 

13 housing or an emergency shelter; 

14 ‘‘(III) fleeing domestic violence; 

15 or 

16 ‘‘(IV) at risk of homelessness. 

17 ‘‘(vii) HMIS.—The term ‘HMIS’ 

18 means the community-wide homeless man19 agement information system described in 

20 section 402(f)(3)(D) of the McKinney21 Vento Homeless Assistance Act (42 U.S.C. 

22 11360a(f)(3)(D)). 

23 ‘‘(viii) PUBLIC HOUSING AGENCY.— 

24 The term ‘public housing agency’ includes 

25 a tribally designated housing entity. 


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1 ‘‘(ix) REFERRAL.—The term ‘referral’ 

2 means an affirmative connection between 

3 the voucher recipient and the organization 

4 providing services to the voucher recipient. 

5 ‘‘(x) SERVICE COORDINATOR.—The 

6 term ‘service coordinator’ means an indi7 vidual employed directly by a public hous8 ing agency who provides general case man9 agement and referral services to each 

10 voucher recipient served by the public 

11 housing agency, which shall include— 

12 ‘‘(I) an individual intake screen13 ing of each voucher recipient to evalu14 ate the voucher recipient’s need for 

15 supportive services; and 

16 ‘‘(II) referral to outside services, 

17 including cooperation and collabora18 tion with a continuum of care. 

19 ‘‘(xi) SOURCE OF INCOME.—The term 

20 ‘source of income’ means income from any 

21 lawful source, including— 

22 ‘‘(I) income from any legal em23 ployment; and 

24 ‘‘(II) any assistance, benefit, or 

25 subsidy through any Federal, State, 


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1 or local program, whether the pro2 gram is administered by a govern3 mental or nongovernmental entity. 

4 ‘‘(xii) TRIBALLY DESIGNATED HOUS5 ING ENTITY.—The term ‘tribally des6 ignated housing entity’ has the meaning 

7 given the term in section 4 of the Native 

8 American Housing Assistance and Self-De9 termination Act of 1996 (25 U.S.C. 4103). 

10 ‘‘(xiii) VOUCHER RECIPIENT.—The 

11 term ‘voucher recipient’ means an indi12 vidual or family receiving a voucher under 

13 this paragraph. 

14 ‘‘(xiv) YOUTH.—The term ‘youth’ 

15 means an individual under the age of 25. 

16 ‘‘(B) VOUCHERS.— 

17 ‘‘(i) PROVISION OF VOUCHERS.— 

18 ‘‘(I) IN GENERAL.—The Sec19 retary shall provide vouchers for rent20 al assistance on behalf of each eligible 

21 recipient in accordance with this para22 graph. 

23 ‘‘(II) DIRECT APPROPRIATION.— 

24 Subject to subclause (III), there is ap25 propriated, out of any money in the 


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1 Treasury not otherwise appropriated, 

2 for providing rental voucher assistance 

3 under this paragraph for fiscal year 

4 2023 and each fiscal year thereafter— 

5 ‘‘(aa) the amount necessary 

6 to fund the provision of a vouch7 er for rental assistance under 

8 this paragraph on behalf of each 

9 eligible recipient; 

10 ‘‘(bb) the amount necessary 

11 to provide administrative fees 

12 under clause (ii) in connection to 

13 each voucher for rental assistance 

14 provided under this paragraph; 

15 and 

16 ‘‘(cc) the amount necessary 

17 to fund annual renewals of the 

18 vouchers provided under this 

19 paragraph. 

20 ‘‘(III) NUMBER OF VOUCHERS.— 

21 The Secretary shall provide— 

22 ‘‘(aa) 250,000 vouchers 

23 under this paragraph in fiscal 

24 year 2023; and 


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1 ‘‘(bb) 400,000 vouchers 

2 under this paragraph in each fis3 cal year thereafter until the Sec4 retary determines that a smaller 

5 number of vouchers is sufficient 

6 to provide all eligible recipients 

7 with vouchers. 

8 ‘‘(ii) ADMINISTRATIVE FEE FOR AN9 CILLARY COSTS.—The Secretary shall pro10 vide a public housing agency that requests 

11 a voucher under this paragraph an admin12 istrative fee sufficient to provide assistance 

13 to the voucher recipient for security depos14 its, moving costs, first or last month’s 

15 rent, or other significant barriers to estab16 lishing use of the voucher and a lease, in 

17 an amount that is not more than 3 

18 months’ rent for the voucher recipient. 

19 ‘‘(iii) PAYMENT STANDARD.—The 

20 payment standard for a voucher provided 

21 under this paragraph may not exceed 125 

22 percent of the fair market rental in the ju23 risdiction in which the voucher is adminis24 tered. 


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1 ‘‘(iv) SUPPLEMENTAL VOUCHER PAY2 MENT.— 

3 ‘‘(I) IN GENERAL.—An eligible 

4 public housing agency may supple5 ment the amount of a voucher pro6 vided under this paragraph in any 

7 case in which— 

8 ‘‘(aa) the amount of the 

9 voucher is insufficient to cover 

10 the cost of a dwelling unit within 

11 the jurisdiction of the eligible 

12 public housing agency and that 

13 insufficiency may result in a 

14 voucher recipient losing housing 

15 and becoming homeless or dou16 bled up; or 

17 ‘‘(bb) the eligible public 

18 housing agency submits to the 

19 Secretary a waiver request for re20 calculation of the small area fair 

21 market rent applicable to the 

22 dwelling unit, which the Sec23 retary shall approve or deny 

24 within 45 days of submission of 

25 the request. 


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1 ‘‘(II) PAYMENT UPON DENIAL.— 

2 An eligible public housing agency may 

3 supplement the amount of a voucher 

4 under subclause (I) even if the Sec5 retary denies the request submitted 

6 under subclause (I)(aa), provided that 

7 the supplementation of the voucher 

8 amount is necessary to maintain hous9 ing for the voucher recipient. 

10 ‘‘(v) CONDITIONS ON ASSISTANCE.— 

11 Notwithstanding any other provision of 

12 law, the Secretary— 

13 ‘‘(I) may not condition receipt of 

14 a voucher under this paragraph on— 

15 ‘‘(aa) participation in any 

16 service or program; or 

17 ‘‘(bb) the sobriety or lack 

18 thereof of an eligible recipient; 

19 ‘‘(II) except as provided in sub20 clause (III), may not prohibit receipt 

21 of a voucher under this paragraph by 

22 an otherwise eligible recipient due to 

23 any criminal conviction or history of 

24 interaction with the criminal justice 

25 system; and 


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1 ‘‘(III) shall prohibit receipt of a 

2 voucher under this paragraph by indi3 viduals subject to a lifetime registra4 tion requirement under any State sex 

5 offender registration program. 

6 ‘‘(vi) VERIFICATION OF STATEMENT

7 MADE BY ELIGIBLE PUBLIC HOUSING

8 AGENCIES.— 

9 ‘‘(I) IN GENERAL.—Not later 

10 than 30 days after the date on which 

11 an eligible public housing agency sub12 mits the statement required under 

13 subparagraph (A)(iv)(III), the Sec14 retary shall verify the statement. 

15 ‘‘(II) UNSATISFACTORY STATE16 MENT.—If, upon verification of a 

17 statement under subclause (I), the 

18 Secretary determines that the state19 ment is unsatisfactory, the Secretary 

20 shall inform the eligible public hous21 ing agency of that determination and 

22 the manner in which the eligible pub23 lic housing agency may re-submit the 

24 statement. 


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1 ‘‘(vii) IDENTIFICATION OF ELIGIBLE

2 RECIPIENTS.—A public housing agency 

3 shall partner with continuums of care, 

4 public child welfare agencies, street out5 reach providers, health care providers, and 

6 other similar organizations in the State in 

7 which the public housing agency operates 

8 to identify eligible recipients. 

9 ‘‘(viii) REQUIREMENTS FOR ELIGIBLE

10 PUBLIC HOUSING AGENCIES.— 

11 ‘‘(I) IN GENERAL.—Each eligible 

12 public housing agency providing as13 sistance under this paragraph shall— 

14 ‘‘(aa) on an annual basis 

15 and in conjunction with income 

16 reviews for purposes of deter17 mining income eligibility for as18 sistance under this paragraph, 

19 verify the compliance of the eligi20 ble public housing agency with 

21 the eligibility requirements under 

22 this paragraph; and 

23 ‘‘(bb) to the greatest extent 

24 possible— 


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1 ‘‘(AA) work with con2 tinuums of care to ensure 

3 continuity of data collection 

4 under this paragraph; and 

5 ‘‘(BB) utilize the HMIS 

6 to collect and main the in7 formation required to be col8 lected under this paragraph. 

9 ‘‘(II) PRIORITY.—In providing 

10 vouchers under this paragraph, an eli11 gible public housing agency— 

12 ‘‘(aa) shall prioritize the 

13 first vouchers made available 

14 under this section for eligible re15 cipients who are— 

16 ‘‘(AA) unaccompanied 

17 homeless youth; 

18 ‘‘(BB) homeless youth 

19 with minor children; or 

20 ‘‘(CC) families with 

21 minor children experiencing 

22 homelessness; 

23 ‘‘(bb) to the extent possible 

24 considering when the Secretary 

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1 graph, shall provide vouchers to 

2 the eligible recipients described in 

3 item (aa) not later than 1 year 

4 after the end of the capacity5 building period; and 

6 ‘‘(cc) may not issue vouchers 

7 to eligible recipients not de8 scribed in item (aa) until the eli9 gible public housing agency has 

10 issued vouchers to all eligible re11 cipients described in that item. 

12 ‘‘(ix) USE OF VOUCHER UPON EXIT.— 

13 An eligible public housing agency that 

14 issued a voucher to an eligible recipient 

15 that is no longer in use by the eligible re16 cipient may provide the voucher to any 

17 other tenant eligible for tenant-based as18 sistance under this subsection. 

19 ‘‘(C) DATA COLLECTION.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall submit to Congress an annual report 

22 on assistance providing under this para23 graph, which shall include— 

24 ‘‘(I) an assessment of the 

25 progress of States toward housing— 


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1 ‘‘(aa) eligible recipients in 

2 the State; and 

3 ‘‘(bb) the total population of 

4 people experiencing homelessness 

5 in the State; and 

6 ‘‘(II) the information provided 

7 under clause (ii). 

8 ‘‘(ii) INFORMATION FROM PUBLIC

9 HOUSING AGENCIES.—Each eligible public 

10 housing agency administering assistance 

11 under this paragraph shall submit to the 

12 Secretary and to the State in which the 

13 public housing agency is located an annual 

14 report for each fiscal year that includes— 

15 ‘‘(I) the number of voucher re16 cipients, including aggregated demo17 graphic information on the age, sex, 

18 gender identity, sexual orientation, 

19 race, ethnicity, and disability status of 

20 each such recipient in a manner that 

21 does not reveal the personally identifi22 able information of each such recipi23 ent; 

24 ‘‘(II) the number of eligible re25 cipients who applied during the fiscal 


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1 year for assistance under this para2 graph, but were not provided assist3 ance; 

4 ‘‘(III) a brief identification in 

5 each instance described in subclause 

6 (II) of the reason why the eligible 

7 public housing agency was unable to 

8 provide the assistance; and 

9 ‘‘(IV) a description of how the el10 igible public housing agency commu11 nicated or collaborated with public 

12 child welfare agencies and continuums 

13 of care to collect the data described in 

14 subclauses (I) and (II). 

15 ‘‘(D) SUPPORTIVE SERVICES.— 

16 ‘‘(i) ADMINISTRATIVE FEE.— 

17 ‘‘(I) IN GENERAL.—The Sec18 retary shall establish a fee under sub19 section (q) for the costs incurred by 

20 public housing agencies in admin21 istering vouchers under this para22 graph. 

23 ‘‘(II) COSTS.—In establishing the 

24 fee described in subclause (I), the Sec25 retary shall include the costs to public 


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1 housing agencies of employing full2 time or full-time-equivalent service co3 ordinators. 

4 ‘‘(III) AUTHORIZATION OF AP5 PROPRIATIONS.—There is authorized 

6 to be appropriated $300,000,000 for 

7 each of fiscal years 2023 through 

8 2028 for the fee described in sub9 clause (I). 

10 ‘‘(ii) HIRING OF SERVICE COORDINA11 TORS.— 

12 ‘‘(I) IN GENERAL.—An eligible 

13 public housing agency shall hire the 

14 appropriate number of service coordi15 nators to administer supportive serv16 ices under this paragraph in partner17 ship with the public child welfare 

18 agency or continuum of care in a ju19 risdiction. 

20 ‘‘(II) INSUFFICIENT FUNDS.—If 

21 an eligible public housing agency is 

22 unable to hire an appropriate number 

23 of service coordinators under sub24 clause (I) using the fee described in 

25 clause (i)(I)— 


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1 ‘‘(aa) the public housing 

2 agency may request an increased 

3 administrative fee from the Sec4 retary; and 

5 ‘‘(bb) the Secretary shall ap6 prove or deny a request received 

7 under item (aa) within 45 days. 

8 ‘‘(III) REPORT TO CONGRESS.— 

9 Beginning in the first full fiscal year 

10 after the date of enactment of this 

11 paragraph, the Secretary shall submit 

12 an annual report to Congress on re13 quests for increased administrative 

14 fees received from public housing 

15 agencies under subclause (II). 

16 ‘‘(IV) APPROPRIATE NUMBER

17 DEFINED.—For purposes of this 

18 clause, the term ‘appropriate number’, 

19 with respect to service coordinators, 

20 means enough service coordinators so 

21 that each household provided a vouch22 er by a public housing agency under 

23 this paragraph is able to access a 

24 service coordinator for not less than 

25 30 minutes each week. 


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1 ‘‘(iii) PROVISION OF SERVICES.— 

2 Upon intake of an eligible recipient, a pub3 lic housing agency or a public child welfare 

4 agency or continuum of care with which 

5 the public housing agency has partnered 

6 shall— 

7 ‘‘(I) assign the voucher recipient 

8 a case manager or service coordinator; 

9 and 

10 ‘‘(II) provide or secure the provi11 sion of supportive services to con12 tribute to the housing stability of the 

13 voucher recipient, including— 

14 ‘‘(aa) any supportive service, 

15 as defined in section 401 of the 

16 McKinney-Vento Homeless As17 sistance Act (42 U.S.C. 11360); 

18 ‘‘(bb) referrals to health 

19 care providers, including mental 

20 health care providers, dental 

21 health care providers, and vision 

22 health care providers; 

23 ‘‘(cc) referrals to substance 

24 use disorder treatment, including 

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1 grams, relapse prevention, or 

2 medication-assisted treatment; 

3 ‘‘(dd) assistance relating to 

4 enrollment in the Medicare or 

5 Medicaid programs under titles 

6 XVIII and XIX of the Social Se7 curity Act (42 U.S.C. 1395 et 

8 seq., 1396 et seq.), respectively, 

9 and referrals to other services, 

10 including— 

11 ‘‘(AA) the supplemental 

12 nutrition assistance program 

13 under the Food and Nutri14 tion Act of 2008 (7 U.S.C. 

15 2011 et seq.) (commonly 

16 known as the ‘SNAP Pro17 gram’); and 

18 ‘‘(BB) the program of 

19 block grants for States for 

20 temporary assistance for 

21 needy families established 

22 under part A of title IV of 

23 the Social Security Act (42 

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1 monly known as the ‘TANF 

2 Program’); 

3 ‘‘(ee) advising on eligibility 

4 for the family self-sufficiency 

5 program established, credit coun6 seling, and housing counseling 

7 programs; 

8 ‘‘(ff) referrals to education 

9 services, including general edu10 cational development (commonly 

11 known as ‘GED’) preparation 

12 and testing, enrollment in post13 secondary education programs, 

14 and credit recovery; and 

15 ‘‘(gg) facilitation of trans16 portation assistance to any of the 

17 supportive services described in 

18 this subparagraph. 

19 ‘‘(iv) ELIGIBILITY OF PRIVATE NON20 PROFIT ORGANIZATIONS AND FAITH-BASED

21 ORGANIZATIONS.— 

22 ‘‘(I) DEFINITIONS.—In this 

23 clause, the terms ‘eligible entity’ and 

24 ‘private nonprofit organization’ have 

25 the meanings given those terms in 


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1 section 401 of the McKinney-Vento 

2 Homeless Assistance Act (42 U.S.C. 

3 11360). 

4 ‘‘(II) ELIGIBILITY.—Notwith5 standing any other provision of law— 

6 ‘‘(aa) the Secretary shall 

7 provide that private nonprofit or8 ganizations that are eligible enti9 ties, including faith-based private 

10 nonprofit organizations that are 

11 eligible entities, shall be eligible 

12 to— 

13 ‘‘(AA) provide services 

14 described in clause (iii); and 

15 ‘‘(BB) receive amounts 

16 made available to carry out 

17 clause (iii); and 

18 ‘‘(bb) in determining eligi19 bility for amounts made available 

20 to carry out clause (iii), the sta21 tus of an entity as faith-based or 

22 the possibility that an entity may 

23 be faith-based may not be a basis 

24 for any discrimination against 


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1 such entity in any manner or for 

2 any purpose. 

3 ‘‘(v) ACCESS.—Services provided 

4 under this subparagraph shall be available 

5 to voucher recipients with low-to-no barrier 

6 access. 

7 ‘‘(vi) EVALUATION.—An eligible pub8 lic housing agency, public child welfare 

9 agency, or continuum of care described in 

10 clause (iii) shall evaluate each voucher re11 cipient for individual case management 

12 needs under this subparagraph. 

13 ‘‘(E) CAPACITY BUILDING.— 

14 ‘‘(i) AUTHORIZATION OF APPROPRIA15 TIONS.—There is authorized to be appro16 priated to the Secretary $500,000,000 for 

17 each of fiscal years 2023 and 2024 to pro18 vide funding for capacity building to eligi19 ble public housing agencies. 

20 ‘‘(ii) FUNDING FORMULA.—Not later 

21 than 45 days after the date of enactment 

22 of this paragraph, the Secretary shall es23 tablish a formula for allocating the funding 

24 authorized under clause (i) that takes into 

25 account— 


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1 ‘‘(I) the ratio of individuals in 

2 the State in which the eligible public 

3 housing agency operates who are 

4 homeless to the overall population of 

5 the State; 

6 ‘‘(II) the proportion of families in 

7 each State with children experiencing 

8 unsheltered homelessness, as reported 

9 in the State’s most recent point-in10 time count, to the total number of 

11 unsheltered homeless families in the 

12 State as reported in the same point13 in-time count; and 

14 ‘‘(III) the rate of unsheltered 

15 homelessness in each State compared 

16 to each other State, as reported in 

17 each State’s most recent point-in-time 

18 count. 

19 ‘‘(iii) DISBURSEMENT.—Not later 

20 than 30 days after an eligible public hous21 ing agency submits an acceptable state22 ment under subparagraph (A)(iv)(III), the 

23 Secretary shall disburse amounts author24 ized under clause (i) of this subparagraph 


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1 in accordance with the formula established 

2 under clause (ii) of this subparagraph. 

3 ‘‘(iv) MINIMUM AND MAXIMUM ALLO4 CATION.—The Secretary shall ensure 

5 that— 

6 ‘‘(I) each eligible public housing 

7 agency does not receive more than 10 

8 percent of the amount authorized 

9 under clause (i); and 

10 ‘‘(II) each State in which an eli11 gible public housing agency receives 

12 funds under clause (i) does not receive 

13 more than 25 percent of the total 

14 amount authorized under that clause. 

15 ‘‘(v) ELIGIBLE ACTIVITIES.—A recipi16 ent of funds authorized under clause (i) 

17 may only use the funds for— 

18 ‘‘(I) hiring and personnel needs, 

19 such as case managers and housing 

20 placement advisory; 

21 ‘‘(II) physical infrastructure— 

22 ‘‘(aa) including increased of23 fice space or facilities for the pro24 vision of supportive services; and 


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1 ‘‘(bb) not including residen2 tial housing; 

3 ‘‘(III) technological infrastruc4 ture needs, including upgrades to the 

5 HMIS; and 

6 ‘‘(IV) any other capacity-related 

7 investments that are necessary for the 

8 public housing agency to— 

9 ‘‘(aa) develop, acquire, or re10 habilitate housing that is afford11 able to extremely low-income 

12 families, to be made available to 

13 people experiencing homelessness; 

14 or 

15 ‘‘(bb) support the successful 

16 administration of the vouchers 

17 under this paragraph. 

18 ‘‘(vi) REQUIREMENT FOR EXPENDI19 TURE OF FUNDS.—Each eligible public 

20 housing agency that receives funds under 

21 clause (i) shall expend not less than 60 

22 percent of the funding during the 2-year 

23 period following receipt of the funding. 

24 ‘‘(F) STATE ACCOUNTABILITY.— 


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1 ‘‘(i) IN GENERAL.—Each eligible pub2 lic housing agency providing assistance 

3 under this paragraph shall— 

4 ‘‘(I) on a monthly basis, report 

5 caseload and voucher administration 

6 statistics to the State in which the 

7 agency operates; and 

8 ‘‘(II) twice annually, submit to 

9 the State in which the agency oper10 ates a report on the progress toward 

11 issuing a voucher under this para12 graph to all eligible recipients, based 

13 on— 

14 ‘‘(aa) the percentage reduc15 tion in the number of families 

16 with children and youth that are 

17 experiencing homelessness in the 

18 area in which the agency care op19 erates, as determined by com20 paring the most recent point-in21 time count with the point-in-time 

22 count conducted 1 year prior; 

23 and 

24 ‘‘(bb) the percentage reduc25 tion in the number of children 


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1 experiencing homelessness in the 

2 State, as documented under the 

3 requirements of the program au4 thorized under subtitle B of title 

5 VII of the McKinney-Vento 

6 Homeless Assistance Act (42 

7 U.S.C. 11431 et seq.). 

8 ‘‘(ii) BENCHMARKS.—Each year, each 

9 State shall meet the benchmarks described 

10 in this clause, based equally on the per11 centage reduction in reported population of 

12 children and families experiencing home13 lessness in the following year’s point-in14 time count and the percentage reduction in 

15 population of students experiencing home16 lessness: 

17 ‘‘(I) ANNUAL REPORT.—Each 

18 State shall submit an annual report to 

19 the Secretary that contains— 

20 ‘‘(aa) data collected from 

21 schools pursuant to the program 

22 authorized under subtitle B of 

23 title VII of the McKinney-Vento 

24 Homeless Assistance Act (42 


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1 U.S.C. 11431 et seq.), including 

2 the number of students— 

3 ‘‘(AA) experiencing 

4 unsheltered homelessness; 

5 ‘‘(BB) living in shel6 ters; 

7 ‘‘(CC) living in motels, 

8 hotels, or campgrounds; 

9 ‘‘(DD) living in a car or 

10 other motor vehicle; or 

11 ‘‘(EE) sharing the 

12 housing of other persons due 

13 to loss of housing, economic 

14 hardship, or similar rea15 soning; and 

16 ‘‘(bb) the information re17 ceived from each public housing 

18 agency in the State under clause 

19 (i)(II). 

20 ‘‘(II) ISSUANCE OF VOUCHERS

21 FOR SMALLER STATES.—Each State 

22 with a rate of homelessness that is 

23 not higher than 10 people per 10,000 

24 shall— 


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1 ‘‘(aa) not later than 2 years 

2 after the end of the capacity3 building period— 

4 ‘‘(AA) issue vouchers 

5 under this paragraph to not 

6 less than 50 percent of the 

7 population of people experi8 encing homelessness in the 

9 State, using data from the 

10 most recent point-in-time 

11 count; and 

12 ‘‘(BB) to the greatest 

13 extent possible, prioritize the 

14 issuance of those vouchers 

15 to eligible youth and fami16 lies; 

17 ‘‘(bb) not later than 3 years 

18 after the end of the capacity19 building period— 

20 ‘‘(AA) issue vouchers 

21 under this paragraph to not 

22 less than 70 percent of the 

23 population of people experi24 encing homelessness in the 

25 State, using data from the 


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•S 680 IS

1 most recent point-in-time 

2 count; and 

3 ‘‘(BB) to the greatest 

4 extent possible, prioritize the 

5 issuance of those vouchers 

6 to eligible youth and fami7 lies; and 

8 ‘‘(cc) not later than 4 years 

9 after the end of the capacity10 building period, issue vouchers 

11 under this paragraph to all peo12 ple experiencing homelessness in 

13 the State. 

14 ‘‘(III) ISSUANCE OF VOUCHERS

15 FOR LARGER STATES.—Each State 

16 with a rate of homelessness that is 

17 higher than 10 people per 10,000 

18 shall— 

19 ‘‘(aa) not later than 2 years 

20 after the end of the capacity21 building period— 

22 ‘‘(AA) issue vouchers 

23 under this paragraph to not 

24 less than 40 percent of the 

25 population of people experiVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 encing homelessness in the 

2 State, using data from the 

3 most recent point-in-time 

4 count; and 

5 ‘‘(BB) to the greatest 

6 extent possible, prioritize the 

7 issuance of those vouchers 

8 to eligible youth and fami9 lies; 

10 ‘‘(bb) not later than 3 years 

11 after the end of the capacity12 building period— 

13 ‘‘(AA) issue vouchers 

14 under this paragraph to not 

15 less than 60 percent of the 

16 population of people experi17 encing homelessness in the 

18 State, using data from the 

19 most recent point-in-time 

20 count; and 

21 ‘‘(BB) to the greatest 

22 extent possible, prioritize the 

23 issuance of those vouchers 

24 to eligible youth and fami25 lies; and 


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•S 680 IS

1 ‘‘(cc) not later than 4 years 

2 after the end of the capacity3 building period, issue vouchers 

4 under this paragraph to all peo5 ple experiencing homelessness in 

6 the State. 

7 ‘‘(iii) PENALTIES.— 

8 ‘‘(I) WARNING.—Except as pro9 vided in clause (v), if a State does not 

10 meet the applicable benchmarks de11 scribed in clause (ii), the Secretary 

12 shall publicly warn the State of the 

13 failure of the State to meet the bench14 mark and remind the State of the ap15 plicable penalties. 

16 ‘‘(II) REDUCTION IN FEDERAL

17 HIGHWAY FUNDS.—If a State does 

18 not meet the applicable benchmarks 

19 described in clause (ii)— 

20 ‘‘(aa) by the date that is 

21 180 days after the warning by 

22 the Secretary under subclause (I) 

23 of this clause, the Federal share 

24 payable for Federal-aid highway 

25 projects under section 120 of 


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1 title 23, United States Code, 

2 shall be reduced by 5 percent; or 

3 ‘‘(bb) by the date that is 

4 180 days after a reduction made 

5 under item (aa) of this subclause, 

6 the Federal share payable for 

7 Federal-aid highway projects 

8 under section 120 of title 23, 

9 United States Code, shall be fur10 ther reduced by 5 percent. 

11 ‘‘(iv) CONDITION ON COMPLIANCE.— 

12 Beginning in the first Notice of Funding 

13 Availability cycle beginning after the date 

14 of enactment of this paragraph, and every 

15 Notice of Funding Availability cycle there16 after, the Secretary shall condition the 

17 awarding of all funding for vouchers under 

18 this paragraph by the Secretary to a public 

19 housing authority in a State on that 

20 State’s compliance with the benchmarks 

21 described in clause (ii). 

22 ‘‘(v) UNEMPLOYMENT RATE.—If the 

23 quarterly unemployment rate of the popu24 lation of a State is not less than 6 per25 cent— 


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1 ‘‘(I) the State shall not be penal2 ized under clause (iii) for failure to 

3 meet the benchmarks described in 

4 clause (ii); and 

5 ‘‘(II) the State shall be required 

6 to meet the benchmarks described in 

7 clause (ii) not later than 180 days 

8 after the date on which the quarterly 

9 unemployment rate descends beneath 

10 6 percent. 

11 ‘‘(G) ADMINISTRATIVE NEEDS OF HUD.— 

12 ‘‘(i) AUTHORIZATION OF APPROPRIA13 TIONS.—There is authorized to be appro14 priated $15,000,000 for each of fiscal 

15 years 2023 through 2027 to the Secretary 

16 for the administrative needs of the Depart17 ment of Housing and Urban Development 

18 and regional offices of the Department in 

19 carrying out the voucher program under 

20 this paragraph. 

21 ‘‘(ii) PROHIBITION.—None of the 

22 funds made available under this subpara23 graph may be used to provide raises or bo24 nuses to any employee of the Department 

25 of Housing and Urban Development in an 


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•S 680 IS

1 amount that is more than 10 percent of 

2 the annual gross salary of the employee.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

4 Effective on December 29, 2024, paragraph (22) of sec5 tion 8(o) of the United States Housing Act of 1937 (42 

6 U.S.C. 1437f(o)), as added by subsection (a), is redesig7 nated as paragraph (23) and shall appear after paragraph 

8 (22), as added by section 601(a)(2)(B) of division AA of 

9 Consolidated Appropriations Act, 2023 (Public Law 117– 

10 328). 

11 SEC. 112. LAND ACQUISITION AND CONSTRUCTION. 

12 (a) DEFINITIONS.—In this section— 

13 (1) the term ‘‘at risk of homelessness’’ has the 

14 meaning given the term in section 401(1) of the 

15 McKinney-Vento Homeless Assistance Act (42 

16 U.S.C. 11360), except that ‘‘50 percent’’ shall be 

17 substituted for ‘‘30 percent’’ in subparagraph (A) of 

18 that section; 

19 (2) the terms ‘‘extremely low-income’’ and 

20 ‘‘very low-income’’ have the meanings given those 

21 terms in section 1303 of the Federal Housing Enter22 prises Financial Safety and Soundness Act of 1992 

23 (12 U.S.C. 4502); 

24 (3) the term ‘‘homeless’’ means an individual or 

25 family who is— 


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1 (A) living in a place not meant for human 

2 habitation or in an emergency shelter; 

3 (B) living in transitional housing for home4 less persons and was homeless before entering 

5 transitional housing or an emergency shelter; 

6 (C) fleeing domestic violence; or 

7 (D) at risk of homelessness; and 

8 (4) the term ‘‘Secretary’’ means the Secretary 

9 of Housing and Urban Development. 

10 (b) AUTHORIZATIONS OF APPROPRIATIONS.— 

11 (1) IN GENERAL.—There is authorized to be 

12 appropriated to the Housing Trust Fund established 

13 under section 1338 of the Federal Housing Enter14 prises Financial Safety and Soundness Act of 1992 

15 (12 U.S.C. 4568) $10,000,000,000 for each of fiscal 

16 years 2023 through 2033 for allocation to States in 

17 accordance with subsection (c) of such section 1338, 

18 subject to subsections (c) through (f) of this section. 

19 (2) ADMINISTRATIVE NEEDS OF STATES.— 

20 (A) AUTHORIZATION OF APPROPRIA21 TIONS.—There is authorized to be appropriated 

22 to the Secretary $65,000,000 for each of fiscal 

23 years 2023 through 2028 for the administrative 

24 needs of States under this section, in accord25 ance with subparagraph (C). 


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1 (B) ALLOCATION.—Of amounts authorized 

2 to be appropriated under subparagraph (A) for 

3 each fiscal year— 

4 (i) $15,000,000 shall be allocated to 

5 the Commonwealth of the Northern Mar6 iana Islands, Guam, American Samoa, and 

7 the Virgin Islands; and 

8 (ii) the remainder shall be allocated to 

9 States pursuant to the formula established 

10 under paragraph (22)(E)(ii) of section 8(o) 

11 of the United States Housing Act of 1937 

12 (42 U.S.C. 1437f(o)), as added by section 

13 111 of this Act. 

14 (C) ELIGIBLE ACTIVITIES.—A State that 

15 receives funds authorized to be appropriated 

16 under subparagraph (A) may only use the funds 

17 for capacity-related investments that are nec18 essary for the State to successfully allocate 

19 funds made available under paragraph (1) of 

20 this subsection. 

21 (D) PROHIBITION.—None of the funds 

22 made available under this paragraph may be 

23 used to provide raises or bonuses to any official 

24 of the executive branch of a State. 

25 (c) REVISION OF FUNDING FORMULA.— 


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1 (1) IN GENERAL.—Not later than 1 year after 

2 the date of enactment of this Act, the Secretary 

3 shall report to Congress proposed changes to the 

4 funding formula under section 1338(c)(3) of the 

5 Federal Housing Enterprises Financial Safety and 

6 Soundness Act of 1992 (12 U.S.C. 4568(c)(3)) in 

7 order to ensure that the funding formula takes into 

8 account the economic status of the people of the 

9 United States, including the economic impact of the 

10 COVID–19 pandemic. 

11 (2) CONTENTS.—The revised formula proposed 

12 under paragraph (1) shall address the following con13 cerns: 

14 (A) The COVID–19 pandemic and its im15 pacts on the economic security and housing sta16 bility of very low-income and extremely low-in17 come people of the United States. 

18 (B) The impacts of differing vacancy rates 

19 across various housing markets in the United 

20 States. 

21 (C) The rate of unsheltered homelessness 

22 in various housing markets across the United 

23 States. 

24 (D) The impact of differing rates of pov25 erty and extreme poverty across various States. 


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1 (E) The gap between demand for and sup2 ply of rental units that are affordable and avail3 able to very low-income and extremely low-in4 come renters in a State. 

5 (d) ELIGIBLE HOUSEHOLDS.—Housing that is as6 sisted using amounts made available under subsection (b) 

7 may only be used for the benefit of very low-income or 

8 extremely low-income households. 

9 (e) ELIGIBLE ACTIVITIES.—A recipient of funds au10 thorized under subsection (b)— 

11 (1) may only use the funds for land acquisition 

12 and the acquisition, rehabilitation, or development of 

13 rental housing that is affordable for very low-income 

14 or extremely low-income households; and 

15 (2) shall take all possible measures to expedite 

16 construction of housing described in paragraph (1). 

17 (f) PRIORITY FOR OCCUPANCY IN DWELLING

18 UNITS.— 

19 (1) FIRST 2 FISCAL YEARS.—During the first 2 

20 fiscal years for which amounts are made available to 

21 carry out this section, the Secretary shall ensure 

22 that priority for occupancy in a dwelling unit that 

23 receives assistance under this section is given to a 

24 homeless family or homeless youth. 


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1 (2) SUBSEQUENT 3 FISCAL YEARS.—During the 

2 third, fourth, and fifth fiscal years for which 

3 amounts are made available to carry out this section, 

4 the Secretary shall ensure that priority for occu5 pancy in a dwelling unit that receives assistance 

6 under this section is given to a homeless family or 

7 homeless individual. 

8 SEC. 113. MODULAR CONSTRUCTION PILOT PROGRAM. 

9 (a) DEFINITIONS.—In this section: 

10 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti11 ty’’ means a public housing agency, a tribally des12 ignated housing entity (as defined in section 4 of the 

13 Native American Housing Assistance and Self De14 termination Act of 1996 (25 U.S.C. 4103)), a non15 profit entity, a company, a religious entity, or a unit 

16 of local or Tribal government. 

17 (2) MODULAR CONSTRUCTION.—The term 

18 ‘‘modular construction’’ means the method of resi19 dential construction by which building modules are 

20 constructed off of the future site of a building, then 

21 brought together on the building site to form a larg22 er residential building, in an effort to reduce con23 struction costs. 

24 (3) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of Housing and Urban Development. 


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1 (b) ESTABLISHMENT OF PROGRAM.— 

2 (1) IN GENERAL.—The Secretary shall establish 

3 a pilot program to provide grants to eligible entities 

4 to promote the construction of affordable housing 

5 using modular construction. 

6 (2) AFFORDABILITY REQUIREMENT.—To be eli7 gible to receive a grant under paragraph (1), an eli8 gible entity shall be required to guarantee afford9 ability for a period of more than 20 years. 

10 (3) PRIORITY.—In awarding grants under para11 graph (1), the Secretary shall give priority to an eli12 gible entity that fulfills not fewer than two of the 

13 following requirements: 

14 (A) The eligible entity— 

15 (i) will construct the housing in 

16 groups of more than 50 units; or 

17 (ii) provides confirmation from the ju18 risdiction with land use control over the 

19 site proposed by the eligible entity that— 

20 (I) construction will be completed 

21 within 18 months; and 

22 (II) the housing will be con23 structed in groups of more than 30 

24 units. 


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1 (B) The eligible entity partners with a 

2 public housing agency or unit of local govern3 ment that will issue rental assistance to resi4 dents of the affordable housing through vouch5 ers or grants. 

6 (C) The eligible entity will provide sup7 portive services (as described in paragraph 

8 (21)(D)(iii)(II) of section 8(o) of the United 

9 States Housing Act of 1937 (42 U.S.C. 

10 1437f(o)), as added by section 3 of this Act) to 

11 residents at no charge, or has secured the pro12 vision of publicly or privately administered sup13 portive services (as so defined) to residents at 

14 no charge. 

15 (c) MATCHING REQUIREMENT.—The Federal share 

16 of a project funded under this section shall be not more 

17 than 75 percent of the cost of the project. 

18 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to the Secretary $2,000,000 

20 for each of fiscal years 2023 through 2028 to carry out 

21 this section. 

22 SEC. 114. SUPPORTING PRO-HOUSING DEVELOPMENT. 

23 (a) DEFINITIONS.—In this section: 


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1 (1) DUPLEX.—The term ‘‘duplex’’ means a res2 idential building divided into 2 units, each of which 

3 has a separate entrance. 

4 (2) ELIGIBLE ACTIVITY.—The term ‘‘eligible 

5 activity’’ means an activity authorized under section 

6 105(a) of the Housing and Community Development 

7 Act of 1974 (42 U.S.C. 5305(a)). 

8 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti9 ty’’ means a jurisdiction that adopts a zoning and 

10 community planning method described in subsection 

11 (d)(4) after the date of enactment of this Act. 

12 (4) FLOOR AREA RATIO.—The term ‘‘floor area 

13 ratio’’ means the measurement of the floor area of 

14 a building in relation to the size of the unit of land 

15 on which the building is located. 

16 (5) JURISDICTION.—The term ‘‘jurisdiction’’ 

17 has the meaning given the term in section 91.5 of 

18 title 24, Code of Federal Regulations, or any suc19 cessor regulation. 

20 (6) LOW-INCOME.—The term ‘‘low-income’’ has 

21 the meaning given the term in section 1303 of the 

22 Federal Housing Enterprises Financial Safety and 

23 Soundness Act of 1992 (12 U.S.C. 4502). 

24 (7) MIXED-USE HOUSING.—The term ‘‘mixed 

25 use housing’’ means a building with— 


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•S 680 IS

1 (A) retail or other business, public service, 

2 or nonprofit establishments at the ground level 

3 or a lower level; and 

4 (B) not less than 1 story of residential 

5 units above the establishments described in sub6 paragraph (A). 

7 (8) QUADPLEX.—The term ‘‘quadplex’’ means a 

8 residential building divided into 4 units, each of 

9 which has a separate entrance. 

10 (9) SECRETARY.—The term ‘‘Secretary’’ means 

11 the Secretary of Housing and Urban Development. 

12 (10) TRIPLEX.—The term ‘‘triplex’’ means a 

13 residential building divided into 3 units, each of 

14 which has a separate entrance. 

15 (11) MULTIFAMILY HOUSING.—The term ‘‘mul16 tifamily housing’’— 

17 (A) means housing accommodations that— 

18 (i) are designed principally for resi19 dential use; 

20 (ii) conform to standards satisfactory 

21 to the Secretary; and 

22 (iii) consist of not less than 5 rental 

23 units on a site; and 


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1 (B) includes units that are detached, 

2 semidetached, row house, or multifamily struc3 tures. 

4 (b) ZONING INFORMATION REPORTING REQUIRE5 MENT.— 

6 (1) IN GENERAL.—The Secretary shall require 

7 a jurisdiction that receives, directly or indirectly, any 

8 funding from the Secretary to submit to the Sec9 retary a report containing information about the 

10 zoning and community planning methods of the ju11 risdiction, unless the jurisdiction already reports 

12 such information. 

13 (2) ADDITIONAL INFORMATION.—Upon receiv14 ing a report described in paragraph (1) from a juris15 diction, the Secretary may request additional infor16 mation, at the discretion of the Secretary. 

17 (c) PROHIBITED ZONING METHODS.— 

18 (1) IN GENERAL.—On and after the date that 

19 is 180 days after the date of enactment of this Act, 

20 a jurisdiction that uses a zoning and community 

21 planning method described in paragraph (2) may not 

22 receive, directly or indirectly, amounts from a grant 

23 awarded under subsection (d). 

24 (2) PROHIBITED METHODS.—The methods re25 ferred to in paragraph (1) are the following: 


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1 (A) Prohibiting or discouraging duplexes in 

2 areas zoned for single-family homes. 

3 (B) Prohibiting or discouraging single4 room occupancy development in areas zoned for 

5 multifamily homes. 

6 (C) In areas within one half-mile of a 

7 multimodal transit stop, maintaining require8 ments of more than 1 parking spot for a resi9 dent’s car per residential unit. 

10 (D) Prohibiting or discouraging accessory 

11 dwelling units (commonly known as an ‘‘ADU’’ 

12 or ‘‘granny flat’’) on the premises of single-fam13 ily homes. 

14 (E) Prohibiting or discouraging the conver15 sion of commercial property into residential 

16 property. 

17 (F) Prohibiting or discouraging the devel18 opment of multifamily housing or mixed-use 

19 housing in commercial areas. 

20 (3) EXCEPTION.—A jurisdiction shall not be pe21 nalized under paragraph (1) based on the use of a 

22 zoning and community planning method described in 

23 paragraph (2) over which the jurisdiction does not 

24 have control. 

25 (d) GRANT PROGRAM.— 


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1 (1) ESTABLISHMENT.—The Secretary shall es2 tablish a program under which the Secretary awards 

3 competitive grants to eligible entities to use for eligi4 ble activities. 

5 (2) PRIORITY.—In awarding grants under para6 graph (1), the Secretary— 

7 (A) shall give priority to an eligible entity 

8 that adopt more than one of the zoning and 

9 community planning methods described in para10 graph (4); and 

11 (B) in giving priority to an eligible entity 

12 under subparagraph (A) of this paragraph, 

13 shall base the degree of priority given on the 

14 number of such methods that the eligible entity 

15 has adopted, relative to the number of such 

16 methods that each other eligible entity has 

17 adopted. 

18 (3) AMOUNT OF GRANT.— 

19 (A) IN GENERAL.—The amount of a grant 

20 awarded to an eligible entity under paragraph 

21 (1) shall be not less than— 

22 (i) $5,000,000 for an eligible entity 

23 with a population of less than 80,000; 

24 (ii) $20,000,000 for an eligible entity 

25 with a population of less than 100,000; 


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1 (iii) $40,000,000 for an eligible entity 

2 with a population of less than 500,000; 

3 (iv) $100,000,000 for an eligible enti4 ty with a population of less than 

5 1,000,000; and 

6 (v) $125,000,000 for an eligible entity 

7 with a population of not less than 

8 1,000,000. 

9 (B) POPULATION CALCULATION.—The 

10 Secretary shall calculate the population of an 

11 eligible entity for purposes of subparagraph (A) 

12 using the most recently available data from the 

13 Bureau of the Census. 

14 (4) ENCOURAGED ZONING AND COMMUNITY

15 PLANNING METHODS.—The zoning and community 

16 planning methods described in this paragraph are 

17 the following: 

18 (A) Allowing— 

19 (i) duplexes, triplexes, and quadplexes, 

20 or other multifamily housing, in areas 

21 zoned for single-family homes; 

22 (ii) the subdivision of existing single23 family homes into multiple units; and 


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1 (iii) waivers to permitting or zoning 

2 requirements to incentivize the construc3 tion of— 

4 (I) accessory dwelling units; 

5 (II) additions to existing single6 family homes to create duplexes, 

7 triplexes, or quadplexes; or 

8 (III) other additions that do not 

9 require demolition of an existing home 

10 on a given unit of land. 

11 (B) Incentivizing the development of sin12 gle-room occupancy multifamily housing and ac13 cessory dwelling units through expedited per14 mitting, reduced fees, or other incentives. 

15 (C) Not imposing a minimum lot size or 

16 minimum unit square-foot requirements. 

17 (D) Incentivizing the development of com18 mercial property into residential housing. 

19 (E) Eliminating or lowering requirements 

20 for per-unit parking spots. 

21 (F) Allowing increased floor area ratios. 

22 (G) Eliminating or raising height limits on 

23 development to encourage building vertically 

24 rather than horizontally. 


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1 (H) Waiving or eliminating fees or permits 

2 for development in exchange for the develop3 ment of a larger number of units that are af4 fordable to low-income people. 

5 (5) REGULATIONS.—The Secretary may pro6 mulgate any regulations necessary to carry out this 

7 subsection. 

8 (6) AUTHORIZATION OF APPROPRIATIONS.— 

9 There are authorized to be appropriated to carry out 

10 this subsection $4,000,000,000 for each of fiscal 

11 years 2023 through 2028. 

12 SEC. 115. PERMANENT AUTHORIZATION OF APPROPRIA13 TIONS FOR MCKINNEY-VENTO HOMELESS AS14 SISTANCE ACT GRANTS. 

15 Section 408 of the McKinney-Vento Homeless Assist16 ance Act (42 U.S.C. 11364) is amended to read as follows: 

17 ‘‘SEC. 408. AUTHORIZATION OF APPROPRIATIONS. 

18 ‘‘There are authorized to be appropriated to carry out 

19 this title such sums as may be necessary for each fiscal 

20 year.’’. 

21 Subtitle B—Rural Housing 

22 Assistance 

23 SEC. 121. RURAL HOUSING REINVESTMENT. 

24 (a) DEFINITIONS.—In this section: 


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1 (1) BROAD-BASED NONPROFIT ORGANIZA2 TION.—The term ‘‘broad-based nonprofit organiza3 tion’’ means a nonprofit organization that has a 

4 membership that reflects a variety of interests in the 

5 area in which housing assisted under this section 

6 will be located. 

7 (2) COVERED PROGRAM.—The term ‘‘covered 

8 program’’ means— 

9 (A) the Very Low-Income Housing Repair 

10 Loans and Grants Program under section 504 

11 of the Housing Act of 1949 (42 U.S.C. 1474); 

12 (B) the Farm Labor Housing loan pro13 gram under section 514 of the Housing Act of 

14 1949 (42 U.S.C. 1484); 

15 (C) the Rural Rental Housing Loan pro16 gram under section 515 of the Housing Act of 

17 1949 (42 U.S.C. 1485); 

18 (D) the Farm Labor Housing grant pro19 gram under section 516 of the Housing Act of 

20 1949 (42 U.S.C. 1486); and 

21 (E) the Rural Rental Assistance program 

22 under section 521 of the Housing Act of 1949 

23 (42 U.S.C. 1490a). 

24 (3) DOMESTIC FARM LABORER.—The term ‘‘do25 mestic farm laborer’’ means an individual who reVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 ceives a substantial portion of the individual’s in2 come from the primary production of processed or 

3 unprocessed agricultural or aquacultural commod4 ities or other farm labor employment. 

5 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti6 ty’’ means— 

7 (A) a broad-based nonprofit organization; 

8 (B) a nonprofit organization with experi9 ence in developing affordable housing, rural 

10 housing, or housing for domestic farm laborers; 

11 (C) a nonprofit organization of domestic 

12 farm laborers; 

13 (D) a federally recognized Indian Tribe; 

14 (E) a community organization; 

15 (F) an agency of a State or of a political 

16 subdivision of a State; or 

17 (G) a limited partnership with a nonprofit 

18 general partner. 

19 (5) GREEN BUILDING CERTIFICATION.—The 

20 term ‘‘green building certification’’ means— 

21 (A) a certification from the Residential 

22 New Construction Program of the Energy Star 

23 program established by section 324A of the En24 ergy Policy and Conservation Act (42 U.S.C. 

25 6294a); 


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1 (B) a certification from the Zero Energy 

2 Ready Home program of the Department of 

3 Energy; and 

4 (C) a certification or accreditation that is 

5 substantially similar to a certification described 

6 in subparagraph (A) or (B) that requires the 

7 housing project to be at least 10 percent more 

8 efficient than homes built to the building code 

9 standards of the applicable State. 

10 (6) LOW-INCOME.—The term ‘‘low-income’’ has 

11 the meaning given the term in section 1303 of the 

12 Federal Housing Enterprises Financial Safety and 

13 Soundness Act of 1992 (12 U.S.C. 4502). 

14 (7) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of Agriculture. 

16 (b) ASSISTANCE.— 

17 (1) LOANS AND GRANTS.— 

18 (A) IN GENERAL.—The Secretary shall 

19 award additional loans and grants, including 

20 zero-percent interest loans, under the covered 

21 programs to eligible entities that construct or 

22 preserve off-farm affordable housing, including 

23 multifamily housing, for domestic farm laborers 

24 or multifamily housing for low-income individ25 uals living in rural areas to increase and preVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 serve the supply of available and affordable 

2 rental housing for— 

3 (i) low-income individuals living in 

4 rural areas; and 

5 (ii) domestic farm laborers. 

6 (B) TIMELINE.— 

7 (i) NOTICE OF FUNDING AVAIL8 ABILITY.—Not later than 180 days after 

9 the date of enactment of this Act, the Sec10 retary shall publish a notice of funding 

11 availability to solicit applications for loans 

12 and grants to be awarded under subpara13 graph (A). 

14 (ii) AWARDS.—Not later than 1 year 

15 after the date of enactment of this Act, the 

16 Secretary shall award loans and grants, in17 cluding zero-percent interest loans, to eligi18 ble entities under subparagraph (A). 

19 (C) LOCAL CONTRIBUTION FOR GRANTS.— 

20 (i) IN GENERAL.—An eligible entity 

21 that receives a grant under this section 

22 shall contribute not less than 10 percent of 

23 the total project cost from sources other 

24 than the grant. 


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1 (ii) TIMING OF AVAILABILITY.—An el2 igible entity may not receive a grant under 

3 this section unless the funds required 

4 under clause (i) are available to the eligible 

5 entity as of the date on which the grant is 

6 awarded. 

7 (iii) SOURCES.—An eligible entity may 

8 use amounts from a loan financed by the 

9 Rural Housing Service or the Federal 

10 Housing Administration to satisfy the re11 quirement under clause (i). 

12 (2) RENTAL ASSISTANCE FOR OFF-FARM AF13 FORDABLE HOUSING AND MULTIFAMILY HOUSING.— 

14 (A) IN GENERAL.—In addition to loans 

15 and grants under paragraph (1), the Secretary, 

16 acting through the Under Secretary for Rural 

17 Development, shall provide rental assistance 

18 to— 

19 (i) owners of off-farm affordable hous20 ing for domestic farm laborers that is as21 sisted by a loan or grant under paragraph 

22 (1); and 

23 (ii) owners of affordable multifamily 

24 housing for low-income individuals living in 


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1 rural areas that is assisted by a loan or 

2 grant under paragraph (1). 

3 (B) AMOUNT OF RENT.—In providing rent4 al assistance under subparagraph (A), the Sec5 retary shall make assistance payments to the 

6 owners of housing described in that subpara7 graph in order to make available to low-income 

8 occupants of such housing rentals at rates com9 mensurate to income and not exceeding the 

10 highest of— 

11 (i) 30 percent of adjusted income (as 

12 defined in section 3(b)(5) of the United 

13 States Housing Act of 1937 (42 U.S.C. 

14 1437a(b)(5)), except that the amount shall 

15 be calculated on a monthly basis); 

16 (ii) 10 percent of monthly income; or 

17 (iii) if the person or family is receiv18 ing payments for welfare assistance from a 

19 public agency, the portion (if any) of the 

20 payments that is specifically designated by 

21 the agency to meet the housing costs of the 

22 person or family. 

23 (C) CAP ON RENT INCREASES.—The rent 

24 or contribution to rent paid by any recipient of 

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1 crease as a result of this section or any other 

2 provision of Federal law or regulation by more 

3 than 10 percent during any 12-month period, 

4 unless the increase above 10 percent is attrib5 utable to increases in income that are unrelated 

6 to this subsection or the other provision of Fed7 eral law or regulation. 

8 (D) AMOUNT OF ASSISTANCE.—The 

9 amount of an assistance payment made on be10 half of a tenant under this paragraph shall be 

11 equal to the difference between— 

12 (i) the monthly contribution of the 

13 tenant, which shall be the applicable 

14 amount under subparagraph (B); and 

15 (ii) the fair market rental for the ju16 risdiction in which the property is located, 

17 as established by the Secretary under sec18 tion 8(c) of the United States Housing Act 

19 of 1937 (42 U.S.C. 1437a(c)). 

20 (E) REGULATIONS.—The Secretary may 

21 promulgate any regulation that is necessary and 

22 proper to carry out this paragraph. 

23 (3) PRIORITY.—In awarding assistance for 

24 farm labor housing and multi-family housing under 

25 paragraphs (1) and (2), the Secretary shall give priVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 ority to an applicant seeking assistance for a hous2 ing project that— 

3 (A) as determined by the Secretary, is en4 ergy efficient and generates energy, such as 

5 through geo-exchange systems, ground-source 

6 heat pumps, wind turbines, and solar energy 

7 systems; or 

8 (B) has a green building certification. 

9 (c) FUNDING.— 

10 (1) FARM LABOR HOUSING LOANS AND GRANTS

11 PROGRAMS.—There is authorized to be appropriated 

12 to the Secretary $78,000,000 for each of fiscal years 

13 2023 through 2033 to award loans and grants under 

14 subsection (b)(1)(A) through the Farm Labor Hous15 ing loan program and Farm Labor Housing grant 

16 program under sections 514 and 516, respectively, 

17 of the Housing Act of 1949 (42 U.S.C. 1484, 1486). 

18 (2) RURAL RENTAL HOUSING LOAN PRO19 GRAM.—There is authorized to be appropriated to 

20 the Secretary $100,000,000 for each of fiscal years 

21 2023 through 2033 to award loans under subsection 

22 (b)(1)(A) through the Rural Rental Housing Loan 

23 program under section 515 of the Housing Act of 

24 1949 (42 U.S.C. 1485). 


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1 (3) RURAL RENTAL ASSISTANCE PROGRAM.— 

2 There is authorized to be appropriated to the Sec3 retary $2,500,000,000 for each of fiscal years 2023 

4 through 2033 to award loans under subsection 

5 (b)(1)(A) through the Rural Rental Assistance pro6 gram under section 521 of the Housing Act of 1949 

7 (42 U.S.C. 1490a). 

8 (4) RENTAL ASSISTANCE UNDER (b)(2) OF THIS

9 SECTION.—There is authorized to be appropriated to 

10 the Secretary $250,000,000 for each of fiscal years 

11 2023 through 2033 for rental assistance payments 

12 under subsection (b)(2). 

13 SEC. 122. PERMANENT ESTABLISHMENT OF HOUSING PRES14 ERVATION AND REVITALIZATION PROGRAM. 

15 Title V of the Housing Act of 1949 (42 U.S.C. 1471 

16 et seq.) is amended by adding at the end the following: 

17 ‘‘SEC. 545. HOUSING PRESERVATION AND REVITALIZATION 

18 PROGRAM. 

19 ‘‘(a) ESTABLISHMENT.—The Secretary shall carry 

20 out a program under this section for the preservation and 

21 revitalization of multifamily rental housing projects fi22 nanced under section 515 or both sections 514 and 516. 

23 ‘‘(b) NOTICE OF MATURING LOANS.— 

24 ‘‘(1) TO OWNERS.—On an annual basis, the 

25 Secretary shall provide written notice to each owner 


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1 of a property financed under section 515 or both 

2 sections 514 and 516 that will mature within the 4- 

3 year period beginning upon the provision of such no4 tice, setting forth the options and financial incen5 tives that are available to facilitate the extension of 

6 the loan term or the option to decouple a rental as7 sistance contract pursuant to subsection (f). 

8 ‘‘(2) TO TENANTS.— 

9 ‘‘(A) IN GENERAL.—For each property fi10 nanced under section 515 or both sections 514 

11 and 516, not later than the date that is 2 years 

12 before the date that such loan will mature, the 

13 Secretary shall provide written notice to each 

14 household residing in such property that in15 forms them of the date of the loan maturity, 

16 the possible actions that may happen with re17 spect to the property upon such maturity, and 

18 how to protect their right to reside in federally 

19 assisted housing after such maturity. 

20 ‘‘(B) LANGUAGE.—Notice under this para21 graph shall be provided in plain English and 

22 shall be translated into other languages in the 

23 case of any property located in an area in which 

24 a significant number of residents speak such 

25 other languages. 


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1 ‘‘(c) LOAN RESTRUCTURING.—Under the program 

2 under this section, the Secretary may restructure such ex3 isting housing loans, as the Secretary considers appro4 priate, for the purpose of ensuring that such projects have 

5 sufficient resources to preserve the projects to provide safe 

6 and affordable housing for low-income residents and farm 

7 laborers, by— 

8 ‘‘(1) reducing or eliminating interest; 

9 ‘‘(2) deferring loan payments; 

10 ‘‘(3) subordinating, reducing, or reamortizing 

11 loan debt; and 

12 ‘‘(4) providing other financial assistance, in13 cluding advances, payments, and incentives (includ14 ing the ability of owners to obtain reasonable re15 turns on investment) required by the Secretary. 

16 ‘‘(d) RENEWAL OF RENTAL ASSISTANCE.—When the 

17 Secretary offers to restructure a loan pursuant to sub18 section (c), the Secretary shall offer to renew the rental 

19 assistance contract under section 521(a)(2) for a 20-year 

20 term that is subject to annual appropriations, provided 

21 that the owner agrees to bring the property up to such 

22 standards that will ensure its maintenance as decent, safe, 

23 and sanitary housing for the full term of the rental assist24 ance contract. 

25 ‘‘(e) RESTRICTIVE USE AGREEMENTS.— 


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1 ‘‘(1) REQUIREMENT.—As part of the preserva2 tion and revitalization agreement for a project, the 

3 Secretary shall obtain a restrictive use agreement 

4 that obligates the owner to operate the project in ac5 cordance with this title. 

6 ‘‘(2) TERM.— 

7 ‘‘(A) NO EXTENSION OF RENTAL ASSIST8 ANCE CONTRACT.—Except when the Secretary 

9 enters into a 20-year extension of the rental as10 sistance contract for the project, the term of 

11 the restrictive use agreement for the project 

12 shall be consistent with the term of the restruc13 tured loan for the project. 

14 ‘‘(B) EXTENSION OF RENTAL ASSISTANCE

15 CONTRACT.—If the Secretary enters into a 20- 

16 year extension of the rental assistance contract 

17 for a project, the term of the restrictive use 

18 agreement for the project shall be for 20 years. 

19 ‘‘(C) TERMINATION.—The Secretary may 

20 terminate the 20-year use restrictive use agree21 ment for a project prior to the end of its term 

22 if the 20-year rental assistance contract for the 

23 project with the owner is terminated at any 

24 time for reasons outside the owner’s control. 

25 ‘‘(f) DECOUPLING OF RENTAL ASSISTANCE.— 


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1 ‘‘(1) RENEWAL OF RENTAL ASSISTANCE CON2 TRACT.—If the Secretary determines that a matur3 ing loan for a project cannot reasonably be restruc4 tured in accordance with subsection (c) and the 

5 project was operating with rental assistance under 

6 section 521, the Secretary may renew the rental as7 sistance contract, notwithstanding any provision of 

8 section 521, for a term, subject to annual appropria9 tions, of at least 10 years but not more than 20 

10 years. 

11 ‘‘(2) RENTS.—Any agreement to extend the 

12 term of the rental assistance contract under section 

13 521 for a project shall obligate the owner to con14 tinue to maintain the project as decent, safe, and 

15 sanitary housing and to operate the development in 

16 accordance with this title, except that rents shall be 

17 based on the lesser of— 

18 ‘‘(A) the budget-based needs of the project; 

19 or 

20 ‘‘(B) the operating cost adjustment factor 

21 as a payment standard as provided under sec22 tion 524 of the Multifamily Assisted Housing 

23 Reform and Affordability Act of 1997 (42 

24 U.S.C. 1437 note). 


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1 ‘‘(g) MULTIFAMILY HOUSING TRANSFER TECHNICAL

2 ASSISTANCE.—Under the program under this section, the 

3 Secretary may provide grants to qualified nonprofit orga4 nizations and public housing agencies to provide technical 

5 assistance, including financial and legal services, to bor6 rowers under loans under this title for multifamily housing 

7 to facilitate the acquisition of such multifamily housing 

8 properties in areas where the Secretary determines there 

9 is a risk of loss of affordable housing. 

10 ‘‘(h) TRANSFER OF RENTAL ASSISTANCE.—After the 

11 loan or loans for a rental project originally financed under 

12 section 515 or both sections 514 and 516 have matured 

13 or have been prepaid and the owner has chosen not to 

14 restructure the loan pursuant to subsection (c), a tenant 

15 residing in such project shall have 18 months prior to loan 

16 maturation or prepayment to transfer the rental assist17 ance assigned to the tenant’s unit to another rental project 

18 originally financed under section 515 or both sections 514 

19 and 516, and the owner of the initial project may rent 

20 the tenant’s previous unit to a new tenant without income 

21 restrictions. 

22 ‘‘(i) ADMINISTRATIVE EXPENSES.—Of any amounts 

23 made available for the program under this section for any 

24 fiscal year, the Secretary may use not more than 


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1 $1,000,000 for administrative expenses for carrying out 

2 such program. 

3 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

4 is authorized to be appropriated for the program under 

5 this section $200,000,000 for each of fiscal years 2023 

6 through 2028.’’. 

7 SEC. 123. ELIGIBILITY FOR RURAL HOUSING VOUCHERS. 

8 Section 542 of the Housing Act of 1949 (42 U.S.C. 

9 1490r) is amended by adding at the end the following: 

10 ‘‘(c) ELIGIBILITY OF HOUSEHOLDS IN SECTION 514, 

11 515, AND 516 PROJECTS.—The Secretary may provide 

12 rural housing vouchers under this section for any low-in13 come household (including those not receiving rental as14 sistance) residing in a property financed with a loan made 

15 or insured under section 514 or 515 (42 U.S.C. 1484, 

16 1485) which has been prepaid, has been foreclosed, or has 

17 matured after September 30, 2005, or residing in a prop18 erty assisted under section 514 or 516 that is owned by 

19 a nonprofit organization or public agency.’’. 

20 SEC. 124. AMOUNT OF VOUCHER ASSISTANCE. 

21 Notwithstanding any other provision of law, in the 

22 case of any rural housing voucher provided pursuant to 

23 section 542 of the Housing Act of 1949 (42 U.S.C. 

24 1490r), the amount of the monthly assistance payment for 

25 the household on whose behalf such assistance is provided 


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1 shall be determined as provided in subsection (a) of such 

2 section 542. 

3 SEC. 125. USE OF AVAILABLE RENTAL ASSISTANCE. 

4 Section 521(d) of the Housing Act of 1949 (42 

5 U.S.C. 1490a(d)) is amended by adding at the end the 

6 following: 

7 ‘‘(3) In the case of any rental assistance contract au8 thority that becomes available because of the termination 

9 of assistance on behalf of an assisted family— 

10 ‘‘(A) at the option of the owner of the rental 

11 project, the Secretary shall provide the owner a pe12 riod of 6 months before such assistance is made 

13 available pursuant to subparagraph (B) during 

14 which the owner may use such assistance authority 

15 to provide assistance on behalf of an eligible unas16 sisted family that— 

17 ‘‘(i) is residing in the same rental project 

18 that the assisted family resided in prior to such 

19 termination; or 

20 ‘‘(ii) newly occupies a dwelling unit in such 

21 rental project during such period; and 

22 ‘‘(B) except for assistance used as provided in 

23 subparagraph (A), the Secretary shall use such re24 maining authority to provide such assistance on be25 half of eligible families residing in other rental 


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1 projects originally financed under section 515 or 

2 both sections 514 and 516.’’. 

3 SEC. 126. FUNDING FOR MULTIFAMILY TECHNICAL IM4 PROVEMENTS. 

5 There is authorized to be appropriated to the Sec6 retary of Agriculture $50,000,000 for fiscal year 2023 for 

7 improving the technology of the Department of Agri8 culture used to process loans for multifamily housing and 

9 otherwise managing such housing. Such improvements 

10 shall be made within the 5-year period beginning upon the 

11 appropriation of such amounts and such amount shall re12 main available until the expiration of such 5-year period. 

13 SEC. 127. PLAN FOR PRESERVING AFFORDABILITY OF 

14 RENTAL PROJECTS. 

15 (a) PLAN.—Not later than 180 days after the date 

16 of enactment of this Act, the Secretary of Agriculture (in 

17 this section referred to as the ‘‘Secretary’’) shall submit 

18 a written plan to Congress for preserving the affordability 

19 for low-income families of rental projects for which loans 

20 were made under section 515 of the Housing Act of 1949 

21 (42 U.S.C. 1485) or made to nonprofit or public agencies 

22 under section 514 of that Act (42 U.S.C. 1484) and avoid23 ing the displacement of tenant households, which shall— 

24 (1) set forth specific performance goals and 

25 measures; 


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1 (2) set forth the specific actions and mecha2 nisms by which such goals will be achieved; 

3 (3) set forth specific measurements by which 

4 progress towards achievement of each goal can be 

5 measured; 

6 (4) provide for detailed reporting on outcomes; 

7 and 

8 (5) include any legislative recommendations to 

9 assist in achievement of the goals under the plan. 

10 (b) ADVISORY COMMITTEE.— 

11 (1) ESTABLISHMENT; PURPOSE.—The Sec12 retary shall establish an advisory committee whose 

13 purpose shall be to assist the Secretary— 

14 (A) in preserving properties assisted under 

15 section 514 or 515 of the Housing Act of 1949 

16 (42 U.S.C. 1484, 1485) that are owned by non17 profit or public agencies through the multi18 family housing preservation and revitalization 

19 program under section 545 of that Act (as 

20 added by this subtitle); and 

21 (B) implementing the plan required under 

22 subsection (a) of this section. 

23 (2) MEMBER.—The advisory committee shall 

24 consist of 14 members, appointed by the Secretary, 

25 as follows: 


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1 (A) A State Director of Rural Develop2 ment for the Department of Agriculture. 

3 (B) The Administrator for Rural Housing 

4 Service of the Department of Agriculture. 

5 (C) Two representatives of for-profit devel6 opers or owners of multifamily rural rental 

7 housing. 

8 (D) Two representatives of nonprofit devel9 opers or owners of multifamily rural rental 

10 housing. 

11 (E) Two representatives of State housing 

12 finance agencies. 

13 (F) Two representatives of tenants of mul14 tifamily rural rental housing. 

15 (G) One representative of a community de16 velopment financial institution that is involved 

17 in preserving the affordability of housing as18 sisted under sections 514, 515, and 516 of the 

19 Housing Act of 1949 (42 U.S.C. 1484, 1485, 

20 1486). 

21 (H) One representative of a nonprofit or22 ganization that operates nationally and has ac23 tively participated in the preservation of hous24 ing assisted by the Rural Housing Service by 

25 conducting research regarding, and providing fiVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 nancing and technical assistance for, preserving 

2 the affordability of such housing. 

3 (I) One representative of low-income hous4 ing tax credit investors. 

5 (J) One representative of regulated finan6 cial institutions that finance affordable multi7 family rural rental housing developments. 

8 (3) MEETINGS.—The advisory committee shall 

9 meet not less often than once each calendar quarter. 

10 (4) FUNCTIONS.—In providing assistance to the 

11 Secretary to carry out its purpose, the advisory com12 mittee shall carry out the following functions: 

13 (A) Assisting the Rural Housing Service of 

14 the Department of Agriculture to improve esti15 mates of the size, scope, and condition of rental 

16 housing portfolio of the Service, including the 

17 time frames for maturity of mortgages and 

18 costs for preserving the portfolio as affordable 

19 housing. 

20 (B) Reviewing current policies and proce21 dures of the Rural Housing Service regarding 

22 preservation of affordable rental housing fi23 nanced under sections 514, 515, 516, and 538 

24 of the Housing Act of 1949 (42 U.S.C. 1484, 

25 1485, 1486, 1490p–2), the Multifamily PreserVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 vation and Revitalization Demonstration pro2 gram (commonly known as the ‘‘MPR’’), and 

3 the Rural Rental Assistance program under sec4 tion 521 of the Housing Act of 1949 (42 

5 U.S.C. 1490a) and making recommendations 

6 regarding improvements and modifications to 

7 such policies and procedures. 

8 (C) Providing ongoing review of Rural 

9 Housing Service program results. 

10 (D) Providing reports to Congress and the 

11 public on meetings, recommendations, and other 

12 findings of the advisory committee. 

13 TITLE II—REVENUE PROVISIONS 

14 SEC. 201. TAX-EXEMPT BOND FINANCING REQUIREMENT. 

15 (a) IN GENERAL.—Section 42(h)(4)(B) of the Inter16 nal Revenue Code of 1986 is amended to read as follows: 

17 ‘‘(B) SPECIAL RULE WHERE A REQUIRED

18 PERCENT OF BUILDINGS IS FINANCED WITH

19 TAX-EXEMPT BONDS SUBJECT TO VOLUME

20 CAP.—For purposes of subparagraph (A), para21 graph (1) shall not apply to any portion of the 

22 credit allowable under subsection (a) with re23 spect to a building if— 

24 ‘‘(i) 50 percent or more of the aggre25 gate basis of any such building and the 


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1 land on which the building is located is fi2 nanced by any obligation described in sub3 paragraph (A), or 

4 ‘‘(ii) 25 percent or more of the aggre5 gate basis of such building and the land on 

6 which the building is located is financed by 

7 any obligation which is described in sub8 paragraph (A) and issued in calendar year 

9 2024, 2025, 2026, 2027, or 2028.’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to any building some portion of 

12 which, or of the land on which the building is located, is 

13 financed by an obligation which is described in section 

14 42(h)(4)(A) and which is part of an issue the issue date 

15 of which is after December 31, 2023. 

16 SEC. 202. INCREASES IN STATE ALLOCATIONS. 

17 (a) IN GENERAL.—Clause (ii) of section 42(h)(3)(C) 

18 of the Internal Revenue Code is amended— 

19 (1) by striking ‘‘$1.75’’ in subclause (I) and in20 serting ‘‘the per capita amount’’, and 

21 (2) by striking ‘‘$2,000,000’’ in subclause (II) 

22 and inserting ‘‘the minimum amount’’. 

23 (b) PER CAPITA AMOUNT; MINIMUM AMOUNT.—Sec24 tion 42(h)(3) of the Internal Revenue Code of 1986 is 


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1 amended by striking subparagraphs (H) and (I) and in2 serting the following: 

3 ‘‘(H) PER CAPITA AMOUNT.—For purposes 

4 of subparagraph (C)(ii)(I), the per capita 

5 amount shall be determined as follows: 

6 ‘‘(i) CALENDAR YEAR 2023.—For cal7 endar year, 2023, the per capita amount is 

8 $3.90. 

9 ‘‘(ii) CALENDAR YEAR 2024.—For cal10 endar year 2024, the per capita amount is 

11 the product of— 

12 ‘‘(I) 1.25, and 

13 ‘‘(II) the dollar amount under 

14 clause (i) increased by an amount 

15 equal to— 

16 ‘‘(aa) such dollar amount, 

17 multiplied by 

18 ‘‘(bb) the cost-of-living ad19 justment determined under sec20 tion 1(f)(3) for such calendar 

21 year, determined by substituting 

22 ‘calendar year 2022’ for ‘cal23 endar year 2016’ in subpara24 graph (A)(ii) thereof. 


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1 If the amount determined after application of 

2 the preceding sentence is not a multiple of 

3 $5,000, such amount shall be rounded to the 

4 next lowest multiple of $5,000. 

5 ‘‘(iii) CALENDAR YEARS AFTER

6 2024.—In the case of any calendar year 

7 after 2024, the per capita amount is the 

8 dollar amount determined under clause (ii) 

9 increased by an amount equal to— 

10 ‘‘(I) such dollar amount, multi11 plied by 

12 ‘‘(II) the cost-of-living adjust13 ment determined under section 1(f)(3) 

14 for such calendar year, determined by 

15 substituting ‘calendar year 2023’ for 

16 ‘calendar year 2016’ in subparagraph 

17 (A)(ii) thereof. 

18 Any amount increased under the preceding 

19 sentence which is not a multiple of 5 cents 

20 shall be rounded to the next lowest mul21 tiple of 5 cents. 

22 ‘‘(I) MINIMUM AMOUNT.—For purposes of 

23 subparagraph (C)(ii)(II), the minimum amount 

24 shall be determined as follows: 


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1 ‘‘(i) CALENDAR YEAR 2023.—For cal2 endar year, 2023, the minimum amount is 

3 $4,495,000. 

4 ‘‘(ii) CALENDAR YEAR 2024.—For cal5 endar year 2024, the minimum amount is 

6 the product of— 

7 ‘‘(I) 1.25, and 

8 ‘‘(II) the dollar amount under 

9 clause (i) increased by an amount 

10 equal to— 

11 ‘‘(aa) such dollar amount, 

12 multiplied by 

13 ‘‘(bb) the cost-of-living ad14 justment determined under sec15 tion 1(f)(3) for such calendar 

16 year, determined by substituting 

17 ‘calendar year 2022’ for ‘cal18 endar year 2016’ in subpara19 graph (A)(ii) thereof. 

20 If the amount determined after application 

21 of the preceding sentence is not a multiple 

22 of 5 cents, such amount shall be rounded 

23 to the next lowest multiple of 5 cents. 

24 ‘‘(iii) CALENDAR YEARS AFTER

25 2024.—In the case of any calendar year 


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1 after 2024, the minimum amount is the 

2 dollar amount determined under clause (ii) 

3 increased by an amount equal to— 

4 ‘‘(I) such dollar amount, multi5 plied by 

6 ‘‘(II) the cost-of-living adjust7 ment determined under section 1(f)(3) 

8 for such calendar year, determined by 

9 substituting ‘calendar year 2023’ for 

10 ‘calendar year 2016’ in subparagraph 

11 (A)(ii) thereof. 

12 Any amount increased under the preceding 

13 sentence which is not a multiple of $5,000 

14 shall be rounded to the next lowest mul15 tiple of $5,000.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to calendar years beginning after 

18 December 31, 2022. 

19 SEC. 203. BUILDINGS DESIGNATED TO SERVE EXTREMELY 

20 LOW-INCOME HOUSEHOLDS. 

21 (a) RESERVED STATE ALLOCATION.— 

22 (1) IN GENERAL.—Section 42(h) of the Internal 

23 Revenue Code of 1986 is amended— 


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1 (A) by redesignating paragraphs (6), (7), 

2 and (8) as paragraphs (7), (8), and (9), respec3 tively, and 

4 (B) by inserting after paragraph (5) the 

5 following new paragraph: 

6 ‘‘(6) PORTION OF STATE CEILING SET-ASIDE

7 FOR PROJECTS DESIGNATED TO SERVE EXTREMELY

8 LOW-INCOME HOUSEHOLDS.— 

9 ‘‘(A) IN GENERAL.—Not more than 92 

10 percent of the portion of the State housing 

11 credit ceiling amount described in paragraph 

12 (3)(C)(ii) for any State for any calendar year 

13 shall be allocated to buildings other than build14 ings described in subparagraph (B). 

15 ‘‘(B) BUILDINGS DESCRIBED.—A building 

16 is described in this subparagraph if 20 percent 

17 or more of the residential units in such building 

18 are rent-restricted (determined as if the im19 puted income limitation applicable to such units 

20 were 30 percent of area median gross income) 

21 and are designated by the taxpayer for occu22 pancy by households the aggregate household 

23 income of which does not exceed the greater 

24 of— 


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1 ‘‘(i) 30 percent of area median gross 

2 income, or 

3 ‘‘(ii) 100 percent of an amount equal 

4 to the Federal poverty line (within the 

5 meaning of section 36B(d)(3)). 

6 ‘‘(C) EXCEPTION.—A building shall not be 

7 treated as described in subparagraph (B) if 

8 such building is a part of a qualified low-income 

9 housing project with respect to which the tax10 payer elects the requirements of subsection 

11 (g)(1)(C).’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 42(b)(4)(C) of such Code is amended by striking 

14 ‘‘(h)(7)’’ and inserting ‘‘(h)(8)’’. 

15 (b) INCREASE IN CREDIT.—Paragraph (5) of section 

16 42(d) of the Internal Revenue Code of 1986 is amended 

17 by adding at the end the following new subparagraph: 

18 ‘‘(C) INCREASE IN CREDIT FOR BUILDINGS

19 DESIGNATED TO SERVE EXTREMELY LOW-IN20 COME HOUSEHOLDS.— 

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

22 building— 

23 ‘‘(I) which is described in sub24 section (h)(6)(B), and 


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1 ‘‘(II) which is designated by the 

2 housing credit agency as requiring the 

3 increase in credit under this subpara4 graph in order for such building to be 

5 financially feasible as part of a quali6 fied low-income housing project, 

7 subparagraph (B) shall not apply to the 

8 portion of such building which is comprised 

9 of residential units described in subsection 

10 (h)(6)(B) (determined in a manner similar 

11 to the unit fraction under subsection 

12 (c)(1)(C)), and the eligible basis of such 

13 portion of the building shall be 150 per14 cent of such basis determined without re15 gard to this subparagraph. 

16 ‘‘(ii) ALLOCATION RULES APPLICABLE

17 TO PROJECTS TO WHICH CLAUSE (i) AP18 PLIES.— 

19 ‘‘(I) STATE HOUSING CREDIT

20 CEILING.—For any calendar year, no 

21 more than 13 percent of the portion 

22 of the State housing credit ceiling de23 scribed in subsection (h)(3)(C)(ii) 

24 shall be allocated to buildings to 

25 which clause (i) applies. 


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1 ‘‘(II) APPLICATION TO PROJECTS

2 FINANCED WITH TAX-EXEMPT

3 BONDS.—In the case of any building 

4 which is financed by an obligation de5 scribed in subsection (h)(4), clause (i) 

6 shall not apply unless— 

7 ‘‘(aa) the State in which the 

8 issuing authority issuing such ob9 ligation is located designates 

10 such obligation as an obligation 

11 to which this subparagraph ap12 plies, and 

13 ‘‘(bb) the aggregate face 

14 amount of obligations designated 

15 under item (aa) by such State in 

16 the calendar year during which 

17 such obligation is issued does not 

18 exceed 8 percent of the State 

19 ceiling of such State under sec20 tion 146(d)(1) for such year.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to allocations of housing credit dol23 lar amount after December 31, 2023, and to buildings 

24 that are described in section 42(h)(4)(B) taking into acVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 count only obligations that are part of an issue the issue 

2 date of which is after December 31, 2023. 

3 SEC. 204. INCLUSION OF INDIAN AREAS AS DIFFICULT DE4 VELOPMENT AREAS FOR PURPOSES OF CER5 TAIN BUILDINGS. 

6 (a) IN GENERAL.—Subclause (I) of section 

7 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

8 amended by inserting before the period the following: ‘‘, 

9 and any Indian area’’. 

10 (b) INDIAN AREA.—Clause (iii) of section 

11 42(d)(5)(B) of the Internal Revenue Code of 1986 is 

12 amended by redesignating subclause (II) as subclause (IV) 

13 and by inserting after subclause (I) the following new sub14 clauses: 

15 ‘‘(II) INDIAN AREA.—For pur16 poses of subclause (I), the term ‘In17 dian area’ means any Indian area (as 

18 defined in section 4(11) of the Native 

19 American Housing Assistance and 

20 Self Determination Act of 1996 (25 

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

22 ‘‘(III) SPECIAL RULE FOR

23 BUILDINGS IN INDIAN AREAS.—In the 

24 case of an area which is a difficult de25 velopment area solely because it is an 


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1 Indian area, a building shall not be 

2 treated as located in such area unless 

3 such building is assisted or financed 

4 under the Native American Housing 

5 Assistance and Self Determination 

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

7 or the project sponsor is an Indian 

8 tribe (as defined in section 

9 45A(c)(6)), a tribally designated hous10 ing entity (as defined in section 4(22) 

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

12 wholly owned or controlled by such an 

13 Indian tribe or tribally designated 

14 housing entity.’’. 

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

16 this section shall apply to buildings placed in service after 

17 December 31, 2023. 

18 SEC. 205. INCLUSION OF RURAL AREAS AS DIFFICULT DE19 VELOPMENT AREAS. 

20 (a) IN GENERAL.—Subclause (I) of section 

21 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986, as 

22 amended by section 204, is further amended by inserting 

23 ‘‘, any rural area’’ after ‘‘median gross income’’. 

24 (b) RURAL AREA.—Clause (iii) of section 

25 42(d)(5)(B) of the Internal Revenue Code of 1986, as 


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1 amended by section 204, is further amended by redesig2 nating subclause (IV) as subclause (V) and by inserting 

3 after subclause (III) the following new subclause: 

4 ‘‘(IV) RURAL AREA.—For pur5 poses of subclause (I), the term ‘rural 

6 area’ means any non-metropolitan 

7 area, or any rural area as defined by 

8 section 520 of the Housing Act of 

9 1949, which is identified by the quali10 fied allocation plan under subsection 

11 (m)(1)(B).’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to buildings placed in service after 

14 December 31, 2023. 

15 SEC. 206. INCREASE IN CREDIT FOR BOND-FINANCED 

16 PROJECTS DESIGNATED BY HOUSING CREDIT 

17 AGENCY. 

18 (a) IN GENERAL.—Clause (v) of section 42(d)(5)(B) 

19 of the Internal Revenue Code of 1986 is amended by strik20 ing the second sentence. 

21 (b) TECHNICAL AMENDMENTS.—Clause (v) of sec22 tion 42(d)(5)(B) of the Internal Revenue Code of 1986, 

23 as amended by subsection (a), is further amended— 

24 (1) by striking ‘‘STATE’’ in the heading; and 


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1 (2) by striking ‘‘State housing credit agency’’ 

2 and inserting ‘‘housing credit agency’’. 

3 (c) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—The amendment made by 

5 subsection (a) shall apply to a building if— 

6 (A) any portion of such building is fi7 nanced by an obligation described in paragraph 

8 (2), or 

9 (B) the land on which the building is lo10 cated is financed by an obligation described in 

11 paragraph (2). 

12 (2) OBLIGATION DESCRIBED.—An obligation is 

13 described in this paragraph if such obligation— 

14 (A) is described in section 42(h)(4)(A) of 

15 the Internal Revenue Code of 1986, and 

16 (B) is issued after December 31, 2023. 

17 SEC. 207. REPEAL OF QUALIFIED CONTRACT OPTION. 

18 (a) TERMINATION OF OPTION FOR CERTAIN BUILD19 INGS.— 

20 (1) IN GENERAL.—Subclause (II) of section 

21 42(h)(7)(E)(i) of the Internal Revenue Code of 

22 1986, as redesignated by section 203, is amended by 

23 inserting ‘‘in the case of a building described in 

24 clause (iii),’’ before ‘‘on the last day’’. 


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1 (2) BUILDINGS DESCRIBED.—Subparagraph 

2 (E) of section 42(h)(7) of such Code, as so redesig3 nated, is amended by adding at the end the following 

4 new clause: 

5 ‘‘(iii) BUILDINGS DESCRIBED.—A 

6 building described in this clause is a build7 ing— 

8 ‘‘(I) which received its allocation 

9 of housing credit dollar amount before 

10 January 1, 2024, or 

11 ‘‘(II) in the case of a building 

12 any portion of which is financed as 

13 described in paragraph (4), and which 

14 received before January 1, 2024, 

15 under the rules of paragraphs (1) and 

16 (2) of subsection (m), a determination 

17 from the issuer of the tax-exempt 

18 bonds or the housing credit agency 

19 that the building would be eligible 

20 under the qualified allocation plan to 

21 receive an allocation of housing credit 

22 dollar amount or that the credits to be 

23 earned are necessary for financial fea24 sibility of the project and its viability 


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1 as a qualified low-income housing 

2 project throughout the credit period.’’. 

3 (b) RULES RELATING TO EXISTING PROJECTS.— 

4 Subparagraph (F) of section 42(h)(7) of the Internal Rev5 enue Code of 1986, as redesignated by section 203, is 

6 amended by striking ‘‘the nonlow-income portion’’ and all 

7 that follows and inserting ‘‘the nonlow-income portion and 

8 the low-income portion of the building for fair market 

9 value (determined by the housing credit agency by taking 

10 into account the rent restrictions required for the low-in11 come portion of the building to continue to meet the stand12 ards of paragraphs (1) and (2) of subsection (g)). The 

13 Secretary shall prescribe such regulations as may be nec14 essary or appropriate to carry out this paragraph.’’. 

15 (c) CONFORMING AMENDMENTS.— 

16 (1) Paragraph (7) of section 42(h) of the Inter17 nal Revenue Code of 1986, as redesignated by sec18 tion 203, is amended by striking subparagraph (G) 

19 and by redesignating subparagraphs (H), (I), (J), 

20 and (K) as subparagraphs (G), (H), (I), and (J), re21 spectively. 

22 (2) Subclause (II) of section 42(h)(7)(E)(i) of 

23 such Code, as so redesignated and as amended by 

24 subsection (a), is further amended by striking ‘‘sub25 paragraph (I)’’ and inserting ‘‘subparagraph (H)’’. 


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1 (d) TECHNICAL AMENDMENT.—Subparagraph (I) of 

2 section 42(h)(7) of the Internal Revenue Code of 1986, 

3 as redesignated by section 203 and subsection (c), is 

4 amended by striking ‘‘agreement’’ and inserting ‘‘commit5 ment’’. 

6 (e) EFFECTIVE DATES.— 

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section 

9 shall take effect on the date of the enactment of this 

10 Act. 

11 (2) SUBSECTION (b).—The amendments made 

12 by subsection (b) shall apply to buildings with re13 spect to which a written request described in section 

14 42(h)(7)(H) of the Internal Revenue Code of 1986, 

15 as redesignated by section 203 and subsection (c), is 

16 submitted after the date of the enactment of this 

17 Act. 

18 SEC. 208. MODIFICATION AND CLARIFICATION OF RIGHTS 

19 RELATING TO BUILDING PURCHASE. 

20 (a) MODIFICATION OF RIGHT OF FIRST REFUSAL.— 

21 (1) IN GENERAL.—Subparagraph (A) of section 

22 42(i)(7) of the Internal Revenue Code of 1986 is 

23 amended by striking ‘‘a right of 1st refusal’’ and in24 serting ‘‘an option’’. 


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1 (2) CONFORMING AMENDMENT.—The heading 

2 of paragraph (7) of section 42(i) of such Code is 

3 amended by striking ‘‘RIGHT OF 1ST REFUSAL’’ and 

4 inserting ‘‘OPTION’’. 

5 (b) CLARIFICATION WITH RESPECT TO RIGHT OF

6 FIRST REFUSAL AND PURCHASE OPTIONS.— 

7 (1) PURCHASE OF PARTNERSHIP INTEREST.— 

8 (A) IN GENERAL.—Subparagraph (A) of 

9 section 42(i)(7) of the Internal Revenue Code of 

10 1986, as amended by subsection (a), is amend11 ed by striking ‘‘the property’’ and inserting 

12 ‘‘the property or all of the partnership interests 

13 (other than interests of the person exercising 

14 such option or a related party thereto (within 

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

16 relating to the property’’. 

17 (B) APPLICATION TO S CORPORATIONS

18 AND OTHER PASS-THROUGH ENTITIES.—Sub19 paragraph (A) of section 42(i)(7) of such Code 

20 is amended by adding at the end the following: 

21 ‘‘Except as provided by the Secretary, the rules 

22 of this paragraph shall apply to S corporations 

23 and other pass-through entities in the same 

24 manner as such rules apply to partnerships.’’. 


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1 (C) CONFORMING AMENDMENT.—Subpara2 graph (B) of section 42(i)(7) of such Code is 

3 amended by adding at the end the following: 

4 ‘‘In the case of a purchase of all of the partner5 ship interests, the minimum purchase price 

6 under this subparagraph shall be an amount 

7 not less than the sum of the interests’ shares 

8 of the amount which would be determined with 

9 respect to the property under this subparagraph 

10 without regard to this sentence.’’. 

11 (2) PROPERTY INCLUDES ASSETS RELATING TO

12 THE BUILDING.—Paragraph (7) of section 42(i) of 

13 such Code is amended by adding at the end the fol14 lowing new subparagraph: 

15 ‘‘(C) PROPERTY.—For purposes of sub16 paragraph (A), the term ‘property’ may include 

17 all or any of the assets held for the develop18 ment, operation, or maintenance of a build19 ing.’’. 

20 (3) EXERCISE OF RIGHT OF FIRST REFUSAL

21 AND PURCHASE OPTIONS.—Subparagraph (A) of 

22 section 42(i)(7) of such Code, as amended by sub23 section (a) and paragraph (1)(A), is amended by 

24 adding at the end the following: ‘‘For purposes of 

25 determining whether an option, including a right of 


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1 first refusal, to purchase property or all of the part2 nership interests holding (directly or indirectly) such 

3 property is described in the preceding sentence— 

4 ‘‘(i) such option or right of first re5 fusal shall be exercisable with or without 

6 the approval of any owner of the project 

7 (including any partner, member, or affili8 ated organization of such an owner), and 

9 ‘‘(ii) a right of first refusal shall be 

10 exercisable in response to any offer to pur11 chase the property or all of the partnership 

12 interests, including an offer by a related 

13 party.’’. 

14 (c) OTHER CONFORMING AMENDMENT.—Subpara15 graph (B) of section 42(i)(7) of the Internal Revenue Code 

16 of 1986, as amended by subsection (b), is amended by 

17 striking ‘‘the sum of’’ and all that follows through ‘‘appli18 cation of clause (ii).’’ and inserting the following: ‘‘the 

19 principal amount of outstanding indebtedness secured by 

20 the building (other than indebtedness incurred within the 

21 5-year period ending on the date of the sale to the ten22 ants).’’. 

23 (d) EFFECTIVE DATES.— 

24 (1) MODIFICATION OF RIGHT OF FIRST RE25 FUSAL.—The amendments made by subsections (a) 


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1 and (c) shall apply to agreements entered into or 

2 amended after the date of the enactment of this Act. 

3 (2) CLARIFICATION.—The amendments made 

4 by subsection (b) shall apply to agreements among 

5 the owners of the project (including partners, mem6 bers, and their affiliated organizations) and persons 

7 described in section 42(i)(7)(A) of the Internal Rev8 enue Code of 1986 entered into before, on, or after 

9 the date of the enactment of this Act. 

10 (3) NO EFFECT ON AGREEMENTS.—None of the 

11 amendments made by this section is intended to su12 persede express language in any agreement with re13 spect to the terms of a right of first refusal or op14 tion permitted by section 42(i)(7) of the Internal 

15 Revenue Code of 1986 in effect on the date of the 

16 enactment of this Act. 

17 SEC. 209. PROHIBITION OF LOCAL APPROVAL AND CON18 TRIBUTION REQUIREMENTS. 

19 (a) IN GENERAL.—Paragraph (1) of section 42(m) 

20 of the Internal Revenue Code of 1986 is amended— 

21 (1) by striking clause (ii) of subparagraph (A) 

22 and by redesignating clauses (iii) and (iv) thereof as 

23 clauses (ii) and (iii), respectively; and 

24 (2) by adding at the end the following new sub25 paragraph: 


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1 ‘‘(E) LOCAL APPROVAL OR CONTRIBUTION

2 NOT TAKEN INTO ACCOUNT.—The selection cri3 teria under a qualified allocation plan shall not 

4 include consideration of— 

5 ‘‘(i) any support or opposition with re6 spect to the project from local or elected 

7 officials, or 

8 ‘‘(ii) any local government contribu9 tion to the project, except to the extent 

10 such contribution is taken into account as 

11 part of a broader consideration of the 

12 project’s ability to leverage outside funding 

13 sources, and is not prioritized over any 

14 other source of outside funding.’’. 

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

16 this section shall apply to allocations of housing credit dol17 lar amounts made after December 31, 2023. 

18 SEC. 210. INCREASE IN CREDIT FOR LOW-INCOME HOUSING 

19 SUPPORTIVE SERVICES. 

20 (a) IN GENERAL.—Paragraph (5) of section 42(d) of 

21 the Internal Revenue Code of 1986, as amended by section 

22 203, is further amended by adding at the end the following 

23 new subparagraphs: 

24 ‘‘(D) INCREASE IN CREDIT FOR PROVIDING

25 SUPPORTIVE SERVICES.— 


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

2 building which includes common areas, or 

3 property used therein, dedicated to the 

4 provision of on-site qualified supportive 

5 services, except as provided in subpara6 graphs (E) and (F), the eligible basis of 

7 the portion of the building which is com8 prised of such areas or property (after the 

9 application of subparagraphs (A) and (B)) 

10 shall be increased by an amount equal to 

11 50 percent of such basis determined with12 out regard to this subparagraph and sub13 paragraphs (B) and (C). 

14 ‘‘(ii) QUALIFIED SUPPORTIVE SERV15 ICES.—For purposes of clause (i), the term 

16 ‘qualified supportive services’ means serv17 ices— 

18 ‘‘(I) provided by the owner of a 

19 building (directly or through contracts 

20 with third-party service providers) pri21 marily to tenants of the building, 

22 ‘‘(II) which are intended to pro23 mote economic self-sufficiency and 

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1 nent housing, including childcare or 

2 eldercare services, health services, co3 ordination of tenant benefits, job 

4 training, financial counseling, resident 

5 engagement services, or such other 

6 similar services as may be defined by 

7 the allocating agency in the qualified 

8 allocation plan, 

9 ‘‘(III) which are provided to ten10 ants and other beneficiaries as may be 

11 specified by the housing credit agency, 

12 including specifications as to which 

13 services may be provided to non-ten14 ants, 

15 ‘‘(IV) which are provided at no 

16 cost to beneficiaries other than any 

17 fee, copay, or coinsurance customarily 

18 charged by service providers for simi19 lar services, and 

20 ‘‘(V) usage of or participation in 

21 which is not a condition of tenancy in 

22 the building. 

23 Such term includes reasonable and nec24 essary measures for the provision of such 

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1 ants and other beneficiaries in and coordi2 nate such services, and measures required 

3 to obtain the certification described in sub4 paragraph (E)(ii)(III). 

5 ‘‘(E) EXTENDED SUPPORTIVE SERVICES

6 COMMITMENT.— 

7 ‘‘(i) IN GENERAL.—Subparagraph 

8 (D)(i) shall not apply to a building for any 

9 taxable year unless an extended supportive 

10 services commitment is in effect for such 

11 taxable year. 

12 ‘‘(ii) EXTENDED SUPPORTIVE SERV13 ICES COMMITMENT.—The term ‘extended 

14 supportive services commitment’ means 

15 any agreement between the owner of a 

16 building and the housing credit agency 

17 which— 

18 ‘‘(I) provides estimates of the 

19 amounts to be spent, updated at least 

20 once every 5 years, on the provision of 

21 qualified supportive services to ten22 ants of such building and other bene23 ficiaries for each taxable year remain24 ing in the credit period, 


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1 ‘‘(II) requires the designation of 

2 one or more individuals to engage ten3 ants regarding, and coordinate deliv4 ery of, qualified supportive services, 

5 ‘‘(III) requires the maintenance 

6 of an appropriate certification, as de7 termined by the Secretary in consulta8 tion with the housing credit agencies, 

9 for qualified supportive services, sub10 ject to recertification at least once 

11 every 5 years, 

12 ‘‘(IV) requires appropriate an13 nual reporting to the housing credit 

14 agency on expenditures and outcomes, 

15 as determined by such agency, and 

16 ‘‘(V) is binding on all successors 

17 in ownership of such building. 

18 ‘‘(iii) EXCEPTIONS IF FORECLOSURE

19 OR IF NO BUYER WILLING TO MAINTAIN

20 SERVICES.—The requirement of clause 

21 (ii)(V) for any building shall terminate on 

22 the date the building is acquired by fore23 closure (or instrument in lieu of fore24 closure) unless the housing credit agency 

25 determines that such acquisition is part of 


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1 an arrangement with the taxpayer a pur2 pose of which is to terminate such require3 ment. 

4 ‘‘(iv) EFFECT OF NONCOMPLIANCE.— 

5 If, during a taxable year, there is a deter6 mination by the housing credit agency that 

7 an extended supportive services commit8 ment was not in effect as of the beginning 

9 of such year or that there is evidence of 

10 other noncompliance as determined by the 

11 housing credit agency (including failure to 

12 provide qualified supportive services)— 

13 ‘‘(I) such determination shall not 

14 apply to any period before such year 

15 and subparagraph (D)(i) shall apply 

16 to such taxable year without regard to 

17 such determination if the failure is 

18 corrected within 1 year from the date 

19 of the determination, and 

20 ‘‘(II) in the case of any year to 

21 which such determination does apply, 

22 if the failure is not corrected within 1 

23 year from the date of the determina24 tion, the credit recapture amount 

25 under subsection (j)(1) for the year in 


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1 which such 1 year period expires shall 

2 be increased by the amount of any in3 crease in the credit under this section 

4 by reason of subparagraph (D)(i) for 

5 the year to which the determination 

6 applies. 

7 ‘‘(v) PROJECTS WHICH CONSIST OF

8 MORE THAN 1 BUILDING.—Rules similar to 

9 the rules of subsection (h)(7)(J) shall 

10 apply. 

11 ‘‘(F) RESPONSIBILITIES OF HOUSING

12 CREDIT AGENCY.—Subparagraph (D)(i) shall 

13 not apply to a building for any taxable year un14 less— 

15 ‘‘(i) the housing credit agency sets 

16 forth criteria— 

17 ‘‘(I) to determine appropriate, 

18 evidence-based supportive services, 

19 ‘‘(II) for the selection of appro20 priate and competent service pro21 viders, and 

22 ‘‘(III) which common areas or 

23 property described in subparagraph 

24 (D)(i) shall meet in order to qualify 


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1 for the increase in credit under sub2 paragraph (D), 

3 ‘‘(ii) the housing credit agency pro4 vides a procedure that the agency (or an 

5 agent or other private contractor of such 

6 agency) shall follow in monitoring for non7 compliance with the provisions of this sub8 paragraph and subparagraphs (D) and (E) 

9 and in reporting such noncompliance to the 

10 Secretary, and 

11 ‘‘(iii) appropriate books and records 

12 for expenditures with respect to the quali13 fied supportive services are maintained on 

14 an annual basis, and are available for in15 spection upon request by the housing cred16 it agency.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to buildings which receive alloca19 tions of housing credit dollar amount or, in the case of 

20 projects financed by tax-exempt obligations as described 

21 in section 42(h)(4) of the Internal Revenue Code of 1986, 

22 which are first taken into account under section 146 of 

23 such Code, after the date of the enactment of this Act. 


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1 SEC. 211. STUDY OF TAX INCENTIVES FOR THE CONVER2 SION OF COMMERCIAL PROPERTY TO AF3 FORDABLE HOUSING. 

4 Within 6 months of the date of the enactment of this 

5 Act, the Secretary of the Treasury, the Secretary of Hous6 ing and Urban Development, the Deputy Under Secretary 

7 for Rural Development of the Department of Agriculture, 

8 and the Director of the Office of Management and Budget 

9 shall collaborate to produce a cost-benefit analysis of pro10 viding tax incentives, including the non-recognition of cap11 ital gains, to the owners of vacant or under-utilized com12 mercial real estate in exchange for selling these properties 

13 to State, local, or tribal housing finance agencies for con14 version to affordable rental housing for low-income resi15 dents, including shelters for the homeless. 

16 SEC. 212. RENTERS CREDIT. 

17 (a) IN GENERAL.—Subpart C of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of 

19 1986 is amended by inserting after section 36B the fol20 lowing new section: 

21 ‘‘SEC. 36C. RENTERS CREDIT. 

22 ‘‘(a) ALLOWANCE OF CREDIT.— 

23 ‘‘(1) IN GENERAL.—There shall be allowed as a 

24 credit against the tax imposed by this subtitle for 

25 any taxable year an amount equal to the sum of the 

26 amounts determined under paragraph (2) for all 


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1 qualified buildings with a credit period which in2 cludes months occurring during the taxable year. 

3 ‘‘(2) QUALIFIED BUILDING AMOUNT.—The 

4 amount determined under this paragraph with re5 spect to any qualified building for any taxable year 

6 shall be an amount equal to the lesser of— 

7 ‘‘(A) the aggregate qualified rental reduc8 tion amounts for all eligible units within such 

9 building for months occurring during the tax10 able year which are within the credit period for 

11 such building, or 

12 ‘‘(B) the rental reduction credit amount al13 located to such building for such months. 

14 ‘‘(3) QUALIFIED BUILDING.—For purposes of 

15 this section— 

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

17 building’ means any building which is residen18 tial rental property (as defined in section 

19 168(e)(2)(A)) of the taxpayer with respect to 

20 which— 

21 ‘‘(i) a rental reduction credit amount 

22 has been allocated by a rental reduction 

23 credit agency of a State, and 

24 ‘‘(ii) a qualified rental reduction 

25 agreement is in effect. 


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1 ‘‘(B) BUILDING NOT DISQUALIFIED BY

2 OTHER ASSISTANCE.—A building shall not fail 

3 to be treated as a qualified building merely be4 cause— 

5 ‘‘(i) a credit was allowed under section 

6 42 with respect to such building or there 

7 was any other Federal assistance in the 

8 construction or rehabilitation of such 

9 building, 

10 ‘‘(ii) the rehabilitation credit deter11 mined under section 47 was allowed under 

12 section 38 with respect to such building, or 

13 ‘‘(iii) Federal rental assistance was 

14 provided for such building during any pe15 riod preceding the credit period. 

16 ‘‘(b) QUALIFIED RENTAL REDUCTION AMOUNT.— 

17 For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified rental 

19 reduction amount’ means, with respect to any eligi20 ble unit for any month, an amount equal to the ap21 plicable percentage (as determined under subsection 

22 (e)(1)) of the excess of— 

23 ‘‘(A) the applicable rent for such unit, over 

24 ‘‘(B) the family rental payment required 

25 for such unit. 


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1 ‘‘(2) APPLICABLE RENT.— 

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

3 rent’ means, with respect to any eligible unit 

4 for any month, the lesser of— 

5 ‘‘(i) the amount of rent which would 

6 be charged for a substantially similar unit 

7 with the same number of bedrooms in the 

8 same building which is not an eligible unit, 

9 or 

10 ‘‘(ii) an amount equal to the market 

11 rent standard for such unit. 

12 ‘‘(B) MARKET RENT STANDARD.— 

13 ‘‘(i) IN GENERAL.—The market rent 

14 standard with respect to any eligible unit 

15 is— 

16 ‘‘(I) the small area fair market 

17 rent determined by the Secretary of 

18 Housing and Urban Development for 

19 units with the same number of bed20 rooms in the same zip code tabulation 

21 area, or 

22 ‘‘(II) if there is no rent described 

23 in subclause (I) for such area, the fair 

24 market rent determined by such SecVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 retary for units with the same number 

2 of bedrooms in the same county. 

3 ‘‘(ii) STATE OPTION.—A State may in 

4 its rental reduction allocation plan provide 

5 that the market rent standard for all (or 

6 any part) of a zip code tabulation area or 

7 county within the State shall be equal to a 

8 percentage (not less than 75 nor more 

9 than 125) of the amount determined under 

10 clause (i) (after application of clause (iii)) 

11 for such area or county. 

12 ‘‘(iii) MINIMUM AMOUNT.—Notwith13 standing clause (i), the market rent stand14 ard with respect to any eligible unit for 

15 any year in the credit period after the first 

16 year in the credit period for such unit shall 

17 not be less than the market rent standard 

18 determined for such first year. 

19 ‘‘(3) FAMILY RENTAL PAYMENT REQUIRE20 MENTS.— 

21 ‘‘(A) IN GENERAL.—Each qualified rental 

22 reduction agreement with respect to any quali23 fied building shall require that the family rental 

24 payment for an eligible unit within such buildVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00107 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 ing for any month shall be equal to the lesser 

2 of— 

3 ‘‘(i) 30 percent of the monthly family 

4 income of the residents of the unit (as de5 termined under subsection (e)(5)), or 

6 ‘‘(ii) the applicable rent for such unit. 

7 ‘‘(B) UTILITY COSTS.—Any utility allow8 ance (determined by the Secretary in the same 

9 manner as under section 42(g)(2)(B)(ii)) paid 

10 by residents of an eligible unit shall be taken 

11 into account as rent in determining the family 

12 rental payment for such unit for purposes of 

13 this paragraph. 

14 ‘‘(c) RENTAL REDUCTION CREDIT AMOUNT.—For 

15 purposes of this section— 

16 ‘‘(1) DETERMINATION OF AMOUNT.— 

17 ‘‘(A) IN GENERAL.—The term ‘rental re18 duction credit amount’ means, with respect to 

19 any qualified building, the dollar amount which 

20 is allocated to such building (and to eligible 

21 units within such building) under this sub22 section. Such dollar amount shall be allocated 

23 to months in the credit period with respect to 

24 such building (and such units) on the basis of 

25 the estimates described in paragraph (2)(B). 


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1 ‘‘(B) ALLOCATION ON PROJECT BASIS.—In 

2 the case of a project which includes (or will in3 clude) more than 1 building, the rental reduc4 tion credit amount shall be the dollar amount 

5 which is allocated to such project for all build6 ings included in such project. Subject to the 

7 limitation under subsection (e)(3)(B), such 

8 amount shall be allocated among such buildings 

9 in the manner specified by the taxpayer unless 

10 the qualified rental reduction agreement with 

11 respect to such project provides for such alloca12 tion. 

13 ‘‘(2) STATE ALLOCATION.— 

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

15 subparagraph (C), each rental reduction credit 

16 agency of a State shall each calendar year allo17 cate its portion of the State rental reduction 

18 credit ceiling to qualified buildings (and to eligi19 ble units within each such building) in accord20 ance with the State rental reduction allocation 

21 plan. 

22 ‘‘(B) ALLOCATIONS TO EACH BUILDING.— 

23 The rental reduction credit amount allocated to 

24 any qualified building shall not exceed the ag25 gregate qualified rental reduction amounts 


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1 which such agency estimates will occur over the 

2 credit period for eligible units within such 

3 building, based on reasonable estimates of 

4 rents, family incomes, and vacancies in accord5 ance with procedures established by the State 

6 as part of its State rental reduction allocation 

7 plan. 

8 ‘‘(C) SPECIFIC ALLOCATIONS.— 

9 ‘‘(i) NONPROFIT ORGANIZATIONS.—At 

10 least 25 percent of the State rental reduc11 tion credit ceiling for any State for any 

12 calendar year shall be allocated to qualified 

13 buildings in which a qualified nonprofit or14 ganization (as defined in section 

15 42(h)(5)(C)) owns (directly or through 1 

16 or more partnerships) an interest and ma17 terially participates (within the meaning of 

18 section 469(h)) in the operation of the 

19 building throughout the credit period. A 

20 State may waive or lower the requirement 

21 under this clause for any calendar year if 

22 it determines that meeting such require23 ment is not feasible. 

24 ‘‘(ii) RURAL AREAS.— 


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1 ‘‘(I) IN GENERAL.—The State 

2 rental reduction credit ceiling for any 

3 State for any calendar year shall be 

4 allocated to buildings in rural areas 

5 (as defined in section 520 of the 

6 Housing Act of 1949) in an amount 

7 which, as determined by the Secretary 

8 of Housing and Urban Development, 

9 bears the same ratio to such ceiling as 

10 the number of extremely low-income 

11 households with severe rent burdens 

12 in such rural areas bears to the total 

13 number of such households in the 

14 State. 

15 ‘‘(II) ALTERNATIVE 5-YEAR

16 TESTING PERIOD.—In the case of the 

17 5-calendar year period beginning in 

18 2023, a State shall not be treated as 

19 failing to meet the requirements of 

20 subclause (I) for any calendar year in 

21 such period if, as determined by the 

22 Secretary, the average annual amount 

23 allocated to such rural areas during 

24 such period meets such requirements. 


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1 ‘‘(3) APPLICATION OF ALLOCATED CREDIT

2 AMOUNT.— 

3 ‘‘(A) AMOUNT AVAILABLE TO TAXPAYER

4 FOR ALL MONTHS IN CREDIT PERIOD.—Any 

5 rental reduction credit amount allocated to any 

6 qualified building out of the State rental reduc7 tion credit ceiling for any calendar year shall 

8 apply to such building for all months in the 

9 credit period ending during or after such cal10 endar year. 

11 ‘‘(B) CEILING FOR ALLOCATION YEAR RE12 DUCED BY ENTIRE CREDIT AMOUNT.—Any 

13 rental reduction credit amount allocated to any 

14 qualified building out of an allocating agency’s 

15 State rental reduction credit ceiling for any cal16 endar year shall reduce such ceiling for such 

17 calendar year by the entire amount so allocated 

18 for all months in the credit period (as deter19 mined on the basis of the estimates under para20 graph (2)(B)) and no reduction shall be made 

21 in such agency’s State rental reduction credit 

22 ceiling for any subsequent calendar year by rea23 son of such allocation. 

24 ‘‘(4) STATE RENTAL REDUCTION CREDIT CEIL25 ING.— 


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1 ‘‘(A) IN GENERAL.—The State rental re2 duction credit ceiling applicable to any State for 

3 any calendar year shall be an amount equal to 

4 the sum of— 

5 ‘‘(i) the greater of— 

6 ‘‘(I) the per capita dollar amount 

7 multiplied by the State population, or 

8 ‘‘(II) the minimum ceiling 

9 amount, plus 

10 ‘‘(ii) the amount of the State rental 

11 reduction credit ceiling returned in the cal12 endar year. 

13 ‘‘(B) RETURN OF STATE CEILING

14 AMOUNTS.—For purposes of subparagraph 

15 (A)(ii), except as provided in subsection (d)(2), 

16 the amount of the State rental reduction credit 

17 ceiling returned in a calendar year equals the 

18 amount of the rental reduction credit amount 

19 allocated to any building which, after the close 

20 of the calendar year for which the allocation is 

21 made— 

22 ‘‘(i) is canceled by mutual consent of 

23 the rental reduction credit agency and the 

24 taxpayer because the estimates made under 


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1 paragraph (2)(B) were substantially incor2 rect, or 

3 ‘‘(ii) is canceled by the rental reduc4 tion credit agency because the taxpayer 

5 violates the qualified rental reduction 

6 agreement and, under the terms of the 

7 agreement, the rental reduction credit 

8 agency is authorized to cancel all (or any 

9 portion) of the allocation by reason of the 

10 violation. 

11 ‘‘(C) PER CAPITA DOLLAR AMOUNT; MIN12 IMUM CEILING AMOUNT.—For purposes of this 

13 paragraph— 

14 ‘‘(i) PER CAPITA DOLLAR AMOUNT.— 

15 The per capita dollar amount is— 

16 ‘‘(I) for calendar year 2023, 

17 $12.30, 

18 ‘‘(II) for calendar year 2024, 

19 $24.50, and 

20 ‘‘(III) for calendar years 2025 

21 and thereafter, $36.75. 

22 ‘‘(ii) MINIMUM CEILING AMOUNT.— 

23 The minimum ceiling amount is— 

24 ‘‘(I) for calendar year 2023, 

25 $14,000,000, 


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1 ‘‘(II) for calendar year 2024, 

2 $28,000,000, and 

3 ‘‘(III) for calendar years 2025 

4 and thereafter, $42,000,000. 

5 ‘‘(iii) COST-OF-LIVING ADJUST6 MENT.—In the case of a calendar year be7 ginning after 2025, the $36.75 and 

8 $42,000,000 amounts in clauses (i)(III) 

9 and (ii)(III) shall each be increased by an 

10 amount equal to— 

11 ‘‘(I) such dollar amount, multi12 plied by 

13 ‘‘(II) the cost-of-living adjust14 ment determined under section 1(f)(3) 

15 for such calendar year by substituting 

16 ‘calendar year 2024’ for ‘calendar 

17 year 2016’ in subparagraph (A)(ii) 

18 thereof. 

19 In the case of the $42,000,000 amount, 

20 any increase under this clause which is not 

21 a multiple of $5,000 shall be rounded to 

22 the next lowest multiple of $5,000 and in 

23 the case of the $36.75 amount, any in24 crease under this clause which is not a 


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1 multiple of 5 cents shall be rounded to the 

2 next lowest multiple of 5 cents. 

3 ‘‘(D) POPULATION.—For purposes of this 

4 paragraph, population shall be determined in 

5 accordance with section 146(j). 

6 ‘‘(E) UNUSED RENTAL REDUCTION CREDIT

7 ALLOCATED AMONG CERTAIN STATES.— 

8 ‘‘(i) IN GENERAL.—The unused rental 

9 reduction credit of a State for any cal10 endar year shall be assigned to the Sec11 retary for allocation among qualified 

12 States for the succeeding calendar year. 

13 ‘‘(ii) UNUSED RENTAL REDUCTION

14 CREDIT.—For purposes of this subpara15 graph, the unused rental reduction credit 

16 of a State for any calendar year is the ex17 cess (if any) of— 

18 ‘‘(I) the State rental reduction 

19 credit ceiling for the year preceding 

20 such year, over 

21 ‘‘(II) the aggregate rental reduc22 tion credit amounts allocated for such 

23 year. 

24 ‘‘(iii) FORMULA FOR ALLOCATION OF

25 UNUSED CREDIT AMONG QUALIFIED


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1 STATES.—The amount allocated under this 

2 subparagraph to a qualified State for any 

3 calendar year shall be the amount deter4 mined by the Secretary to bear the same 

5 ratio to the aggregate unused rental reduc6 tion credits of all States for the preceding 

7 calendar year as such State’s population 

8 for the calendar year bears to the popu9 lation of all qualified States for the cal10 endar year. For purposes of the preceding 

11 sentence, population shall be determined in 

12 accordance with section 146(j). 

13 ‘‘(iv) QUALIFIED STATE.—For pur14 poses of this subparagraph, the term 

15 ‘qualified State’ means, with respect to a 

16 calendar year, any State— 

17 ‘‘(I) which allocated its entire 

18 State rental reduction credit ceiling 

19 for the preceding calendar year, and 

20 ‘‘(II) for which a request is made 

21 (at such time and in such manner as 

22 the Secretary may prescribe) to re23 ceive an allocation under clause (iii). 

24 ‘‘(5) OTHER DEFINITIONS.—For purposes of 

25 this section— 


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1 ‘‘(A) RENTAL REDUCTION CREDIT AGEN2 CY.—The term ‘rental reduction credit agency’ 

3 means any agency authorized by a State to 

4 carry out this section. Such authorization shall 

5 include the jurisdictions within the State where 

6 the agency may allocate rental reduction credit 

7 amounts. 

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

9 The term ‘State’ includes a possession of the 

10 United States. 

11 ‘‘(C) FAMILY.—The term ‘family’ has the 

12 same meaning as when used in the United 

13 States Housing Act of 1937. 

14 ‘‘(d) MODIFICATIONS TO CORRECT INACCURATE

15 AMOUNTS DUE TO INCORRECT ESTIMATES.— 

16 ‘‘(1) ESTABLISHMENT OF RESERVES.— 

17 ‘‘(A) IN GENERAL.—Each rental reduction 

18 credit agency of a State shall establish a reserve 

19 for the transfer and reallocation of amounts 

20 pursuant to this paragraph, and notwith21 standing any other provision of this section, the 

22 rental reduction credit amount allocated to any 

23 building by such agency shall be zero unless 

24 such agency has in effect such a reserve at the 

25 time of the allocation of such credit amount. 


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1 ‘‘(B) TRANSFERS TO RESERVE.— 

2 ‘‘(i) IN GENERAL.—If, for any taxable 

3 year, a taxpayer would (but for this sub4 paragraph) not be able to use the entire 

5 rental reduction credit amount allocated to 

6 a qualified building by a rental reduction 

7 credit agency of a State for the taxable 

8 year because of a rental reduction short9 fall, then the taxpayer shall for the taxable 

10 year transfer to the reserve established by 

11 such agency under subparagraph (A) an 

12 amount equal to such rental reduction 

13 shortfall. 

14 ‘‘(ii) RENTAL REDUCTION SHORT15 FALL.—For purposes of this subpara16 graph, the rental reduction shortfall for 

17 any qualified building for any taxable year 

18 is the amount by which the aggregate 

19 amount of the excesses determined under 

20 subsection (b)(1) for all eligible units with21 in such building are less than such aggre22 gate amount estimated under subsection 

23 (c)(2)(B) for the taxable year. 

24 ‘‘(iii) TREATMENT OF TRANSFERRED

25 AMOUNT.—For purposes of subsection 


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1 (a)(2)(A), the aggregate qualified rental 

2 reduction amounts for all eligible units 

3 within a qualified building with respect to 

4 which clause (i) applies for any taxable 

5 year shall be increased by an amount equal 

6 to the applicable percentage (determined 

7 under subsection (e)(1) for the building) of 

8 the amount of the transfer to the reserve 

9 under clause (i) with respect to such build10 ing for such taxable year. 

11 ‘‘(C) REALLOCATION OF AMOUNTS TRANS12 FERRED.— 

13 ‘‘(i) IN GENERAL.—If, for any taxable 

14 year— 

15 ‘‘(I) the aggregate qualified rent16 al reduction amounts for all eligible 

17 units within a qualified building for 

18 the taxable year, exceed 

19 ‘‘(II) the rental reduction credit 

20 amount allocated to such building by 

21 a rental reduction credit agency of a 

22 State for the taxable year (determined 

23 after any increase under paragraph 

24 (2)), 


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1 the rental reduction credit agency shall, 

2 upon application of the taxpayer, pay to 

3 the taxpayer from the reserve established 

4 by such agency under subparagraph (A) 

5 the amount which, when multiplied by the 

6 applicable percentage (determined under 

7 subsection (e)(1) for the building), equals 

8 such excess. If the amount in the reserve 

9 is less than the amounts requested by all 

10 taxpayers for taxable years ending within 

11 the same calendar year, the agency shall 

12 ratably reduce the amount of each pay13 ment otherwise required to be made. 

14 ‘‘(ii) EXCESS RESERVE AMOUNTS.—If 

15 a rental reduction credit agency of a State 

16 determines that the balance in its reserve 

17 is in excess of the amounts reasonably 

18 needed over the following 5 calendar years 

19 to make payments under clause (i), the 

20 agency may withdraw such excess but only 

21 to— 

22 ‘‘(I) reduce the rental payments 

23 of eligible tenants in a qualified build24 ing in units other than eligible units, 

25 or of eligible tenants in units in a 


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1 building other than a qualified build2 ing, to amounts no higher than the 

3 sum of rental payments required for 

4 eligible tenants in qualified buildings 

5 under subsection (b)(3) and any rent6 al charges to such tenants in excess of 

7 the market rent standard; or 

8 ‘‘(II) address maintenance and 

9 repair needs in qualified buildings 

10 that cannot reasonably be met using 

11 other resources available to the own12 ers of such buildings. 

13 ‘‘(D) ADMINISTRATION.—Each rental re14 duction credit agency of a State shall establish 

15 procedures for the timing and manner of trans16 fers and payments made under this paragraph. 

17 ‘‘(E) SPECIAL RULE FOR PROJECTS.—In 

18 the case of a rental reduction credit allocated to 

19 a project consisting of more than 1 qualified 

20 building, a taxpayer may elect to have this 

21 paragraph apply as if all such buildings were 1 

22 qualified building if the applicable percentage 

23 for each such building is the same. 

24 ‘‘(F) ALTERNATIVE METHODS OF TRANS25 FER AND REALLOCATION.—Upon request to, 


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•S 680 IS

1 and approval by, the Secretary, a State may es2 tablish an alternative method for the transfer 

3 and reallocation of amounts otherwise required 

4 to be transferred to, and allocated from, a re5 serve under this paragraph. Any State adopting 

6 an alternative method under this subparagraph 

7 shall, at such time and in such manner as the 

8 Secretary prescribes, provide to the Secretary 

9 and the Secretary of Housing and Urban Devel10 opment detailed reports on the operation of 

11 such method, including providing such informa12 tion as such Secretaries may require. 

13 ‘‘(2) ALLOCATION OF RETURNED STATE CEIL14 ING AMOUNTS.—In the case of any rental reduction 

15 credit amount allocated to a qualified building which 

16 is canceled as provided in subsection (c)(4)(B)(i), 

17 the rental reduction credit agency may, in lieu of 

18 treating such allocation as a returned credit amount 

19 under subsection (c)(4)(A)(ii), elect to allocate, upon 

20 the request of the taxpayer, such amount to any 

21 other qualified building for which the credit amount 

22 allocated in any preceding calendar year was too 

23 small because the estimates made under subsection 

24 (c)(2)(B) were substantially incorrect. 


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1 ‘‘(3) RENTING TO NONELIGIBLE TENANTS.—If, 

2 after the application of paragraphs (1)(C) (or any 

3 similar reallocation under paragraph (1)(F)) and 

4 (2), a rental reduction credit agency of a State de5 termines that, because of the incorrect estimates 

6 under subsection (c)(2)(B), the aggregate qualified 

7 rental reduction amounts for all eligible units within 

8 a qualified building will (on an ongoing basis) exceed 

9 the rental reduction credit amount allocated to such 

10 building, a taxpayer may elect, subject to subsection 

11 (g)(2) and only to the extent necessary to eliminate 

12 such excess, rent vacant eligible units without regard 

13 to the requirements that such units be rented only 

14 to eligible tenants and at the rental rate determined 

15 under subsection (b)(3). 

16 ‘‘(e) TERMS RELATING TO RENTAL REDUCTION

17 CREDIT AND REQUIREMENTS.—For purposes of this sec18 tion— 

19 ‘‘(1) APPLICABLE PERCENTAGE.— 

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

21 percentage’ means, with respect to any qualified 

22 building, the percentage (not greater than 110 

23 percent) set by the rental reduction credit agen24 cy at the time it allocates the rental reduction 

25 dollar amount to such building. 


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1 ‘‘(B) HIGHER PERCENTAGE FOR HIGH-OP2 PORTUNITY AREAS.—The rental reduction cred3 it agency may set a percentage under subpara4 graph (A) up to 120 percent for any qualified 

5 building which— 

6 ‘‘(i) targets its eligible units for rental 

7 to families with children, and 

8 ‘‘(ii) is located in a neighborhood 

9 which has a poverty rate of no more than 

10 10 percent. 

11 ‘‘(2) CREDIT PERIOD.— 

12 ‘‘(A) IN GENERAL.—The term ‘credit pe13 riod’ means, with respect to any qualified build14 ing, the 15-year period beginning with the first 

15 month for which the qualified rental reduction 

16 agreement is in effect with respect to such 

17 building. 

18 ‘‘(B) STATE OPTION TO REDUCE PE19 RIOD.—A rental reduction credit agency may 

20 provide a credit period for any qualified build21 ing which is less than 15 years. 

22 ‘‘(3) ELIGIBLE UNIT.— 

23 ‘‘(A) IN GENERAL.—The term ‘eligible 

24 unit’ means, with respect to any qualified build25 ing, a unit— 


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1 ‘‘(i) which is occupied by an eligible 

2 tenant, 

3 ‘‘(ii) the rent of which for any month 

4 equals 30 percent of the monthly family in5 come of the residents of such unit (as de6 termined under paragraph (5)), 

7 ‘‘(iii) with respect to which the tenant 

8 is not concurrently receiving rental assist9 ance under any other Federal program, 

10 and 

11 ‘‘(iv) which is certified to the rental 

12 reduction credit agency as an eligible unit 

13 for purposes of this section and the quali14 fied rental reduction agreement. 

15 Notwithstanding clause (iii), a State may pro16 vide in its State rental reduction allocation plan 

17 that an eligible unit shall also not include a unit 

18 with respect to which any resident is receiving 

19 rental assistance under a State or local pro20 gram. 

21 ‘‘(B) LIMITATION ON NUMBER OF

22 UNITS.— 

23 ‘‘(i) IN GENERAL.—The number of 

24 units which may be certified as eligible 

25 units with respect to any qualified building 


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1 under subparagraph (A)(iv) at any time 

2 shall not exceed the greater of— 

3 ‘‘(I) 40 percent of the total units 

4 in such building, or 

5 ‘‘(II) 25 units. 

6 In the case of an allocation to a project 

7 under subsection (c)(1)(B), the limitation 

8 under the preceding sentence shall be ap9 plied on a project basis and the certifi10 cation of such eligible units shall be allo11 cated to each building in the project, ex12 cept that if buildings in such project are 

13 on non-contiguous tracts of land, buildings 

14 on each such tract shall be treated as a 

15 separate project for purposes of applying 

16 this sentence. 

17 ‘‘(ii) BUILDINGS RECEIVING PREVIOUS

18 FEDERAL RENTAL ASSISTANCE.—If, at any 

19 time prior to the entering into of a quali20 fied rental reduction agreement with re21 spect to a qualified building, tenants in 

22 units within such building had been receiv23 ing project-based rental assistance under 

24 any other Federal program, then, notwith25 standing clause (i), the maximum number 


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1 of units which may be certified as eligible 

2 units with respect to the building under 

3 subparagraph (A)(iv) shall not be less than 

4 the sum of— 

5 ‘‘(I) the maximum number of 

6 units in the building previously receiv7 ing such assistance at any time before 

8 the agreement takes effect, plus 

9 ‘‘(II) the amount determined 

10 under clause (i) without taking into 

11 account the units described in sub12 clause (I). 

13 ‘‘(4) ELIGIBLE TENANT.— 

14 ‘‘(A) IN GENERAL.—The term ‘eligible ten15 ant’ means any individual if the individual’s 

16 family income does not exceed the greater of— 

17 ‘‘(i) 30 percent of the area median 

18 gross income (as determined under section 

19 42(g)(1)), or 

20 ‘‘(ii) the applicable poverty line for a 

21 family of the size involved. 

22 ‘‘(B) TREATMENT OF INDIVIDUALS WHOSE

23 INCOMES RISE ABOVE LIMIT.— 

24 ‘‘(i) IN GENERAL.—Notwithstanding 

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1 dents of a unit above the income limitation 

2 applicable under subparagraph (A), such 

3 residents shall continue to be treated as el4 igible tenants if the family income of such 

5 residents initially met such income limita6 tion and such unit continues to be certified 

7 as an eligible unit under this section. 

8 ‘‘(ii) NO RENTAL REDUCTION FOR AT

9 LEAST 2 YEARS.—A qualified rental reduc10 tion agreement with respect to a qualified 

11 building shall provide that if, by reason of 

12 an increase in family income described in 

13 clause (i), there is no qualified rental re14 duction amount with respect to the dwell15 ing unit for 2 consecutive years, the tax16 payer shall rent the next available unit to 

17 an eligible tenant (without regard to 

18 whether such unit is an eligible unit under 

19 this section). 

20 ‘‘(C) APPLICABLE POVERTY LINE.—The 

21 term ‘applicable poverty line’ means the most 

22 recently published poverty line (within the 

23 meaning of section 2110(c)(5) of the Social Se24 curity Act (42 U.S.C. 1397jj(c)(5))) as of the 


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1 time of the determination as to whether an in2 dividual is an eligible tenant. 

3 ‘‘(5) FAMILY INCOME.— 

4 ‘‘(A) IN GENERAL.—Family income shall 

5 be determined in the same manner as under 

6 section 8 of the United States Housing Act of 

7 1937. 

8 ‘‘(B) TIME FOR DETERMINING INCOME.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in this subparagraph, family income 

11 shall be determined at least annually on 

12 the basis of income for the preceding cal13 endar year. 

14 ‘‘(ii) FAMILIES ON FIXED INCOME.—If 

15 at least 90 percent of the family income of 

16 the residents of a unit at the time of any 

17 determination under clause (i) is derived 

18 from payments under title II or XVI of the 

19 Social Security Act (or any similar fixed 

20 income amounts specified by the Sec21 retary), the taxpayer may elect to treat 

22 such payments (or amounts) as the family 

23 income of such residents for the year of 

24 the determination and the 2 succeeding 

25 years, except that the taxpayer shall, in 


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1 such manner as the Secretary may pre2 scribe, adjust such amount for increases in 

3 the cost of living. 

4 ‘‘(iii) INITIAL INCOME.—The Sec5 retary may allow a State to provide that 

6 the family income of residents at the time 

7 such residents first rent a unit in a quali8 fied building may be determined on the 

9 basis of current or anticipated income. 

10 ‘‘(iv) SPECIAL RULES WHERE FAMILY

11 INCOME IS REDUCED.—If residents of a 

12 unit establish (in such manner as the rent13 al reduction credit agency provides) that 

14 their family income has been reduced by at 

15 least 10 percent below such income for the 

16 determination year— 

17 ‘‘(I) such residents may elect, at 

18 such time and in such manner as such 

19 agency may prescribe, to have their 

20 family income redetermined, and 

21 ‘‘(II) clause (ii) shall not apply to 

22 any of the 2 succeeding years de23 scribed in such clause which are speci24 fied in the election. 


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1 ‘‘(f) STATE RENTAL REDUCTION ALLOCATION

2 PLAN.— 

3 ‘‘(1) ADOPTION OF PLAN REQUIRED.— 

4 ‘‘(A) IN GENERAL.—For purposes of this 

5 section— 

6 ‘‘(i) each State shall, before the allo7 cation of its State rental reduction credit 

8 ceiling, establish and have in effect a State 

9 rental reduction allocation plan, and 

10 ‘‘(ii) notwithstanding any other provi11 sion of this section, the rental reduction 

12 credit amount allocated to any building 

13 shall be zero unless such amount was allo14 cated pursuant to a State rental reduction 

15 allocation plan. 

16 Such plan shall only be adopted after such plan 

17 is made public and at least 60 days has been 

18 allowed for public comment. 

19 ‘‘(B) STATE RENTAL REDUCTION ALLOCA20 TION PLAN.—For purposes of this section, the 

21 term ‘State rental reduction allocation plan’ 

22 means, with respect to any State, any plan of 

23 the State meeting the requirements of para24 graphs (2) and (3). 


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1 ‘‘(2) GENERAL PLAN REQUIREMENTS.—A plan 

2 shall meet the requirements of this paragraph only 

3 if— 

4 ‘‘(A) the plan sets forth the criteria and 

5 priorities which a rental reduction credit agency 

6 of the State shall use in allocating the State 

7 rental reduction credit ceiling to eligible units 

8 within a building, 

9 ‘‘(B) the plan provides that no credit allo10 cation shall be made which is not in accordance 

11 with the criteria and priorities set forth under 

12 subparagraph (A) unless such agency provides 

13 a written explanation to the general public for 

14 any credit allocation which is not so made and 

15 the reasons why such allocation is necessary, 

16 and 

17 ‘‘(C) the plan provides that such agency is 

18 required to prioritize the renewal of existing 

19 credit allocations at the time of the expiration 

20 of the qualified rental reduction agreement with 

21 respect to the allocation, including, where ap22 propriate, a commitment within a qualified 

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1 ment have been met and sufficient new credit 

2 authority is available. 

3 ‘‘(3) SPECIFIC REQUIREMENTS.—A plan shall 

4 meet the requirements of this paragraph only if— 

5 ‘‘(A) the plan provides methods for deter6 mining— 

7 ‘‘(i) the amount of rent which would 

8 be charged for a substantially similar unit 

9 in the same building which is not an eligi10 ble unit for purposes of subsection 

11 (b)(2)(A)(i), including whether such deter12 mination may be made by self-certification 

13 or by undertaking rent reasonableness as14 sessments similar to assessments required 

15 under section 8(o)(10) of the United 

16 States Housing Act of 1937 (42 U.S.C. 

17 1437f(o)(10)), 

18 ‘‘(ii) the qualified rental reduction 

19 amounts under subsection (c)(2)(B), and 

20 ‘‘(iii) the applicable percentage under 

21 subsection (e)(1), 

22 ‘‘(B) the plan provides a procedure that 

23 the rental reduction credit agency (or an agent 

24 or other private contractor of such agency) will 

25 follow in monitoring for— 


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1 ‘‘(i) noncompliance with the provisions 

2 of this section and the qualified rental re3 duction agreement and in notifying the In4 ternal Revenue Service of any such non5 compliance of which such agency becomes 

6 aware, and 

7 ‘‘(ii) noncompliance with habitability 

8 standards through regular site visits, 

9 ‘‘(C) the plan requires a person receiving a 

10 credit allocation to report to the rental reduc11 tion credit agency such information as is nec12 essary to ensure compliance with the provisions 

13 of this section and the qualified rental reduction 

14 agreement, and 

15 ‘‘(D) the plan provides methods by which 

16 any excess reserve amounts which become avail17 able under subsection (d)(1)(C)(ii) will be used 

18 to reduce rental payments of eligible tenants or 

19 to address maintenance and repair needs in 

20 qualified buildings, including how such assist21 ance will be allocated among eligible tenants 

22 and qualified buildings. 

23 ‘‘(g) QUALIFIED RENTAL REDUCTION AGREE24 MENT.—For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified rental 

2 reduction agreement’ means, with respect to any 

3 building which is residential rental property (as de4 fined in section 168(e)(2)(A)), a written, binding 

5 agreement between a rental reduction credit agency 

6 and the taxpayer which specifies— 

7 ‘‘(A) the number of eligible units within 

8 such building for which a rental reduction cred9 it amount is being allocated, 

10 ‘‘(B) the credit period for such building, 

11 ‘‘(C) the rental reduction credit amount al12 located to such building (and dwelling units 

13 within such building) and the portion of such 

14 amount allocated to each month within the 

15 credit period under subsection (c)(2)(B), 

16 ‘‘(D) the applicable percentage to be used 

17 in computing the qualified rental reduction 

18 amounts with respect to the building, 

19 ‘‘(E) the method for determining the 

20 amount of rent which may be charged for eligi21 ble units within the building, and 

22 ‘‘(F) whether— 

23 ‘‘(i) the agency commits to entering 

24 into a new agreement with the taxpayer if 

25 the terms of the agreement have been met 


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1 and sufficient new credit authority is avail2 able for such new agreement, and 

3 ‘‘(ii) the taxpayer is required to accept 

4 such new agreement. 

5 ‘‘(2) TENANT PROTECTIONS.—A qualified rent6 al reduction agreement shall provide the following: 

7 ‘‘(A) NON-DISPLACEMENT OF NON-ELIGI8 BLE TENANTS.—A taxpayer receiving a rental 

9 reduction credit amount may not refuse to 

10 renew the lease of or evict (other than for good 

11 cause) a tenant of a unit who is not an eligible 

12 tenant at any time during the credit period and 

13 such unit shall not be treated as an eligible unit 

14 while such tenant resides there. 

15 ‘‘(B) ONLY GOOD CAUSE EVICTIONS OF

16 ELIGIBLE TENANTS.—A taxpayer receiving a 

17 rental reduction credit amount may not refuse 

18 to renew the lease of or evict (other than for 

19 good cause) an eligible tenant of an eligible 

20 unit. 

21 ‘‘(C) MOBILITY.—A taxpayer receiving a 

22 rental reduction credit amount shall— 

23 ‘‘(i) give priority to rent any available 

24 unit of suitable size to tenants who are eli25 gible tenants who are moving from another 


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1 qualified building where such tenants had 

2 lived at least 1 year and were in good 

3 standing, and 

4 ‘‘(ii) inform eligible tenants within the 

5 building of their right to move after 1 year 

6 and provide a list maintained by the State 

7 of qualified buildings where such tenants 

8 might move. 

9 ‘‘(iii) FAIR HOUSING AND CIVIL

10 RIGHTS.—If a taxpayer receives a rental 

11 reduction credit amount— 

12 ‘‘(I) such taxpayer shall comply 

13 with the Fair Housing Act with re14 spect to the building, and 

15 ‘‘(II) the receipt of such amount 

16 shall be treated as the receipt of Fed17 eral financial assistance for purposes 

18 of applying any Federal civil rights 

19 laws. 

20 ‘‘(iv) ADMISSIONS PREFERENCES.—A 

21 taxpayer receiving a rental reduction credit 

22 amount shall comply with any admissions 

23 preferences established by the State for 

24 tenants within particular demographic 

25 groups eligible for health or social services. 


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1 ‘‘(3) COMPLIANCE REQUIREMENTS.—A quali2 fied rental reduction agreement shall provide that a 

3 taxpayer receiving a rental reduction credit amount 

4 shall comply with all reporting and other procedures 

5 established by the State to ensure compliance with 

6 this section and such agreement. 

7 ‘‘(4) PROJECTS.—In the case of a rental reduc8 tion credit allocated to a project consisting of more 

9 than 1 building, the rental reduction credit agency 

10 may provide for a single qualified rental reduction 

11 agreement which applies to all buildings which are 

12 part of such project. 

13 ‘‘(h) CERTIFICATIONS AND OTHER REPORTS TO SEC14 RETARY.— 

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

16 YEAR OF CREDIT PERIOD.—Following the close of 

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

18 to any qualified building, the taxpayer shall certify 

19 to the Secretary (at such time and in such form and 

20 in such manner as the Secretary prescribes)— 

21 ‘‘(A) the information described in sub22 section (g)(1) required to be contained in the 

23 qualified rental reduction agreement with re24 spect to the building, and 


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1 ‘‘(B) such other information as the Sec2 retary may require. 

3 In the case of a failure to make the certification re4 quired by the preceding sentence on the date pre5 scribed therefor, unless it is shown that such failure 

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

7 no credit shall be allowable by reason of subsection 

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

9 year ending before such certification is made. 

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

11 The Secretary may require taxpayers to submit an 

12 information return (at such time and in such form 

13 and manner as the Secretary prescribes) for each 

14 taxable year setting forth— 

15 ‘‘(A) the information described in para16 graph (1)(A) for the taxable year, and 

17 ‘‘(B) such other information as the Sec18 retary may require. 

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

20 failure to submit the return required by the Sec21 retary under the preceding sentence on the date pre22 scribed therefor. 

23 ‘‘(3) ANNUAL REPORTS FROM RENTAL REDUC24 TION CREDIT AGENCY.— 


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1 ‘‘(A) REPORTS.—Each rental reduction 

2 credit agency which allocates any rental reduc3 tion credit amount to 1 or more buildings for 

4 any calendar year shall submit to the Secretary 

5 (at such time and in such manner as the Sec6 retary shall prescribe) an annual report speci7 fying— 

8 ‘‘(i) the amount of rental reduction 

9 credit amounts allocated to each such 

10 building for such year, 

11 ‘‘(ii) sufficient information to identify 

12 each such building and the taxpayer with 

13 respect thereto, 

14 ‘‘(iii) information as to the demo15 graphic and income characteristics of eligi16 ble tenants of all such buildings to which 

17 such amounts were allocated, and 

18 ‘‘(iv) such other information as the 

19 Secretary may require. 

20 ‘‘(B) PENALTY.—The penalty under sec21 tion 6652(j) shall apply to any failure to submit 

22 the report required by subparagraph (A) on the 

23 date prescribed therefor. 

24 ‘‘(C) INFORMATION MADE PUBLIC.—The 

25 Secretary shall, in consultation with Secretary 


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1 of Housing and Urban Development, make in2 formation reported under this paragraph for 

3 each qualified building available to the public 

4 annually to the greatest degree possible without 

5 disclosing personal information about individual 

6 tenants. 

7 ‘‘(i) SPECIAL RULE FOR PAYMENTS TO PARTNER8 SHIPS AND S CORPORATIONS.—For purposes of this sub9 title, in the case of any qualified building directly held by 

10 any partnership or S corporation, the payment under sec11 tion 6434 shall be made in lieu of the credit determined 

12 under this section with respect to such building. 

13 ‘‘(j) REGULATIONS AND GUIDANCE.—The Secretary 

14 shall prescribe such regulations or guidance as may be 

15 necessary to carry out the purposes of this section, includ16 ing— 

17 ‘‘(1) providing necessary forms and instruc18 tions, and 

19 ‘‘(2) providing for proper treatment of projects 

20 for which a credit is allowed both under this section 

21 and section 42.’’. 

22 (b) PAYMENT TO PARTNERSHIPS AND S CORPORA23 TIONS IN LIEU OF CREDIT.— 


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1 (1) IN GENERAL.—Subchapter B of chapter 65 

2 of the Internal Revenue Code of 1986 is amended by 

3 adding at the end the following new section: 

4 ‘‘SEC. 6434. PAYMENTS IN LIEU OF RENTERS CREDIT FOR 

5 PARTNERSHIPS AND S CORPORATIONS. 

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

7 building (as defined in section 36C(a)(3)) directly held by 

8 any partnership or S corporation, the Secretary shall pay 

9 to such partnership or S corporation for any taxable year 

10 an amount equal to the amount of the credit which, but 

11 for section 36C(i), would be allowed under section 36C 

12 with respect to such building. 

13 ‘‘(b) REGULATORY AUTHORITY.—The Secretary shall 

14 prescribe such regulations, rules, and guidance as may be 

15 necessary to carry out section 36C(i), section 92, and this 

16 section, including regulations, rules, and guidance pro17 viding for— 

18 ‘‘(1) the application of the rules under section 

19 36C with respect to payments under this section in 

20 the same manner as such rules apply for purposes 

21 of the credit under section 36C, 

22 ‘‘(2) the time and manner of payments under 

23 subsection (a), and 


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1 ‘‘(3) the determination of a partner’s distribu2 tive share, or an S corporation shareholder’s pro 

3 rata share, of any payment under subsection (a).’’. 

4 (2) CONFORMING AMENDMENT.—The table of 

5 sections for subchapter B of chapter 65 of the Inter6 nal Revenue Code of 1986 is amended by adding at 

7 the end the following new item: 

‘‘Sec. 6434. Payments in lieu of renters credit for partnerships and S corporations.’’. 

8 (c) CREDIT INCLUDIBLE IN GROSS INCOME.— 

9 (1) IN GENERAL.—Part II of subchapter B of 

10 chapter 1 of the Internal Revenue Code of 1986 is 

11 amended by adding at the end the following new sec12 tion: 

13 ‘‘SEC. 92. INCLUSION IN INCOME OF RENTERS CREDIT AND 

14 PAYMENTS. 

15 ‘‘Gross income includes the amount of the credit al16 lowed to the taxpayer under section 36C for the taxable 

17 year and the amount of any payment in lieu of such credit 

18 under section 6434.’’. 

19 (2) INCOME DISREGARDED FOR ALTERNATIVE

20 MINIMUM TAXABLE INCOME.—Section 56(a) of such 

21 Code is amended by adding at the end the following: 

22 ‘‘(8) SECTION 92 NOT APPLICABLE.—Section 92 

23 (relating to inclusion in income of renters credit) 

24 shall not apply.’’. 


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1 (3) CONFORMING AMENDMENT.—The table of 

2 sections for part II of subchapter B of chapter 1 of 

3 such Code is amended by adding at the end the fol4 lowing new item: 

‘‘Sec. 92. Inclusion in income of renters credit and payments.’’. 

5 (d) ADMINISTRATIVE FEES.—No provision of, or 

6 amendment made by, this Act shall be construed to pre7 vent a rental reduction credit agency of a State from im8 posing fees to cover its costs or from levying any such fee 

9 on a taxpayer applying for or receiving a rental reduction 

10 credit amount. 

11 (e) OTHER CONFORMING AMENDMENTS.— 

12 (1) Section 6211(b)(4) of the Internal Revenue 

13 Code of 1986 is amended by inserting ‘‘36C (includ14 ing any related payment under section 6434),’’ after 

15 ‘‘36B,’’. 

16 (2) Paragraph (2) of section 1324(b) of title 

17 31, United States Code, is amended by inserting 

18 ‘‘36C (including any related payment under section 

19 6434),’’ after ‘‘36B,’’. 

20 (3) The table of sections for subpart C of part 

21 IV of subchapter A of chapter 1 of the Internal Rev22 enue Code of 1986 is amended by inserting after the 

23 item relating to section 36B the following new item: 

‘‘Sec. 36C. Renters credit.’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2022. 

4 SEC. 213. MIDDLE-INCOME HOUSING TAX CREDIT. 

5 (a) IN GENERAL.—Subpart D of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of 

7 1986 is amended by inserting after section 42 the fol8 lowing new section: 

9 ‘‘SEC. 42A. MIDDLE-INCOME HOUSING CREDIT. 

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

11 amount of the middle-income housing credit determined 

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

13 shall be an amount equal to— 

14 ‘‘(1) the applicable percentage, of 

15 ‘‘(2) the qualified basis of each qualified mid16 dle-income building. 

17 ‘‘(b) APPLICABLE PERCENTAGE.— 

18 ‘‘(1) DETERMINATION OF APPLICABLE PER19 CENTAGE.—For purposes of this section— 

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

21 percentage’ means, with respect to any building, 

22 the appropriate percentage prescribed by the 

23 Secretary for the earlier of— 

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

25 is placed in service, or 


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

2 the month in which the taxpayer and the 

3 housing credit agency enter into an agree4 ment with respect to such building (which 

5 is binding on such agency, the taxpayer, 

6 and all successors in interest) as to the 

7 housing credit dollar amount to be allo8 cated to such building. 

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

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

11 day after the close of such month. Such an elec12 tion, once made, shall be irrevocable. 

13 ‘‘(B) METHOD OF PRESCRIBING PERCENT14 AGES.—The percentages prescribed by the Sec15 retary for any month shall be percentages which 

16 will yield over a 15-year period amounts of 

17 credit under subsection (a) which have a 

18 present value equal to— 

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

20 of a new building which is not Federally 

21 subsidized for the taxable year, and 

22 ‘‘(ii) 20 percent of the qualified basis 

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


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1 ‘‘(C) METHOD OF DISCOUNTING.—The 

2 present value under subparagraph (B) shall be 

3 determined— 

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

5 of the 15-year period referred to in sub6 paragraph (B), 

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

8 72 percent of the average of the annual 

9 Federal mid-term rate and the annual 

10 Federal long-term rate applicable under 

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

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

13 (A) and compounded annually, and 

14 ‘‘(iii) by assuming that the credit al15 lowable under this section for any year is 

16 received on the last day of such year. 

17 ‘‘(2) MINIMUM CREDIT RATE.— 

18 ‘‘(A) IN GENERAL.—The applicable per19 centage for any building which is not Federally 

20 subsidized for the taxable year shall not be less 

21 than 5 percent. 

22 ‘‘(B) MINIMUM CREDIT RATE FOR FEDER23 ALLY SUBSIDIZED BUILDINGS.—In the case of 

24 any building to which subparagraph (A) does 

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


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1 the applicable percentage shall not be less than 

2 2 percent. 

3 ‘‘(3) EXCEPTION FOR CERTAIN FEDERALLY

4 SUBSIDIZED BUILDINGS.—In the case of any build5 ing to which paragraph (2)(A) does not apply, the 

6 applicable percentage is zero unless— 

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

8 with respect to such building for the taxable 

9 year, and 

10 ‘‘(B) such building is financed by tax-ex11 empt bonds as described in section 42(h)(4). 

12 ‘‘(4) CROSS REFERENCES.— 

13 ‘‘(A) For treatment of certain rehabilita14 tion expenditures as separate new buildings, see 

15 subsection (e). 

16 ‘‘(B) For determination of applicable per17 centage for increases in qualified basis after the 

18 1st year of the credit period, see subsection 

19 (f)(3). 

20 ‘‘(C) For authority of housing credit agen21 cy to limit applicable percentage and qualified 

22 basis which may be taken into account under 

23 this section with respect to any building, see 

24 subsection (h)(6). 


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1 ‘‘(c) QUALIFIED BASIS; QUALIFIED MIDDLE-INCOME

2 BUILDING.—For purposes of this section— 

3 ‘‘(1) QUALIFIED BASIS.— 

4 ‘‘(A) DETERMINATION.—The qualified 

5 basis of any qualified middle-income building 

6 for any taxable year is an amount equal to— 

7 ‘‘(i) the applicable fraction (deter8 mined as of the close of such taxable year) 

9 of 

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

11 (determined under subsection (d)). 

12 ‘‘(B) APPLICABLE FRACTION.—For pur13 poses of subparagraph (A), the term ‘applicable 

14 fraction’ means the smaller of the unit fraction 

15 or the floor space fraction. 

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

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

18 means the fraction— 

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

20 number of middle-income units in the 

21 building, and 

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

23 number of residential rental units (whether 

24 or not occupied) in such building. 


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1 ‘‘(D) FLOOR SPACE FRACTION.—For pur2 poses of subparagraph (B), the term ‘floor 

3 space fraction’ means the fraction— 

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

5 total floor space of the middle-income units 

6 in such building, and 

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

8 total floor space of the residential rental 

9 units (whether or not occupied) in such 

10 building. 

11 ‘‘(2) QUALIFIED MIDDLE-INCOME BUILDING.— 

12 The term ‘qualified middle-income building’ means 

13 any building which is part of a qualified middle-in14 come housing project at all times during the pe15 riod— 

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

17 period on which such building is part of such a 

18 project, and 

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

20 period with respect to such building. 

21 ‘‘(d) ELIGIBLE BASIS.—For purposes of this sec22 tion— 

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

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

25 the 1st taxable year of the credit period. 


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1 ‘‘(2) EXISTING BUILDINGS.— 

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

3 an existing building is— 

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

5 meets the requirements of subparagraph 

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

7 the 1st taxable year of the credit period, 

8 and 

9 ‘‘(ii) zero in any other case. 

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

11 the requirements of this subparagraph if— 

12 ‘‘(i) the building is acquired by pur13 chase (as defined in section 179(d)(2)), 

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

15 years between the date of its acquisition by 

16 the taxpayer and the date the building was 

17 last placed in service, 

18 ‘‘(iii) the building was not previously 

19 placed in service by the taxpayer or by any 

20 person who was a related person with re21 spect to the taxpayer as of the time pre22 viously placed in service, and 

23 ‘‘(iv) except as provided in subsection 

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1 section (a) by reason of subsection (e) with 

2 respect to the building. 

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

4 subparagraph (A), the adjusted basis of any 

5 building shall not include so much of the basis 

6 of such building as is determined by reference 

7 to the basis of other property held at any time 

8 by the person acquiring the building. 

9 ‘‘(D) SPECIAL RULES.— 

10 ‘‘(i) SPECIAL RULES FOR CERTAIN

11 TRANSFERS.—For purposes of determining 

12 under subparagraph (B)(ii) when a build13 ing was last placed in service, there shall 

14 not be taken into account any placement in 

15 service— 

16 ‘‘(I) in connection with the acqui17 sition of the building in a transaction 

18 in which the basis of the building in 

19 the hands of the person acquiring it is 

20 determined in whole or in part by ref21 erence to the adjusted basis of such 

22 building in the hands of the person 

23 from whom acquired, 

24 ‘‘(II) by a person whose basis in 

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1 tion 1014(a) (relating to property ac2 quired from a decedent), 

3 ‘‘(III) by any governmental unit 

4 or qualified nonprofit organization if 

5 the requirements of subparagraph 

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

7 placement in service by such unit or 

8 organization and all the income from 

9 such property is exempt from Federal 

10 income taxation, 

11 ‘‘(IV) by any person who ac12 quired such building by foreclosure 

13 (or by instrument in lieu of fore14 closure) of any purchase-money secu15 rity interest held by such person if the 

16 requirements of subparagraph (B)(ii) 

17 are met with respect to the placement 

18 in service by such person and such 

19 building is resold within 12 months 

20 after the date such building is placed 

21 in service by such person after such 

22 foreclosure, or 

23 ‘‘(V) of a single-family residence 

24 by any individual who owned and used 


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1 such residence for no other purpose 

2 than as his principal residence. 

3 ‘‘(ii) RELATED PERSON.—For pur4 poses of subparagraph (B)(iii), a person 

5 (hereinafter in this subclause referred to as 

6 the ‘related person’) is related to any per7 son if the related person bears a relation8 ship to such person specified in section 

9 267(b) or 707(b)(1), or the related person 

10 and such person are engaged in trades or 

11 businesses under common control (within 

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

13 section 52). 

14 ‘‘(3) SPECIAL RULES RELATING TO DETER15 MINATION OF ADJUSTED BASIS.—For purposes of 

16 this subsection— 

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

18 subparagraph (B), the adjusted basis of any 

19 building shall be determined without regard to 

20 the adjusted basis of any property which is not 

21 residential rental property. 

22 ‘‘(B) BASIS OF PROPERTY IN COMMON

23 AREAS, ETC., INCLUDED.— 

24 ‘‘(i) IN GENERAL.—Except as pro25 vided in clause (ii), the adjusted basis of 


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1 any building shall be determined by taking 

2 into account the adjusted basis of property 

3 (of a character subject to the allowance for 

4 depreciation) used in common areas or 

5 provided as comparable amenities to all 

6 residential rental units in such building. 

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

8 any building for which the low-income 

9 housing tax credit is allowable under sec10 tion 42, the adjusted basis of the building 

11 under this section shall be determined 

12 without regard to property used in com13 mon areas or provided as comparable 

14 amenities to all residential rental units in 

15 such building. 

16 ‘‘(C) NO REDUCTION FOR DEPRECIA17 TION.—The adjusted basis of any building shall 

18 be determined without regard to paragraphs (2) 

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

20 ‘‘(4) FEDERAL GRANTS NOT TAKEN INTO AC21 COUNT IN DETERMINING ELIGIBLE BASIS.—The eli22 gible basis of a building shall not include any costs 

23 financed with the proceeds of a Federally funded 

24 grant. 


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1 ‘‘(5) CREDIT ALLOWABLE FOR CERTAIN BUILD2 INGS ACQUIRED DURING 10-YEAR PERIOD.—On ap3 plication by the taxpayer, the Secretary may waive 

4 paragraph (2)(B)(ii) with respect to any building ac5 quired from an insured depository institution in de6 fault (as defined in section 3 of the Federal Deposit 

7 Insurance Act) or from a receiver or conservator of 

8 such an institution. 

9 ‘‘(6) ACQUISITION OF BUILDING BEFORE END

10 OF PRIOR CREDIT PERIOD.— 

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

12 prescribed by the Secretary, in the case of a 

13 building described in subparagraph (B) (or in14 terest therein) which is acquired by the tax15 payer— 

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

17 but 

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

19 subsection (a) to the taxpayer for any pe20 riod after such acquisition shall be equal to 

21 the amount of credit which would have 

22 been allowable under subsection (a) for 

23 such period to the prior owner referred to 

24 in subparagraph (B) had such owner not 

25 disposed of the building. 


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1 ‘‘(B) DESCRIPTION OF BUILDING.—A 

2 building is described in this subparagraph if— 

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

4 subsection (a) to any prior owner of such 

5 building, and 

6 ‘‘(ii) the taxpayer acquired such build7 ing before the end of the credit period for 

8 such building with respect to such prior 

9 owner (determined without regard to any 

10 disposition by such prior owner). 

11 ‘‘(e) REHABILITATION EXPENDITURES TREATED AS

12 SEPARATE NEW BUILDING.— 

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

14 paid or incurred by the taxpayer with respect to any 

15 building shall be treated for purposes of this section 

16 as a separate new building. 

17 ‘‘(2) REHABILITATION EXPENDITURES.—For 

18 purposes of paragraph (1)— 

19 ‘‘(A) IN GENERAL.—The term ‘rehabilita20 tion expenditures’ means amounts chargeable to 

21 capital account and incurred for property (or 

22 additions or improvements to property) of a 

23 character subject to the allowance for deprecia24 tion in connection with the rehabilitation of a 

25 building. 


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1 ‘‘(B) COST OF ACQUISITION, ETC., NOT IN2 CLUDED.—Such term does not include the cost 

3 of acquiring any building (or interest therein) 

4 or any amount not permitted to be taken into 

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

6 ‘‘(C) CERTAIN RELOCATION COSTS.—In 

7 the case of a rehabilitation of a building to 

8 which section 280B does not apply, costs relat9 ing to the relocation of occupants, including— 

10 ‘‘(i) amounts paid to occupants, 

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

12 services relating to such relocation, and 

13 ‘‘(iii) amounts paid for temporary 

14 housing for occupants, 

15 shall be treated as chargeable to capital account 

16 and taken into account as rehabilitation ex17 penditures. 

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

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

20 apply to rehabilitation expenditures with respect 

21 to any building only if— 

22 ‘‘(i) the expenditures are allocable to 

23 1 or more middle-income units or substan24 tially benefit such units, and 


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1 ‘‘(ii) the amount of such expenditures 

2 during any 24-month period meets the re3 quirements of whichever of the following 

4 subclauses requires the greater amount of 

5 such expenditures: 

6 ‘‘(I) The requirement of this sub7 clause is met if such amount is not 

8 less than 20 percent of the adjusted 

9 basis of the building (determined as of 

10 the 1st day of such period and with11 out regard to paragraphs (2) and (3) 

12 of section 1016(a)). 

13 ‘‘(II) The requirement of this 

14 subclause is met if the qualified basis 

15 attributable to such amount, when di16 vided by the number of middle-income 

17 units in the building, is equal to or 

18 greater than the dollar amount in ef19 fect under section 42(e)(3)(A)(ii)(II) 

20 for the calendar year in which such 

21 expenditures are treated as placed in 

22 service under paragraph (4). 

23 ‘‘(B) DATE OF DETERMINATION.—The de24 termination under subparagraph (A) shall be 

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


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1 the credit period with respect to such expendi2 tures. 

3 ‘‘(4) SPECIAL RULES.—For purposes of apply4 ing this section with respect to expenditures which 

5 are treated as a separate building by reason of this 

6 subsection— 

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

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

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

10 ‘‘(B) the applicable fraction under sub11 section (c)(1) shall be the applicable fraction for 

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

13 with respect to which the expenditures were in14 curred. 

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

16 from being allowed by reason of this subsection. 

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

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

19 taken into account under this subsection or sub20 section (d)(2)(A)(i) but not under both such sub21 sections. 

22 ‘‘(6) REGULATIONS TO APPLY SUBSECTION

23 WITH RESPECT TO GROUP OF UNITS IN BUILDING.— 

24 The Secretary may prescribe regulations, consistent 

25 with the purposes of this subsection, treating a 


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1 group of units with respect to which rehabilitation 

2 expenditures are incurred as a separate new build3 ing. 

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

5 CREDIT PERIOD.— 

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

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

8 respect to any building, the period of 15 taxable 

9 years beginning with— 

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

11 is placed in service, or 

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

13 succeeding taxable year, 

14 but only if the building is a qualified middle-income 

15 building as of the close of the 1st year of such pe16 riod. The election under subparagraph (B), once 

17 made, shall be irrevocable. 

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

19 PERIOD.— 

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

21 under subsection (a) with respect to any build22 ing for the 1st taxable year of the credit period 

23 shall be determined by substituting for the ap24 plicable fraction under subsection (c)(1) the 

25 fraction— 


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

2 sum of the applicable fractions determined 

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

4 each full month of such year during which 

5 such building was in service, and 

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

7 ‘‘(B) DISALLOWED 1ST-YEAR CREDIT AL8 LOWED IN 16TH YEAR.—Any reduction by rea9 son of subparagraph (A) in the credit allowable 

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

11 1st taxable year of the credit period shall be al12 lowable under subsection (a) for the 1st taxable 

13 year following the credit period. 

14 ‘‘(3) DETERMINATION OF APPLICABLE PER15 CENTAGE WITH RESPECT TO INCREASES IN QUALI16 FIED BASIS AFTER 1ST YEAR OF CREDIT PERIOD.— 

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

18 building which was a qualified middle-income 

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

20 credit period, if— 

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

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

23 such period) the qualified basis of such 

24 building, exceeds 


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1 ‘‘(ii) the qualified basis of such build2 ing as of the close of the 1st year of the 

3 credit period, 

4 the applicable percentage which shall apply 

5 under subsection (a) for the taxable year to 

such excess shall be the percentage equal to 2 6 ⁄3

7 of the applicable percentage which (after the 

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

9 paragraph apply to such basis. 

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

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

12 shall apply to any increase in qualified basis to 

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

14 of such increase. 

15 ‘‘(4) DISPOSITIONS OF PROPERTY.—If a build16 ing (or an interest therein) is disposed of during any 

17 year for which credit is allowable under subsection 

18 (a), such credit shall be allocated between the par19 ties on the basis of the number of days during such 

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

21 ‘‘(5) CREDIT PERIOD FOR EXISTING BUILDINGS

22 NOT TO BEGIN BEFORE REHABILITATION CREDIT

23 ALLOWED.— 

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

25 an existing building shall not begin before the 


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•S 680 IS

1 1st taxable year of the credit period for reha2 bilitation expenditures with respect to the build3 ing. 

4 ‘‘(B) ACQUISITION CREDIT ALLOWED FOR

5 CERTAIN BUILDINGS NOT ALLOWED A REHA6 BILITATION CREDIT.— 

7 ‘‘(i) IN GENERAL.—In the case of a 

8 building described in clause (ii)— 

9 ‘‘(I) subsection (d)(2)(B)(iv) 

10 shall not apply, and 

11 ‘‘(II) the credit period for such 

12 building shall not begin before the 

13 taxable year which would be the 1st 

14 taxable year of the credit period for 

15 rehabilitation expenditures with re16 spect to the building under the modi17 fications described in clause (ii)(II). 

18 ‘‘(ii) BUILDING DESCRIBED.—A build19 ing is described in this clause if— 

20 ‘‘(I) a waiver is granted under 

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

22 acquisition of the building, and 

23 ‘‘(II) a credit would be allowed 

24 for rehabilitation expenditures with 

25 respect to such building if subsection 


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

2 the dollar amount in effect under sub3 section (e)(3)(A)(ii)(II) were two4 thirds of such amount. 

5 ‘‘(g) QUALIFIED MIDDLE-INCOME HOUSING

6 PROJECT.—For purposes of this section— 

7 ‘‘(1) IN GENERAL.—The term ‘qualified middle8 income housing project’ means any project for resi9 dential rental property if 60 percent or more of the 

10 residential units in such project are both rent-re11 stricted and occupied by individuals whose income is 

12 100 percent or less of area median gross income. 

13 For purposes of the preceding sentence, residential 

14 units in a building which is not a qualified middle15 income building by reason of subsection (c)(2)(B) 

16 shall not be taken into account. 

17 ‘‘(2) RENT-RESTRICTED UNITS.— 

18 ‘‘(A) IN GENERAL.—For purposes of para19 graph (1), a residential unit is rent-restricted if 

20 the gross rent with respect to such unit does 

21 not exceed 30 percent of the imputed income 

22 limitation applicable to such unit. For purposes 

23 of the preceding sentence, the amount of the in24 come limitation under paragraph (1) applicable 

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1 tation applicable for the earliest period the 

2 building (which contains the unit) was included 

3 in the determination of whether the project is 

4 a qualified middle-income housing project. 

5 ‘‘(B) GROSS RENT.—For purposes of sub6 paragraph (A), gross rent— 

7 ‘‘(i) includes any utility allowance de8 termined by the Secretary after taking into 

9 account such determinations under section 

10 8 of the United States Housing Act of 

11 1937, 

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

13 supportive service which is paid to the 

14 owner of the unit (on the basis of the mid15 dle-income status of the tenant of the unit) 

16 by any governmental program of assistance 

17 (or by an organization described in section 

18 501(c)(3) and exempt from tax under sec19 tion 501(a)) if such program (or organiza20 tion) provides assistance for rent and the 

21 amount of assistance provided for rent is 

22 not separable from the amount of assist23 ance provided for supportive services, and 

24 ‘‘(iii) does not include any rental pay25 ment to the owner of the unit to the extent 


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1 such owner pays an equivalent amount to 

2 the Farmers’ Home Administration under 

3 section 515 of the Housing Act of 1949. 

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

5 service’ means any service provided under a 

6 planned program of services designed to enable 

7 residents of a residential rental property to re8 main independent and avoid placement in a 

9 hospital, nursing home, or intermediate care fa10 cility for the mentally or physically handi11 capped. 

12 ‘‘(C) IMPUTED INCOME LIMITATION APPLI13 CABLE TO UNIT.—For purposes of this para14 graph, the imputed income limitation applicable 

15 to a unit is the income limitation which would 

16 apply under paragraph (1) to individuals occu17 pying the unit if the number of individuals oc18 cupying the unit were as follows: 

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

20 not have a separate bedroom, 1 individual. 

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

22 1 or more separate bedrooms, 1.5 individ23 uals for each separate bedroom. 

24 In the case of a project with respect to which 

25 a credit is allowable by reason of this section 


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1 and for which financing is provided by a bond 

2 described in section 142(a)(7), the imputed in3 come limitation shall apply in lieu of the other4 wise applicable income limitation for purposes 

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

6 ‘‘(D) TREATMENT OF UNITS OCCUPIED BY

7 INDIVIDUALS WHOSE INCOMES RISE ABOVE

8 LIMIT.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), notwithstanding an in11 crease in the income of the occupants of a 

12 middle-income unit above the income limi13 tation applicable under paragraph (1), 

14 such unit shall continue to be treated as a 

15 middle-income unit if the income of such 

16 occupants initially met such income limita17 tion and such unit continues to be rent-re18 stricted. 

19 ‘‘(ii) NEXT AVAILABLE UNIT MUST BE

20 RENTED TO MIDDLE-INCOME TENANT IF

21 INCOME RISES ABOVE 140 PERCENT OF IN22 COME LIMIT.—If the income of the occu23 pants of the unit increases above 140 per24 cent of the income limitation applicable 

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


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1 to apply to such unit if any residential 

2 rental unit in the building (of a size com3 parable to, or smaller than, such unit) is 

4 occupied by a new resident whose income 

5 exceeds such income limitation. 

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

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

8 provided in this paragraph, a building shall be 

9 treated as a qualified middle-income building 

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

11 part) meets the requirements of paragraph (1) 

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

13 credit period for such building. 

14 ‘‘(B) BUILDINGS WHICH RELY ON LATER

15 BUILDINGS FOR QUALIFICATION.— 

16 ‘‘(i) IN GENERAL.—In determining 

17 whether a building (hereinafter in this sub18 paragraph referred to as the ‘prior build19 ing’) is a qualified middle-income building, 

20 the taxpayer may take into account 1 or 

21 more additional buildings placed in service 

22 during the 12-month period described in 

23 subparagraph (A) with respect to the prior 

24 building only if the taxpayer elects to apply 


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1 clause (ii) with respect to each additional 

2 building taken into account. 

3 ‘‘(ii) TREATMENT OF ELECTED

4 BUILDINGS.—In the case of a building 

5 which the taxpayer elects to take into ac6 count under clause (i), the period under 

7 subparagraph (A) for such building shall 

8 end at the close of the 12-month period ap9 plicable to the prior building. 

10 ‘‘(iii) DATE PRIOR BUILDING IS

11 TREATED AS PLACED IN SERVICE.—For 

12 purposes of determining the credit period 

13 for the prior building, the prior building 

14 shall be treated for purposes of this section 

15 as placed in service on the most recent 

16 date any additional building elected by the 

17 taxpayer (with respect to such prior build18 ing) was placed in service. 

19 ‘‘(C) SPECIAL RULE.—A building— 

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

21 in service as part of a project, and 

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

23 placed in service during the 12-month pe24 riod described in subparagraph (A) with 


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1 respect to a prior building which becomes 

2 a qualified middle-income building, 

3 shall in no event be treated as a qualified mid4 dle-income building unless the project is a 

5 qualified middle-income housing project (with6 out regard to such building) on the date such 

7 building is placed in service. 

8 ‘‘(D) PROJECTS WITH MORE THAN 1

9 BUILDING MUST BE IDENTIFIED.—For pur10 poses of this section, a project shall be treated 

11 as consisting of only 1 building unless, before 

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

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

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

15 project is identified in such form and manner 

16 as the Secretary may provide. 

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

18 Paragraphs (2) (other than subparagraph (A) there19 of), (3), and (7) of section 142(d), and section 

20 6652(j), shall apply for purposes of determining 

21 whether any project is a qualified middle-income 

22 housing project and whether any unit is a middle-in23 come unit; except that, in applying such provisions 

24 for such purposes— 


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

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

3 of this subsection, and 

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

5 means the limitation under paragraph (1) of 

6 this subsection. 

7 ‘‘(5) ELECTION TO TREAT BUILDING AFTER

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

9 purposes of this section, the taxpayer may elect to 

10 treat any building as not part of a qualified middle11 income housing project for any period beginning 

12 after the credit period for such building. 

13 ‘‘(6) SPECIAL RULE WHERE DE MINIMIS EQ14 UITY CONTRIBUTION.—Property shall not be treated 

15 as failing to be residential rental property for pur16 poses of this section merely because the occupant of 

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

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

19 toward the purchase by such occupant of a residen20 tial unit in such project if— 

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

22 the occupant on the cessation of his occupancy 

23 of a unit in the project, and 

24 ‘‘(B) the purchase of the unit is not per25 mitted until after the close of the credit period 


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1 with respect to the building in which the unit 

2 is located. 

3 Any amount paid to the lessor as described in the 

4 preceding sentence shall be included in gross rent 

5 under paragraph (2) for purposes of determining 

6 whether the unit is rent-restricted. 

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

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

9 treated as a project for purposes of this section shall 

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

11 the buildings are rent-restricted (within the meaning 

12 of paragraph (2)) residential rental units. 

13 ‘‘(8) WAIVER OF CERTAIN RECERTIFI14 CATIONS.—On application by the taxpayer, the Sec15 retary may waive any annual recertification of ten16 ant income for purposes of this subsection, if the en17 tire building is occupied by middle-income tenants. 

18 ‘‘(9) CLARIFICATION OF GENERAL PUBLIC USE

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

20 general public use requirement solely because of oc21 cupancy restrictions or preferences that favor ten22 ants— 

23 ‘‘(A) with special needs, or 

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

25 under a Federal program or State program or 


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1 policy that supports housing for such a speci2 fied group. 

3 ‘‘(h) LIMITATION ON AGGREGATE CREDIT ALLOW4 ABLE WITH RESPECT TO PROJECTS LOCATED IN A

5 STATE.— 

6 ‘‘(1) CREDIT MAY NOT EXCEED CREDIT

7 AMOUNT ALLOCATED TO BUILDING.— 

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

9 credit determined under this section for any 

10 taxable year with respect to any building shall 

11 not exceed the housing credit dollar amount al12 located to such building under this subsection. 

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

14 Except in the case of an allocation which meets 

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

16 (E), or (F), an allocation shall be taken into ac17 count under subparagraph (A) only if it is 

18 made not later than the close of the calendar 

19 year in which the building is placed in service. 

20 ‘‘(C) EXCEPTION WHERE BINDING COM21 MITMENT.—An allocation meets the require22 ments of this subparagraph if there is a binding 

23 commitment (not later than the close of the cal24 endar year in which the building is placed in 

25 service) by the housing credit agency to allocate 


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1 a specified housing credit dollar amount to such 

2 building beginning in a specified later taxable 

3 year. 

4 ‘‘(D) EXCEPTION WHERE INCREASE IN

5 QUALIFIED BASIS.— 

6 ‘‘(i) IN GENERAL.—An allocation 

7 meets the requirements of this subpara8 graph if such allocation is made not later 

9 than the close of the calendar year in 

10 which ends the taxable year to which it will 

11 1st apply but only to the extent the 

12 amount of such allocation does not exceed 

13 the limitation under clause (ii). 

14 ‘‘(ii) LIMITATION.—The limitation 

15 under this clause is the amount of credit 

16 allowable under this section (without re17 gard to this subsection) for a taxable year 

18 with respect to an increase in the qualified 

19 basis of the building equal to the excess 

20 of— 

21 ‘‘(I) the qualified basis of such 

22 building as of the close of the 1st tax23 able year to which such allocation will 

24 apply, over 


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1 ‘‘(II) the qualified basis of such 

2 building as of the close of the 1st tax3 able year to which the most recent 

4 prior housing credit allocation with re5 spect to such building applied. 

6 ‘‘(iii) HOUSING CREDIT DOLLAR

7 AMOUNT REDUCED BY FULL ALLOCA8 TION.—Notwithstanding clause (i), the full 

9 amount of the allocation shall be taken 

10 into account under paragraph (2). 

11 ‘‘(E) EXCEPTION WHERE 10 PERCENT OF

12 COST INCURRED.— 

13 ‘‘(i) IN GENERAL.—An allocation 

14 meets the requirements of this subpara15 graph if such allocation is made with re16 spect to a qualified building which is 

17 placed in service not later than the close of 

18 the second calendar year following the cal19 endar year in which the allocation is made. 

20 ‘‘(ii) QUALIFIED BUILDING.—For pur21 poses of clause (i), the term ‘qualified 

22 building’ means any building which is part 

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

24 project (as of the date which is 1 year 

25 after the date that the allocation was 


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1 made) is more than 10 percent of the tax2 payer’s reasonably expected basis in such 

3 project (as of the close of the second cal4 endar year referred to in clause (i)). Such 

5 term does not include any existing building 

6 unless a credit is allowable under sub7 section (e) for rehabilitation expenditures 

8 paid or incurred by the taxpayer with re9 spect to such building for a taxable year 

10 ending during the second calendar year re11 ferred to in clause (i) or the prior taxable 

12 year. 

13 ‘‘(F) ALLOCATION OF CREDIT ON A

14 PROJECT BASIS.— 

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

16 project which includes (or will include) 

17 more than 1 building, an allocation meets 

18 the requirements of this subparagraph if— 

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

20 project for a calendar year during the 

21 project period, 

22 ‘‘(II) the allocation only applies 

23 to buildings placed in service during 

24 or after the calendar year for which 

25 the allocation is made, and 


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1 ‘‘(III) the portion of such alloca2 tion which is allocated to any building 

3 in such project is specified not later 

4 than the close of the calendar year in 

5 which the building is placed in service. 

6 ‘‘(ii) PROJECT PERIOD.—For pur7 poses of clause (i), the term ‘project pe8 riod’ means the period— 

9 ‘‘(I) beginning with the 1st cal10 endar year for which an allocation 

11 may be made for the 1st building 

12 placed in service as part of such 

13 project, and 

14 ‘‘(II) ending with the calendar 

15 year the last building is placed in 

16 service as part of such project. 

17 ‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY

18 TO ALL TAXABLE YEARS ENDING DURING OR AFTER

19 CREDIT ALLOCATION YEAR.—Any housing credit dol20 lar amount allocated to any building for any cal21 endar year— 

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

23 taxable years in the credit period ending during 

24 or after such calendar year, and 


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1 ‘‘(B) shall reduce the aggregate housing 

2 credit dollar amount of the allocating agency 

3 only for such calendar year. 

4 ‘‘(3) HOUSING CREDIT DOLLAR AMOUNT FOR

5 AGENCIES.— 

6 ‘‘(A) IN GENERAL.—The aggregate hous7 ing credit dollar amount which a housing credit 

8 agency may allocate for any calendar year is 

9 the portion of the State housing credit ceiling 

10 allocated under this paragraph for such cal11 endar year to such agency. 

12 ‘‘(B) STATE CEILING INITIALLY ALLO13 CATED TO STATE HOUSING CREDIT AGEN14 CIES.—Except as provided in subparagraph 

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

16 calendar year shall be allocated to the housing 

17 credit agency of such State. If there is more 

18 than 1 housing credit agency of a State, all 

19 such agencies shall be treated as a single agen20 cy. 

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

22 The State housing credit ceiling applicable to 

23 any State for any calendar year shall be an 

24 amount equal to the sum of— 

25 ‘‘(i) the greater of— 


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1 ‘‘(I) $1.00 multiplied by the 

2 State population, or 

3 ‘‘(II) $1,140,000, plus 

4 ‘‘(ii) the amount of State housing 

5 credit ceiling returned in the calendar year. 

6 For purposes of clause (ii), the amount of State 

7 housing credit ceiling returned in the calendar 

8 year equals the housing credit dollar amount 

9 previously allocated within the State to any 

10 project which fails to meet the 10 percent test 

11 under paragraph (1)(E)(ii) on a date after the 

12 close of the calendar year in which the alloca13 tion was made or which does not become a 

14 qualified middle-income housing project within 

15 the period required by this section or the terms 

16 of the allocation or to any project with respect 

17 to which an allocation is cancelled by mutual 

18 consent of the housing credit agency and the al19 location recipient. 

20 ‘‘(D) STATE MAY PROVIDE FOR DIF21 FERENT ALLOCATION.—Rules similar to the 

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

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

24 paragraph. 


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

2 paragraph, population shall be determined in 

3 accordance with section 146(j). 

4 ‘‘(F) COST-OF-LIVING ADJUSTMENT.— 

5 ‘‘(i) IN GENERAL.—In the case of a 

6 calendar year after 2024, the $1,140,000 

7 and $1.00 amounts in subparagraph (C) 

8 shall each be increased by an amount equal 

9 to— 

10 ‘‘(I) such dollar amount, multi11 plied by 

12 ‘‘(II) the cost-of-living adjust13 ment determined under section 1(f)(3) 

14 for such calendar year by substituting 

15 ‘calendar year 2023’ for ‘calendar 

16 year 2016’ in subparagraph (A)(ii) 

17 thereof. 

18 ‘‘(ii) ROUNDING.— 

19 ‘‘(I) In the case of the 

20 $1,140,000 amount, any increase 

21 under clause (i) which is not a mul22 tiple of $5,000 shall be rounded to the 

23 next lowest multiple of $5,000. 

24 ‘‘(II) In the case of the $1.00 

25 amount, any increase under clause (i) 


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1 which is not a multiple of 5 cents 

2 shall be rounded to the next lowest 

3 multiple of 5 cents. 

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

5 FOR CERTAIN PROJECTS INVOLVING QUALIFIED

6 NONPROFIT ORGANIZATIONS.— 

7 ‘‘(A) IN GENERAL.—Not more than 90 

8 percent of the State housing credit ceiling (de9 termined without regard to paragraph (7)) for 

10 any State for any calendar year shall be allo11 cated to projects other than qualified middle-in12 come housing projects described in subpara13 graph (B). 

14 ‘‘(B) PROJECTS INVOLVING QUALIFIED

15 NONPROFIT ORGANIZATIONS.—For purposes of 

16 subparagraph (A), a qualified middle-income 

17 housing project is described in this subpara18 graph if a qualified nonprofit organization is to 

19 own an interest in the project (directly or 

20 through a partnership) and materially partici21 pate (within the meaning of section 469(h)) in 

22 the development and operation of the project 

23 throughout the credit period. 

24 ‘‘(C) QUALIFIED NONPROFIT ORGANIZA25 TION.—For purposes of this paragraph, the 


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1 term ‘qualified nonprofit organization’ means 

2 any organization if— 

3 ‘‘(i) such organization is described in 

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

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

6 ‘‘(ii) such organization is determined 

7 by the State housing credit agency not to 

8 be affiliated with or controlled by a for9 profit organization; and 

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

11 such organization includes the fostering of 

12 middle-income housing. 

13 ‘‘(D) TREATMENT OF CERTAIN SUBSIDI14 ARIES.— 

15 ‘‘(i) IN GENERAL.—For purposes of 

16 this paragraph, a qualified nonprofit orga17 nization shall be treated as satisfying the 

18 ownership and material participation test 

19 of subparagraph (B) if any qualified cor20 poration in which such organization holds 

21 stock satisfies such test. 

22 ‘‘(ii) QUALIFIED CORPORATION.—For 

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

24 corporation’ means any corporation if 100 

25 percent of the stock of such corporation is 


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•S 680 IS

1 held by 1 or more qualified nonprofit orga2 nizations at all times during the period 

3 such corporation is in existence. 

4 ‘‘(E) STATE MAY NOT OVERRIDE SET5 ASIDE.—Nothing in subparagraph (E) of para6 graph (3) shall be construed to permit a State 

7 not to comply with subparagraph (A) of this 

8 paragraph. 

9 ‘‘(5) BUILDINGS ELIGIBLE FOR CREDIT ONLY

10 IF MINIMUM LONG-TERM COMMITMENT TO MIDDLE11 INCOME HOUSING.— 

12 ‘‘(A) IN GENERAL.—No credit shall be al13 lowed by reason of this section with respect to 

14 any building for the taxable year unless an ex15 tended middle-income housing commitment is in 

16 effect as of the end of such taxable year. 

17 ‘‘(B) EXTENDED MIDDLE-INCOME HOUS18 ING COMMITMENT.—For purposes of this para19 graph, the term ‘extended middle-income hous20 ing commitment’ means any agreement between 

21 the taxpayer and the housing credit agency— 

22 ‘‘(i) which requires that the applicable 

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

24 for the building for each taxable year in 

25 the extended use period will not be less 


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•S 680 IS

1 than the applicable fraction specified in 

2 such agreement and which prohibits the 

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

4 of subparagraph (E)(ii), 

5 ‘‘(ii) which allows individuals who 

6 meet the income limitation applicable to 

7 the building under subsection (g) (whether 

8 prospective, present, or former occupants 

9 of the building) the right to enforce in any 

10 State court the requirement and prohibi11 tions of clause (i), 

12 ‘‘(iii) which prohibits the disposition 

13 to any person of any portion of the build14 ing to which such agreement applies unless 

15 all of the building to which such agreement 

16 applies is disposed of to such person, 

17 ‘‘(iv) which prohibits the refusal to 

18 lease to a holder of a voucher or certificate 

19 of eligibility under section 8 of the United 

20 States Housing Act of 1937 because of the 

21 status of the prospective tenant as such a 

22 holder, 

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

24 of the taxpayer, and 


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1 ‘‘(vi) which, with respect to the prop2 erty, is recorded pursuant to State law as 

3 a restrictive covenant. 

4 ‘‘(C) ALLOCATION OF CREDIT MAY NOT

5 EXCEED AMOUNT NECESSARY TO SUPPORT

6 COMMITMENT.—The housing credit dollar 

7 amount allocated to any building may not ex8 ceed the amount necessary to support the appli9 cable fraction specified in the extended middle10 income housing commitment for such building, 

11 including any increase in such fraction pursu12 ant to the application of subsection (f)(3) if 

13 such increase is reflected in an amended mid14 dle-income housing commitment. 

15 ‘‘(D) EXTENDED USE PERIOD.—For pur16 poses of this paragraph, the term ‘extended use 

17 period’ means the period— 

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

19 credit period on which such building is 

20 part of a qualified middle-income housing 

21 project, and 

22 ‘‘(ii) ending on the later of— 

23 ‘‘(I) the date specified by such 

24 agency in such agreement, or 


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•S 680 IS

1 ‘‘(II) the date which is 15 years 

2 after the close of the credit period. 

3 ‘‘(E) EXCEPTIONS IF FORECLOSURE OR IF

4 NO BUYER WILLING TO MAINTAIN MIDDLE-IN5 COME STATUS.— 

6 ‘‘(i) IN GENERAL.—The extended use 

7 period for any building shall terminate on 

8 the date the building is acquired by fore9 closure (or instrument in lieu of fore10 closure) unless the Secretary determines 

11 that such acquisition is part of an arrange12 ment with the taxpayer a purpose of which 

13 is to terminate such period. 

14 ‘‘(ii) EVICTION, ETC., OF EXISTING

15 MIDDLE-INCOME TENANTS NOT PER16 MITTED.—The termination of an extended 

17 use period under clause (i) shall not be 

18 construed to permit before the close of the 

19 3-year period following such termination— 

20 ‘‘(I) the eviction or the termi21 nation of tenancy (other than for good 

22 cause) of an existing tenant of any 

23 middle-income unit, or 


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•S 680 IS

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 middle-income housing agree7 ment was not in effect as of the beginning of 

8 such year, such determination shall not apply to 

9 any period before such year and subparagraph 

10 (A) shall be applied without regard to such de11 termination if the failure is corrected within 1 

12 year from the date of the determination. 

13 ‘‘(G) PROJECTS WHICH CONSIST OF MORE

14 THAN 1 BUILDING.—The application of this 

15 paragraph to projects which consist of more 

16 than 1 building shall be made under regulations 

17 prescribed by the Secretary. 

18 ‘‘(6) SPECIAL RULES.— 

19 ‘‘(A) BUILDING MUST BE LOCATED WITH20 IN JURISDICTION OF CREDIT AGENCY.—A hous21 ing credit agency may allocate its aggregate 

22 housing credit dollar amount only to buildings 

23 located in the jurisdiction of the governmental 

24 unit of which such agency is a part. 


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•S 680 IS

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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•S 680 IS

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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•S 680 IS

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 5 percent of the 

13 amount determined under paragraph (3)(C)(i). 

14 ‘‘(B) USE OF INCREASED AMOUNT.—The 

15 amount of the increase under subparagraph (A) 

16 for any calendar year may only be allocated to 

17 buildings located in a rural area (as defined in 

18 section 42(d)(5)(B)(iii)(IV)). 

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

20 this subsection— 

21 ‘‘(A) HOUSING CREDIT AGENCY.—The 

22 term ‘housing credit agency’ means any agency 

23 authorized to carry out this subsection. 


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

2 The term ‘State’ includes a possession of the 

3 United States. 

4 ‘‘(9) CREDIT FOR BUILDINGS FINANCED BY

5 TAX-EXEMPT BONDS SUBJECT TO VOLUME CAP NOT

6 TAKEN INTO ACCOUNT.—Rules similar to the rules 

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

8 section 42 shall apply for purposes of this sub9 section. 

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

12 ‘‘(1) MIDDLE-INCOME UNIT.— 

13 ‘‘(A) IN GENERAL.—The term ‘middle-in14 come 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 

24 middle-income unit if such unit is a low-inVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00193 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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•S 680 IS

1 come 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 middle-income 

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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•S 680 IS

1 units, no unit in such building shall be treated 

2 as a middle-income 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 middle-income 

19 unit. 

20 ‘‘(ii) EXCEPTIONS.—Clause (i) shall 

21 not apply to a unit occupied by an indi22 vidual who— 

23 ‘‘(I) is married, if such individ24 ual’s spouse also occupies the unit, 


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•S 680 IS

1 ‘‘(II) is a person with disabilities 

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

3 the United States Housing Act of 

4 1937), 

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

6 section 101(2) of title 38, United 

7 States Code), 

8 ‘‘(IV) has one or more qualifying 

9 children (as defined in section 

10 152(c)), if such children also occupy 

11 the unit, the individual is not a de12 pendent (as defined in section 152, 

13 determined without regard to sub14 sections (b)(1), (b)(2), and (d)(1)(B) 

15 thereof) of another individual, and 

16 such children are not claimed as de17 pendents (as so defined) of another 

18 individual, or 

19 ‘‘(V) is, or was immediately prior 

20 to attaining the age of majority— 

21 ‘‘(aa) an emancipated minor 

22 or in legal guardianship as deter23 mined by a court of competent 

24 jurisdiction in the individual’s 

25 State of legal residence, 


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•S 680 IS

1 ‘‘(bb) under the care and 

2 placement responsibility of the 

3 State agency responsible for ad4 ministering a plan under part B 

5 or part E of title IV of the Social 

6 Security Act, or 

7 ‘‘(cc) was an unaccompanied 

8 youth (within the meaning of sec9 tion 725(6) of the McKinney10 Vento Homeless Assistance Act 

11 (42 U.S.C. 11434a(6))) or a 

12 homeless child or youth (within 

13 the meaning of section 725(2) of 

14 such Act (42 U.S.C. 

15 11434a(2))). 

16 ‘‘(E) OWNER-OCCUPIED BUILDINGS HAV17 ING 4 OR FEWER UNITS ELIGIBLE FOR CREDIT

18 WHERE DEVELOPMENT PLAN.— 

19 ‘‘(i) IN GENERAL.—Subparagraph (C) 

20 shall not apply to the acquisition or reha21 bilitation of a building pursuant to a devel22 opment plan of action sponsored by a 

23 State or local government or a qualified 

24 nonprofit organization. 


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•S 680 IS

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

2 case of a building to which clause (i) ap3 plies, the applicable fraction shall not ex4 ceed 80 percent of the unit fraction. 

5 ‘‘(iii) CERTAIN UNRENTED UNITS

6 TREATED AS OWNER-OCCUPIED.—In the 

7 case of a building to which clause (i) ap8 plies, any unit which is not rented for 90 

9 days or more shall be treated as occupied 

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

11 day it is not rented. 

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

13 means a building the original use of which begins 

14 with the taxpayer. 

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

16 building’ means any building which is not a new 

17 building. 

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

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

20 credit determined under subsection (a) shall be ap21 portioned between the estate or trust and the bene22 ficiaries on the basis of the income of the estate or 

23 trust allocable to each. 

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

25 PROPERTY.— 


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

2 tax benefit shall fail to be allowable to the tax3 payer with respect to any qualified middle-in4 come building merely by reason of an option 

5 held by the tenants (in cooperative form or oth6 erwise) or resident management corporation of 

7 such building or by a qualified nonprofit organi8 zation or government agency to purchase the 

9 property or all of the partnership interests 

10 (other than interests of the person exercising 

11 such option or a related party thereto (within 

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

13 relating to the property after the close of the 

14 credit period for a price which is not less than 

15 the minimum purchase price determined under 

16 subparagraph (B). 

17 ‘‘(B) MINIMUM PURCHASE PRICE.—For 

18 purposes of subparagraph (A), the minimum 

19 purchase price under this subparagraph is an 

20 amount equal to the principal amount of out21 standing indebtedness secured by the building 

22 (other than indebtedness incurred within the 5- 

23 year period ending on the date of the sale to 

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

25 partnership interest, the minimum purchase 


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•S 680 IS

1 price is an amount equal to such interest’s rat2 able share of the amount determined under the 

3 preceding sentence. 

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

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

6 for residential rental property located in a rural area 

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

8 1949), any income limitation measured by reference 

9 to area median gross income shall be measured by 

10 reference to the greater of area median gross income 

11 or national non-metropolitan median income. 

12 ‘‘(7) DETERMINATION OF WHETHER BUILDING

13 IS FEDERALLY SUBSIDIZED.— 

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

15 provided in this paragraph, for purposes of this 

16 section, a project shall be treated as Federally 

17 subsidized for any taxable year if, at any time 

18 during such taxable year or any prior taxable 

19 year, there is or was outstanding any obligation 

20 the interest on which is exempt from tax under 

21 section 103 the proceeds of which are or were 

22 used (directly or indirectly) with respect to such 

23 project or the operation thereof. 

24 ‘‘(B) SPECIAL RULE FOR SUBSIDIZED CON25 STRUCTION FINANCING.—Subparagraph (A) 


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•S 680 IS

1 shall not apply to any tax-exempt obligation 

2 used to provide construction financing for any 

3 building if— 

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

5 identified the building for which the pro6 ceeds of such obligation would be used, 

7 and 

8 ‘‘(ii) such obligation is redeemed be9 fore such building is placed in service. 

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

11 building for which a credit is allowable under this 

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

13 be reduced by the amount of such credit allowed 

14 under subsection (a). 

15 ‘‘(j) APPLICATION OF AT-RISK RULES.—For pur16 poses of this section— 

17 ‘‘(1) IN GENERAL.—Except as otherwise pro18 vided in this subsection, rules similar to the rules of 

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

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

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

22 qualified basis of any building in the same manner 

23 as such sections apply in determining the credit base 

24 of property. 


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•S 680 IS

1 ‘‘(2) SPECIAL RULES FOR DETERMINING QUALI2 FIED PERSON.—For purposes of paragraph (1)— 

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

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

5 respect to any financing borrowed from a quali6 fied nonprofit organization, the determination 

7 of whether such financing is qualified commer8 cial financing with respect to any qualified mid9 dle-income building shall be made without re10 gard to whether such organization— 

11 ‘‘(i) is actively and regularly engaged 

12 in the business of lending money, or 

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

14 49(a)(1)(D)(iv)(II). 

15 ‘‘(B) FINANCING SECURED BY PROP16 ERTY.—The requirements of this subparagraph 

17 are met with respect to any financing if such fi18 nancing is secured by the qualified middle-in19 come building, except that this subparagraph 

20 shall not apply in the case of a federally as21 sisted building described in subsection (d)(5)(B) 

22 if— 

23 ‘‘(i) a security interest in such build24 ing is not permitted by a Federal agency 


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1 holding or insuring the mortgage secured 

2 by such building, and 

3 ‘‘(ii) the proceeds from the financing 

4 (if any) are applied to acquire or improve 

5 such building. 

6 ‘‘(C) PORTION OF BUILDING ATTRIB7 UTABLE TO FINANCING.—The requirements of 

8 this subparagraph are met with respect to any 

9 financing for any taxable year in the credit pe10 riod if, as of the close of such taxable year, not 

11 more than 60 percent of the eligible basis of the 

12 qualified middle-income building is attributable 

13 to such financing (reduced by the principal and 

14 interest of any governmental financing which is 

15 part of a wrap-around mortgage involving such 

16 financing). 

17 ‘‘(D) REPAYMENT OF PRINCIPAL AND IN18 TEREST.—The requirements of this subpara19 graph are met with respect to any financing if 

20 such financing is fully repaid on or before the 

21 earliest of— 

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

23 matures, 


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

2 the credit period with respect to the quali3 fied middle-income building, or 

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

5 sale of the building to which such financ6 ing relates. 

7 In the case of a qualified nonprofit organization 

8 which is not described in section 

9 49(a)(1)(D)(iv)(II) with respect to a building, 

10 clause (ii) of this subparagraph shall be applied 

11 as if the date described therein were the 90th 

12 day after the earlier of the date the building 

13 ceases to be a qualified middle-income building 

14 or the date which is 15 years after the close of 

15 a credit period with respect thereto. 

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

17 rate of interest on any financing described in para18 graph (2)(A) is less than the rate which is 1 per19 centage point below the applicable Federal rate as of 

20 the time such financing is incurred, then the quali21 fied basis (to which such financing relates) of the 

22 qualified middle-income building shall be the present 

23 value of the amount of such financing, using as the 

24 discount rate such applicable Federal rate. For pur25 poses of the preceding sentence, the rate of interest 


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1 on any financing shall be determined by treating in2 terest to the extent of government subsidies as not 

3 payable. 

4 ‘‘(4) FAILURE TO FULLY REPAY.— 

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

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

7 then the taxpayer’s tax under this chapter for 

8 the taxable year in which such failure occurs 

9 shall be increased by an amount equal to the 

10 applicable portion of the credit under this sec11 tion with respect to such building, increased by 

12 an amount of interest for the period— 

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

14 the filing of the return of tax imposed by 

15 chapter 1 for the 1st taxable year for 

16 which such credit was allowable, and 

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

18 taxable year in which such failure occurs, 

19 determined by using the underpayment rate and 

20 method under section 6621. 

21 ‘‘(B) APPLICABLE PORTION.—For pur22 poses of subparagraph (A), the term ‘applicable 

23 portion’ means the aggregate decrease in the 

24 credits allowed to a taxpayer under section 38 

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1 sulted if the eligible basis of the building were 

2 reduced by the amount of financing which does 

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

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

5 similar to the rules of subparagraphs (A) and 

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

7 of this subsection. 

8 ‘‘(k) CERTIFICATIONS AND OTHER REPORTS TO SEC9 RETARY.— 

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

11 YEAR OF CREDIT PERIOD.—Following the close of 

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

13 to any qualified middle-income building, the tax14 payer shall certify to the Secretary (at such time 

15 and in such form and in such manner as the Sec16 retary prescribes)— 

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

18 in which such building was placed in service, 

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

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

21 of the credit period, 

22 ‘‘(C) the maximum applicable percentage 

23 and qualified basis permitted to be taken into 

24 account by the appropriate housing credit agen25 cy under subsection (h), and 


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1 ‘‘(D) such other information as the Sec2 retary may require. 

3 In the case of a failure to make the certification re4 quired by the preceding sentence on the date pre5 scribed therefor, unless it is shown that such failure 

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

7 no credit shall be allowable by reason of subsection 

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

9 year ending before such certification is made. 

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

11 The Secretary may require taxpayers to submit an 

12 information return (at such time and in such form 

13 and manner as the Secretary prescribes) for each 

14 taxable year setting forth— 

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

16 year of each qualified middle-income building of 

17 the taxpayer, 

18 ‘‘(B) the information described in para19 graph (1)(C) for the taxable year, and 

20 ‘‘(C) such other information as the Sec21 retary may require. 

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

23 failure to submit the return required by the Sec24 retary under the preceding sentence on the date pre25 scribed therefor. 


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1 ‘‘(3) ANNUAL REPORTS FROM HOUSING CREDIT

2 AGENCIES.—Each agency which allocates any hous3 ing credit amount to any building for any calendar 

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

5 in such manner as the Secretary shall prescribe) an 

6 annual report specifying— 

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

8 allocated to each building for such year, 

9 ‘‘(B) sufficient information to identify each 

10 such building and the taxpayer with respect 

11 thereto, and 

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

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

15 failure to submit the report required by the pre16 ceding sentence on the date prescribed therefor. 

17 ‘‘(l) RESPONSIBILITIES OF HOUSING CREDIT AGEN18 CIES.— 

19 ‘‘(1) PLANS FOR ALLOCATION OF CREDIT

20 AMONG PROJECTS.— 

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

22 other provision of this section, the housing cred23 it dollar amount with respect to any building 

24 shall be zero unless— 


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1 ‘‘(i) such amount was allocated pursu2 ant to a qualified allocation plan of the 

3 housing credit agency which is approved by 

4 the governmental unit (in accordance with 

5 rules similar to the rules of section 

6 42(m)(1)) of which such agency is a part, 

7 ‘‘(ii) a comprehensive market study of 

8 the housing needs of middle-income indi9 viduals in the area to be served by the 

10 project is conducted before the credit allo11 cation is made and at the developer’s ex12 pense by a disinterested party who is ap13 proved by such agency, and 

14 ‘‘(iii) a written explanation is available 

15 to the general public for any allocation of 

16 a housing credit dollar amount which is 

17 not made in accordance with established 

18 priorities and selection criteria of the hous19 ing credit agency. 

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

21 purposes of this paragraph, the term ‘qualified 

22 allocation plan’ means any plan— 

23 ‘‘(i) which sets forth selection criteria 

24 to be used to determine housing priorities 


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1 of the housing credit agency which are ap2 propriate to local conditions, 

3 ‘‘(ii) which also gives preference in al4 locating housing credit dollar amounts 

5 among selected projects to— 

6 ‘‘(I) projects obligated to serve 

7 qualified tenants for the longest peri8 ods, 

9 ‘‘(II) projects in areas where 

10 rents are unaffordable to median in11 come households, 

12 ‘‘(III) projects which target hous13 ing to tenants at a range of incomes 

14 between 60 and 100 percent of area 

15 median gross income, and 

16 ‘‘(IV) projects located near tran17 sit hubs, and 

18 ‘‘(iii) which provides a procedure that 

19 the agency (or an agent or other private 

20 contractor of such agency) will follow in 

21 monitoring for noncompliance with the 

22 provisions of this section and in notifying 

23 the Internal Revenue Service of such non24 compliance which such agency becomes 

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1 ance with habitability standards through 

2 regular site visits. 

3 ‘‘(C) CERTAIN SELECTION CRITERIA MUST

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

5 qualified allocation plan must include— 

6 ‘‘(i) project location, 

7 ‘‘(ii) housing needs characteristics, 

8 ‘‘(iii) project characteristics, including 

9 whether the project includes the use of ex10 isting housing as part of a community revi11 talization plan, 

12 ‘‘(iv) sponsor characteristics, 

13 ‘‘(v) tenant populations with special 

14 housing needs, 

15 ‘‘(vi) tenant populations of individuals 

16 with children, 

17 ‘‘(vii) projects intended for eventual 

18 tenant ownership, 

19 ‘‘(viii) the energy efficiency of the 

20 project, and 

21 ‘‘(ix) the historic nature of the 

22 project. 

23 ‘‘(D) CERTAIN SELECTION CRITERIA PRO24 HIBITED.—The selection criteria set forth in a 

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1 quirement of local approval or local contribu2 tions, either as a threshold qualification re3 quirement or as part of a point system to be 

4 considered for allocations of housing credit dol5 lar amount. 

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

7 EXCEED AMOUNT NECESSARY TO ASSURE PROJECT

8 FEASIBILITY.— 

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

10 dollar amount allocated to a project shall not 

11 exceed the amount the housing credit agency 

12 determines is necessary for the financial feasi13 bility of the project and its viability as a quali14 fied middle-income housing project throughout 

15 the credit period. 

16 ‘‘(B) AGENCY EVALUATION.—In making 

17 the determination under subparagraph (A), the 

18 housing credit agency shall consider— 

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

20 the total financing planned for the project, 

21 ‘‘(ii) any proceeds or receipts expected 

22 to be generated by reason of tax benefits, 

23 ‘‘(iii) the percentage of the housing 

24 credit dollar amount used for project costs 

25 other than the cost of intermediaries, and 


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1 ‘‘(iv) the reasonableness of the devel2 opmental and operational costs of the 

3 project. 

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

5 the development of projects in hard-to-develop 

6 areas. Such a determination shall not be con7 strued to be a representation or warranty as to 

8 the feasibility or viability of the project. 

9 ‘‘(C) DETERMINATION MADE WHEN CRED10 IT AMOUNT APPLIED FOR AND WHEN BUILDING

11 PLACED IN SERVICE.— 

12 ‘‘(i) IN GENERAL.—A determination 

13 under subparagraph (A) shall be made as 

14 of each of the following times: 

15 ‘‘(I) The application for the 

16 housing credit dollar amount. 

17 ‘‘(II) The allocation of the hous18 ing credit dollar amount. 

19 ‘‘(III) The date the building is 

20 placed in service. 

21 ‘‘(ii) CERTIFICATION AS TO AMOUNT

22 OF OTHER SUBSIDIES.—Prior to each de23 termination under clause (i), the taxpayer 

24 shall certify to the housing credit agency 

25 the full extent of all Federal, State, and 


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1 local subsidies which apply (or which the 

2 taxpayer expects to apply) with respect to 

3 the building. 

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

5 such regulations as may be necessary or appropriate to 

6 carry out the purposes of this section, including regula7 tions— 

8 ‘‘(1) dealing with— 

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

10 building or only a portion of a building, or 

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

12 in portions, 

13 ‘‘(2) providing for the application of this section 

14 to short taxable years, 

15 ‘‘(3) preventing the avoidance of the rules of 

16 this section, and 

17 ‘‘(4) providing the opportunity for housing cred18 it agencies to correct administrative errors and omis19 sions with respect to allocations and record keeping 

20 within a reasonable period after their discovery, tak21 ing into account the availability of regulations and 

22 other administrative guidance from the Secretary.’’. 

23 (b) TREATMENT AS PART OF GENERAL BUSINESS

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

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1 graph (40), by striking the period at the end of paragraph 

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

3 following new paragraph: 

4 ‘‘(42) the middle-income housing credit deter5 mined under section 42A(a).’’. 

6 (c) UNUSED ALLOCATIONS CARRIED OVER TO LOW7 INCOME HOUSING CREDIT.— 

8 (1) IN GENERAL.—Clause (i) of section 

9 42(h)(3)(C) of the Internal Revenue Code of 1986 

10 is amended— 

11 (A) by striking ‘‘the unused’’ and inserting 

12 ‘‘the sum of— 

13 ‘‘(I) the unused’’, 

14 (B) by inserting ‘‘plus’’ after ‘‘calendar 

15 year,’’, and 

16 (C) by adding at the end the following new 

17 subclause: 

18 ‘‘(II) the unused middle-income 

19 State housing credit (if any) of such 

20 State for the preceding calendar 

21 year,’’. 

22 (2) UNUSED MIDDLE-INCOME STATE HOUSING

23 CREDIT.—The second sentence of section 

24 42(h)(3)(C) of such Code is amended by inserting ‘‘, 

25 and the unused middle-income State housing credit 


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1 for any calendar year is the excess (if any) of the 

2 amount described in section 42A(h)(3)(C) (after ap3 plication of section 42A(h)(7)) for such State over 

4 the aggregate amount of middle-income housing 

5 credit dollar amount allocated by such State under 

6 section 42A for such year’’ after ‘‘for such year’’. 

7 (3) UNUSED MIDDLE INCOME STATE HOUSING

8 CREDIT INCLUDED IN CARRYOVER ALLOCATION.— 

9 Section 42(h)(3)(D)(ii) of such Code is amended— 

10 (A) by inserting ‘‘the sum of’’ after ‘‘is the 

11 excess (if any) of’’; and 

12 (B) by inserting ‘‘plus the unused middle13 income State housing credit (as so defined)’’ 

14 after ‘‘as defined in subparagraph (C)(i))’’. 

15 (d) REDUCTION IN BASIS.—Section 1016(a) of the 

16 Internal Revenue Code of 1986 is amended— 

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

18 (37); 

19 (2) by redesignating paragraph (38) as para20 graph (39); and 

21 (3) by inserting after paragraph (37) the fol22 lowing new paragraph: 

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

24 42A(i)(8), and’’. 


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1 (e) TREATMENT UNDER BASE EROSION MINIMUM

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

3 1986 is amended by redesignating subparagraphs (B) and 

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

5 inserting after subparagraphs (A) the following new sub6 paragraph: 

7 ‘‘(B) the middle-income housing credit de8 termined under section 42A(a),’’. 

9 (f) CONFORMING AMENDMENTS.— 

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

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

12 after ‘‘42’’. 

13 (2) Section 50(c)(3)(C) of such Code is amend14 ed by inserting ‘‘or 42A’’ after ‘‘42’’. 

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

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

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

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

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

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

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

22 amended by inserting after the item relating to sec23 tion 42 the following new item: 

‘‘Sec. 42A. Middle-income housing credit.’’. 

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

25 this section shall apply to buildings placed in service after 


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1 December 31, 2023, in taxable years ending after such 

2 date. 

3 SEC. 214. NEIGHBORHOOD HOMES CREDIT. 

4 (a) FINDINGS AND PURPOSE.— 

5 (1) FINDINGS.—Congress finds the following: 

6 (A) Experts have determined that it could 

7 take nearly a decade to address the housing 

8 shortage in the United States, in large part due 

9 to increasing housing prices and decreased 

10 housing inventory. 

11 (B) The housing supply shortage dis12 proportionately impacts low-income and dis13 tressed communities. 

14 (C) Homeownership is a primary source of 

15 household wealth and neighborhood stability. 

16 Many distressed communities have low rates of 

17 homeownership and lack quality, affordable 

18 starter homes. 

19 (D) Housing revitalization in distressed 

20 communities is prevented by the value gap, the 

21 difference between the price to rehabilitate a 

22 home and the sale value of the home. 

23 (E) The Neighborhood Homes Investment 

24 Act can address the value gap to increase hous25 ing rehabilitation in distressed communities. 


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1 (F) This section and the amendments 

2 made by this section have the potential to gen3 erate 500,000 homes over 10 years, 

4 $125,000,000,000 of total development activity, 

5 over 800,000 jobs in construction and construc6 tion-related industries, and over 

7 $35,000,000,000 in Federal, state, and local 

8 tax revenues. 

9 (2) SENSE OF CONGRESS.—It is the sense of 

10 Congress that the neighborhood homes credit (as 

11 added under this section) should be an activity ad12 ministered in a manner which— 

13 (A) is consistent with the Fair Housing 

14 Act of 1968 (42 U.S.C. 3601 et seq.); 

15 (B) empowers residents in eligible commu16 nities; and 

17 (C) revitalizes distressed neighborhoods. 

18 (b) ALLOWANCE OF CREDIT.—Subpart D of part IV 

19 of subchapter A of chapter 1 of the Internal Revenue Code 

20 of 1986, as amended by section 213, is amended by insert21 ing after section 42A the following new section: 

22 ‘‘SEC. 42B. NEIGHBORHOOD HOMES CREDIT. 

23 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec24 tion 38, the neighborhood homes credit determined under 

25 this section for the taxable year is, with respect to each 


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1 qualified residence sold by the taxpayer during such tax2 able year in an affordable sale, the lesser of— 

3 ‘‘(1) an amount equal to— 

4 ‘‘(A) the excess (if any) of— 

5 ‘‘(i) the reasonable development costs 

6 paid or incurred by the taxpayer with re7 spect to such qualified residence, over 

8 ‘‘(ii) the sale price of such qualified 

9 residence (reduced by any reasonable ex10 penses paid or incurred by the taxpayer in 

11 connection with such sale), or 

12 ‘‘(B) if the neighborhood homes credit 

13 agency determines it is necessary to ensure fi14 nancial feasibility, an amount not to exceed 120 

15 percent of the amount under subparagraph (A), 

16 ‘‘(2) 35 percent of the eligible development 

17 costs paid or incurred by the taxpayer with respect 

18 to such qualified residence, or 

19 ‘‘(3) 28 percent of the national median sale 

20 price for new homes (as determined pursuant to the 

21 most recent census data available as of the date on 

22 which the neighborhood homes credit agency makes 

23 an allocation for the qualified project). 

24 ‘‘(b) DEVELOPMENT COSTS.—For purposes of this 

25 section— 


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1 ‘‘(1) REASONABLE DEVELOPMENT COSTS.— 

2 ‘‘(A) IN GENERAL.—The term ‘reasonable 

3 development costs’ means amounts paid or in4 curred for the acquisition of buildings and land, 

5 construction, substantial rehabilitation, demoli6 tion of structures, or environmental remedi7 ation, to the extent that the neighborhood 

8 homes credit agency determines that such 

9 amounts meet the standards specified pursuant 

10 to subsection (f)(1)(C) (as of the date on which 

11 construction or substantial rehabilitation is sub12 stantially complete, as determined by such 

13 agency) and are necessary to ensure the finan14 cial feasibility of such qualified residence. 

15 ‘‘(B) CONSIDERATIONS IN MAKING DETER16 MINATION.—In making the determination under 

17 subparagraph (A), the neighborhood homes 

18 credit agency shall consider— 

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

20 the total financing, 

21 ‘‘(ii) any proceeds or receipts gen22 erated or expected to be generated by rea23 son of tax benefits, and 

24 ‘‘(iii) the reasonableness of the devel25 opmental costs and fees. 


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1 ‘‘(2) ELIGIBLE DEVELOPMENT COSTS.—The 

2 term ‘eligible development costs’ means the amount 

3 which would be reasonable development costs if the 

4 amounts taken into account as paid or incurred for 

5 the acquisition of buildings and land did not exceed 

6 75 percent of such costs determined without regard 

7 to any amount paid or incurred for the acquisition 

8 of buildings and land. 

9 ‘‘(3) SUBSTANTIAL REHABILITATION.—The 

10 term ‘substantial rehabilitation’ means amounts paid 

11 or incurred for rehabilitation of a qualified residence 

12 if such amounts exceed the greater of— 

13 ‘‘(A) $20,000, or 

14 ‘‘(B) 20 percent of the amounts paid or in15 curred by the taxpayer for the acquisition of 

16 buildings and land with respect to such quali17 fied residence. 

18 ‘‘(4) CONSTRUCTION AND REHABILITATION

19 ONLY AFTER ALLOCATION TAKEN INTO ACCOUNT.— 

20 ‘‘(A) IN GENERAL.—The terms ‘reasonable 

21 development costs’ and ‘eligible development 

22 costs’ shall not include any amount paid or in23 curred before the date on which an allocation is 

24 made to the taxpayer under subsection (e) with 

25 respect to the qualified project of which the 


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1 qualified residence is part unless such amount 

2 is paid or incurred for the acquisition of build3 ings or land. 

4 ‘‘(B) LAND AND BUILDING ACQUISITION

5 COSTS.—Amounts paid or incurred for the ac6 quisition of buildings or land shall be included 

7 under paragraph (A) only if paid or incurred 

8 not more than 3 years before the date on which 

9 the allocation referred to in subparagraph (A) 

10 is made. If the taxpayer acquired any building 

11 or land from an entity (or any related party to 

12 such entity) that holds an ownership interest in 

13 the taxpayer, then such entity must also have 

14 acquired such property within such 3-year pe15 riod, and the acquisition cost included under 

16 subparagraph (A) with respect to the taxpayer 

17 shall not exceed the amount such entity paid or 

18 incurred to acquire such property. 

19 ‘‘(c) QUALIFIED RESIDENCE.—For purposes of this 

20 section— 

21 ‘‘(1) IN GENERAL.—The term ‘qualified resi22 dence’ means a residence that— 

23 ‘‘(A) is real property affixed on a perma24 nent foundation, 

25 ‘‘(B) is— 


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1 ‘‘(i) a house which is comprised of 4 

2 or fewer residential units, 

3 ‘‘(ii) a condominium unit, or 

4 ‘‘(iii) a house or an apartment owned 

5 by a cooperative housing corporation (as 

6 defined in section 216(b)), 

7 ‘‘(C) is part of a qualified project with re8 spect to which the neighborhood homes credit 

9 agency has made an allocation under subsection 

10 (e), and 

11 ‘‘(D) is located in a qualified census tract 

12 (determined as of the date of such allocation). 

13 ‘‘(2) QUALIFIED CENSUS TRACT.— 

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

15 census tract’ means a census tract— 

16 ‘‘(i) which— 

17 ‘‘(I) has a median family income 

18 which does not exceed 80 percent of 

19 the median family income for the ap20 plicable area, 

21 ‘‘(II) has a poverty rate that is 

22 not less than 130 percent of the pov23 erty rate of the applicable area, and 

24 ‘‘(III) has a median value for 

25 owner-occupied homes that does not 


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1 exceed the median value for owner-oc2 cupied homes in the applicable area, 

3 ‘‘(ii) which— 

4 ‘‘(I) is located in a city which has 

5 a population of not less than 50,000 

6 and such city has a poverty rate that 

7 is not less than 150 percent of the 

8 poverty rate of the applicable area, 

9 ‘‘(II) has a median family income 

10 which does not exceed the median 

11 family income for the applicable area, 

12 and 

13 ‘‘(III) has a median value for 

14 owner-occupied homes that does not 

15 exceed 80 percent of the median value 

16 for owner-occupied homes in the ap17 plicable area, 

18 ‘‘(iii) which— 

19 ‘‘(I) is located in a nonmetropoli20 tan county, 

21 ‘‘(II) has a median family income 

22 which does not exceed the median 

23 family income for the applicable area, 

24 and 


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1 ‘‘(III) has been designated by a 

2 neighborhood homes credit agency 

3 under this clause, or 

4 ‘‘(iv) which is not otherwise a quali5 fied census tract and is located in a dis6 aster area (as defined in section 

7 7508A(d)(3)), but only with respect to 

8 credits allocated in any period during 

9 which the President of the United States 

10 has determined that such area warrants in11 dividual or individual and public assistance 

12 by the Federal Government under the Rob13 ert T. Stafford Disaster Relief and Emer14 gency Assistance Act. 

15 ‘‘(B) APPLICABLE AREA.—The term ‘appli16 cable area’ means— 

17 ‘‘(i) in the case of a metropolitan cen18 sus tract, the metropolitan area in which 

19 such census tract is located, and 

20 ‘‘(ii) in the case of a census tract 

21 other than a census tract described in 

22 clause (i), the State. 

23 ‘‘(d) AFFORDABLE SALE.—For purposes of this sec24 tion— 


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1 ‘‘(1) IN GENERAL.—The term ‘affordable sale’ 

2 means a sale to a qualified homeowner of a qualified 

3 residence that the neighborhood homes credit agency 

4 certifies as meeting the standards promulgated 

5 under subsection (f)(1)(D) for a price that does not 

6 exceed— 

7 ‘‘(A) in the case of any qualified residence 

8 not described in subparagraph (B), (C), or (D), 

9 the amount equal to the product of 4 multiplied 

10 by the median family income for the applicable 

11 area (as determined pursuant to the most re12 cent census data available as of the date of the 

13 contract for such sale), 

14 ‘‘(B) in the case of a house comprised of 

15 2 residential units, 125 percent of the amount 

16 described in subparagraph (A), 

17 ‘‘(C) in the case of a house comprised of 

18 3 residential units, 150 percent of the amount 

19 described in subparagraph (A), or 

20 ‘‘(D) in the case of a house comprised of 

21 4 residential units, 175 percent of the amount 

22 described in subparagraph (A). 

23 ‘‘(2) QUALIFIED HOMEOWNER.—The term 

24 ‘qualified homeowner’ means, with respect to a 

25 qualified residence, an individual— 


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1 ‘‘(A) who owns and uses such qualified res2 idence as the principal residence of such indi3 vidual, and 

4 ‘‘(B) whose family income (determined as 

5 of the date that a binding contract for the af6 fordable sale of such residence is entered into) 

7 is 140 percent or less of the median family in8 come for the applicable area in which the quali9 fied residence is located. 

10 ‘‘(e) CREDIT CEILING AND ALLOCATIONS.— 

11 ‘‘(1) CREDIT LIMITED BASED ON ALLOCATIONS

12 TO QUALIFIED PROJECTS.— 

13 ‘‘(A) IN GENERAL.—The credit allowed 

14 under subsection (a) to any taxpayer for any 

15 taxable year with respect to one or more quali16 fied residences which are part of the same 

17 qualified project shall not exceed the excess (if 

18 any) of— 

19 ‘‘(i) the amount allocated by the 

20 neighborhood homes credit agency under 

21 this paragraph to such taxpayer with re22 spect to such qualified project, over 

23 ‘‘(ii) the aggregate amount of credit 

24 allowed under subsection (a) to such tax25 payer with respect to qualified residences 


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1 which are a part of such qualified project 

2 for all prior taxable years. 

3 ‘‘(B) DEADLINE FOR COMPLETION.—No 

4 credit shall be allowed under subsection (a) 

5 with respect to any qualified residence unless 

6 the affordable sale of such residence is during 

7 the 5-year period beginning on the date of the 

8 allocation to the qualified project of which such 

9 residence is a part (or, in the case of a qualified 

10 residence to which subsection (i) applies, the re11 habilitation of such residence is completed dur12 ing such 5-year period). 

13 ‘‘(2) LIMITATIONS ON ALLOCATIONS TO QUALI14 FIED PROJECTS.— 

15 ‘‘(A) ALLOCATIONS LIMITED BY STATE

16 NEIGHBORHOOD HOMES CREDIT CEILING.—The 

17 aggregate amount allocated to taxpayers with 

18 respect to qualified projects by the neighbor19 hood homes credit agency of any State for any 

20 calendar year shall not exceed the State neigh21 borhood homes credit amount of such State for 

22 such calendar year. 

23 ‘‘(B) SET-ASIDE FOR CERTAIN PROJECTS

24 INVOLVING QUALIFIED NONPROFIT ORGANIZA25 TIONS.—Rules similar to the rules of section 


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1 42(h)(5) shall apply for purposes of this sec2 tion. 

3 ‘‘(3) DETERMINATION OF STATE NEIGHBOR4 HOOD HOMES CREDIT CEILING.— 

5 ‘‘(A) IN GENERAL.—The State neighbor6 hood homes credit amount for a State for a cal7 endar year is an amount equal to the sum of— 

8 ‘‘(i) the greater of— 

9 ‘‘(I) the product of $7, multiplied 

10 by the State population (determined 

11 in accordance with section 146(j)), or 

12 ‘‘(II) $9,000,000, and 

13 ‘‘(ii) any amount previously allocated 

14 to any taxpayer with respect to any quali15 fied project by the neighborhood homes 

16 credit agency of such State which can no 

17 longer be allocated to any qualified resi18 dence because the 5-year period described 

19 in paragraph (1)(B) expires during cal20 endar year. 

21 ‘‘(B) 3-YEAR CARRYFORWARD OF UNUSED

22 LIMITATION.—The State neighborhood homes 

23 credit amount for a State for a calendar year 

24 shall be increased by the excess (if any) of the 

25 State neighborhood homes credit amount for 


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1 such State for the preceding calendar year over 

2 the aggregate amount allocated by the neigh3 borhood homes credit agency of such State dur4 ing such preceding calendar year. Any amount 

5 carried forward under the preceding sentence 

6 shall not be carried past the third calendar year 

7 after the calendar year in which such credit 

8 amount originally arose, determined on a first9 in, first-out basis. 

10 ‘‘(f) RESPONSIBILITIES OF NEIGHBORHOOD HOMES

11 CREDIT AGENCIES.— 

12 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

13 (e), the State neighborhood homes credit dollar 

14 amount shall be zero for a calendar year unless the 

15 neighborhood homes credit agency of the State— 

16 ‘‘(A) allocates such amount pursuant to a 

17 qualified allocation plan of the neighborhood 

18 homes credit agency, 

19 ‘‘(B) allocates not more than 20 percent of 

20 amounts allocated in the previous year (or for 

21 allocations made in 2024, not more than 20 

22 percent of the neighborhood homes credit ceil23 ing for such year) to projects with respect to 

24 qualified residences which— 


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1 ‘‘(i) are located in census tracts de2 scribed in subsection (c)(2)(A)(iii), 

3 (c)(2)(A)(iv), (i)(5), or 

4 ‘‘(ii) are not located in a qualified 

5 census tract but meet the requirements of 

6 subsection (i)(8), 

7 ‘‘(C) promulgates standards with respect 

8 to reasonable qualified development costs and 

9 fees, 

10 ‘‘(D) promulgates standards with respect 

11 to construction quality, 

12 ‘‘(E) in the case of any neighborhood 

13 homes credit agency which makes an allocation 

14 to a qualified project which includes any quali15 fied residence to which subsection (i) applies, 

16 promulgates standards with respect to pro17 tecting the owners of such residences, including 

18 the capacity of such owners to pay rehabilita19 tion costs not covered by the credit provided by 

20 this section and providing for the disclosure to 

21 such owners of their rights and responsibilities 

22 with respect to the rehabilitation of such resi23 dences, 


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1 ‘‘(F) submits to the Secretary (at such 

2 time and in such manner as the Secretary may 

3 prescribe) an annual report specifying— 

4 ‘‘(i) the amount of the neighborhood 

5 homes credits allocated to each qualified 

6 project for the previous year, 

7 ‘‘(ii) with respect to each qualified 

8 residence completed in the preceding cal9 endar year— 

10 ‘‘(I) the census tract in which 

11 such qualified residence is located, 

12 ‘‘(II) with respect to the qualified 

13 project that includes such qualified 

14 residence, the year in which such 

15 project received an allocation under 

16 this section, 

17 ‘‘(III) whether such qualified res18 idence was new, substantially rehabili19 tated and sold to a qualified home20 owner, or substantially rehabilitated 

21 pursuant to subsection (i), 

22 ‘‘(IV) the eligible development 

23 costs of such qualified residence, 


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1 ‘‘(V) the amount of the neighbor2 hood homes credit with respect to 

3 such qualified residence, 

4 ‘‘(VI) the sales price of such 

5 qualified residence, if applicable, and 

6 ‘‘(VII) the family income of the 

7 qualified homeowner (expressed as a 

8 percentage of the applicable area me9 dian family income for the location of 

10 the qualified residence), and 

11 ‘‘(iii) such other information as the 

12 Secretary may require, and 

13 ‘‘(G) makes available to the general public 

14 a written explanation for any allocation of a 

15 neighborhood homes credit dollar amount which 

16 is not made in accordance with established pri17 orities and selection criteria of the neighbor18 hood homes credit agency. 

19 Subparagraph (B) shall be applied by substituting 

20 ‘40 percent’ for ‘20 percent’ each place it appears in 

21 the case of any State in which at least 45 percent 

22 of the State population resides outside metropolitan 

23 statistical areas (within the meaning of section 

24 143(k)(2)(B)) and less than 20 percent of the cenVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00234 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 sus tracts located in the State are described in sub2 section (c)(2)(A)(i). 

3 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur4 poses of this subsection, the term ‘qualified alloca5 tion plan’ means any plan which— 

6 ‘‘(A) sets forth the selection criteria to be 

7 used to prioritize qualified projects for alloca8 tions of State neighborhood homes credit dollar 

9 amounts, including— 

10 ‘‘(i) the need for new or substantially 

11 rehabilitated owner-occupied homes in the 

12 area addressed by the project, 

13 ‘‘(ii) the expected contribution of the 

14 project to neighborhood stability and revi15 talization, including the impact on neigh16 borhood residents, 

17 ‘‘(iii) the capability and prior perform18 ance of the project sponsor, and 

19 ‘‘(iv) the likelihood the project will re20 sult in long-term homeownership, 

21 ‘‘(B) has been made available for public 

22 comment, and 

23 ‘‘(C) provides a procedure that the neigh24 borhood homes credit agency (or any agent or 


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1 contractor of such agency) shall follow for pur2 poses of— 

3 ‘‘(i) identifying noncompliance with 

4 any provisions of this section, and 

5 ‘‘(ii) notifying the Internal Revenue 

6 Service of any such noncompliance of 

7 which the agency becomes aware. 

8 ‘‘(g) REPAYMENT.— 

9 ‘‘(1) IN GENERAL.— 

10 ‘‘(A) SOLD DURING 5-YEAR PERIOD.—If a 

11 qualified residence is sold during the 5-year pe12 riod beginning immediately after the affordable 

13 sale of such qualified residence referred to in 

14 subsection (a), the seller shall transfer an 

15 amount equal to the repayment amount to the 

16 relevant neighborhood homes credit agency. 

17 ‘‘(B) USE OF REPAYMENTS.—A neighbor18 hood homes credit agency shall use any amount 

19 received pursuant to subparagraph (A) only for 

20 purposes of qualified projects. 

21 ‘‘(2) REPAYMENT AMOUNT.—For purposes of 

22 paragraph (1)(A)— 

23 ‘‘(A) IN GENERAL.—The repayment 

24 amount is an amount equal to the applicable 


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1 percentage of the gain from the sale to which 

2 the repayment relates. 

3 ‘‘(B) APPLICABLE PERCENTAGE.—For 

4 purposes of subparagraph (A), the applicable 

5 percentage is 50 percent, reduced by 10 per6 centage points for each year of the 5-year pe7 riod referred to in paragraph (1)(A) which ends 

8 before the date of such sale. 

9 ‘‘(3) LIEN FOR REPAYMENT AMOUNT.—A 

10 neighborhood homes credit agency receiving an allo11 cation under this section shall place a lien on each 

12 qualified residence that is built or rehabilitated as 

13 part of a qualified project for an amount such agen14 cy deems necessary to ensure potential repayment 

15 pursuant to paragraph (1)(A). 

16 ‘‘(4) WAIVER.— 

17 ‘‘(A) IN GENERAL.—The neighborhood 

18 homes credit agency may waive the repayment 

19 required under paragraph (1)(A) if the agency 

20 determines that making a repayment would 

21 constitute a hardship to the seller. 

22 ‘‘(B) HARDSHIP.—For purposes of sub23 paragraph (A), with respect to the seller, a 

24 hardship may include— 

25 ‘‘(i) divorce, 


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1 ‘‘(ii) disability, 

2 ‘‘(iii) illness, or 

3 ‘‘(iv) any other hardship identified by 

4 the neighborhood homes credit agency for 

5 purposes of this paragraph. 

6 ‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 

7 For purposes of this section— 

8 ‘‘(1) NEIGHBORHOOD HOMES CREDIT AGEN9 CY.—The term ‘neighborhood homes credit agency’ 

10 means the agency designated by the governor of a 

11 State as the neighborhood homes credit agency of 

12 the State. 

13 ‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 

14 project’ means a project that a neighborhood homes 

15 credit agency certifies will build or substantially re16 habilitate one or more qualified residences. 

17 ‘‘(3) DETERMINATIONS OF FAMILY INCOME.— 

18 Rules similar to the rules of section 143(f)(2) shall 

19 apply for purposes of this section. 

20 ‘‘(4) POSSESSIONS TREATED AS STATES.—The 

21 term ‘State’ includes the District of Columbia and 

22 the possessions of the United States. 

23 ‘‘(5) SPECIAL RULES RELATED TO CONDOMIN24 IUMS AND COOPERATIVE HOUSING CORPORATIONS.— 


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1 ‘‘(A) DETERMINATION OF DEVELOPMENT

2 COSTS.—In the case of a qualified residence de3 scribed in clause (ii) or (iii) of subsection 

4 (c)(1)(A), the reasonable development costs and 

5 eligible development costs of such qualified resi6 dence shall be an amount equal to such costs, 

7 respectively, of the entire condominium or coop8 erative housing property in which such qualified 

9 residence is located, multiplied by a fraction— 

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

11 total floor space of such qualified resi12 dence, and 

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

14 total floor space of all residences within 

15 such property. 

16 ‘‘(B) TENANT-STOCKHOLDERS OF COOPER17 ATIVE HOUSING CORPORATIONS TREATED AS

18 OWNERS.—In the case of a cooperative housing 

19 corporation (as such term is defined in section 

20 216(b)), a tenant-stockholder shall be treated 

21 as owning the house or apartment which such 

22 person is entitled to occupy. 

23 ‘‘(6) RELATED PARTY SALES NOT TREATED AS

24 AFFORDABLE SALES.— 


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1 ‘‘(A) IN GENERAL.—A sale between related 

2 persons shall not be treated as an affordable 

3 sale. 

4 ‘‘(B) RELATED PERSONS.—For purposes 

5 of this paragraph, a person (in this subpara6 graph referred to as the ‘related person’) is re7 lated to any person if the related person bears 

8 a relationship to such person specified in sec9 tion 267(b) or 707(b)(1), or the related person 

10 and such person are engaged in trades or busi11 nesses under common control (within the mean12 ing of subsections (a) and (b) of section 52). 

13 For purposes of the preceding sentence, in ap14 plying section 267(b) or 707(b)(1), ‘10 percent’ 

15 shall be substituted for ‘50 percent’. 

16 ‘‘(7) INFLATION ADJUSTMENT.— 

17 ‘‘(A) IN GENERAL.—In the case of a cal18 endar year after 2023, the dollar amounts in 

19 subsections (b)(3)(A), (e)(3)(A)(i)(I), 

20 (e)(3)(A)(i)(II), and (i)(2)(C) shall each be in21 creased by an amount equal to— 

22 ‘‘(i) such dollar amount, multiplied by 

23 ‘‘(ii) the cost-of-living adjustment de24 termined under section 1(f)(3) for such 

25 calendar year by substituting ‘calendar 


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1 year 2022’ for ‘calendar year 2016’ in sub2 paragraph (A)(ii) thereof. 

3 ‘‘(B) ROUNDING.— 

4 ‘‘(i) In the case of the dollar amounts 

5 in subsection (b)(3)(A) and (i)(2)(C), any 

6 increase under paragraph (1) which is not 

7 a multiple of $1,000 shall be rounded to 

8 the nearest multiple of $1,000. 

9 ‘‘(ii) In the case of the dollar amount 

10 in subsection (e)(3)(A)(i)(I), any increase 

11 under paragraph (1) which is not a mul12 tiple of $0.01 shall be rounded to the near13 est multiple of $0.01. 

14 ‘‘(iii) In the case of the dollar amount 

15 in subsection (e)(3)(A)(i)(II), any increase 

16 under paragraph (1) which is not a mul17 tiple of $100,000 shall be rounded to the 

18 nearest multiple of $100,000. 

19 ‘‘(8) REPORT.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 annually issue a report, to be made available to 

22 the public, which contains the information sub23 mitted pursuant to subsection (f)(1)(F). 

24 ‘‘(B) DE-IDENTIFICATION.—The Secretary 

25 shall ensure that any information made public 


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1 pursuant to subparagraph (A) excludes any in2 formation that would allow for the identification 

3 of qualified homeowners. 

4 ‘‘(9) LIST OF QUALIFIED CENSUS TRACTS.— 

5 The Secretary of Housing and Urban Development 

6 shall, for each year, make publicly available a list of 

7 qualified census tracts under— 

8 ‘‘(A) on a combined basis, clauses (i) and 

9 (ii) of subsection (c)(2)(A), 

10 ‘‘(B) clause (iii) of such subsection, and 

11 ‘‘(C) subsection (i)(5)(A). 

12 ‘‘(10) DENIAL OF DEDUCTIONS IF CONVERTED

13 TO RENTAL HOUSING.—If, during the 5-year period 

14 beginning immediately after the affordable sale of a 

15 qualified residence referred to in subsection (a), an 

16 individual who owns a qualified residence (whether 

17 or not such individual was the purchaser in such af18 fordable sale) fails to use such qualified residence as 

19 such individual’s principal residence for any period 

20 of time, no deduction shall be allowed for expenses 

21 paid or incurred by such individual with respect to 

22 renting, during such period of time, such qualified 

23 residence. 

24 ‘‘(i) APPLICATION OF CREDIT WITH RESPECT TO

25 OWNER-OCCUPIED REHABILITATIONS.— 


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1 ‘‘(1) IN GENERAL.—In the case of a qualified 

2 rehabilitation by the taxpayer of any qualified resi3 dence which is owned (as of the date that the writ4 ten binding contract referred to in paragraph (3) is 

5 entered into) by a specified homeowner, the rules of 

6 paragraphs (2) through (7) shall apply. 

7 ‘‘(2) ALTERNATIVE CREDIT DETERMINATION.— 

8 In the case of any qualified residence described in 

9 paragraph (1), the neighborhood homes credit deter10 mined under subsection (a) with respect to such res11 idence shall (in lieu of any credit otherwise deter12 mined under subsection (a) with respect to such res13 idence) be allowed in the taxable year during which 

14 the qualified rehabilitation is completed (as deter15 mined by the neighborhood homes credit agency) 

16 and shall be equal to the least of— 

17 ‘‘(A) the excess (if any) of— 

18 ‘‘(i) the amounts paid or incurred by 

19 the taxpayer for the qualified rehabilitation 

20 of the qualified residence to the extent that 

21 such amounts are certified by the neigh22 borhood homes credit agency (at the time 

23 of the completion of such rehabilitation) as 

24 meeting the standards specified pursuant 

25 to subsection (f)(1)(C), over 


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1 ‘‘(ii) any amounts paid to such tax2 payer for such rehabilitation, 

3 ‘‘(B) 50 percent of the amounts described 

4 in subparagraph (A)(i), or 

5 ‘‘(C) $50,000. 

6 ‘‘(3) QUALIFIED REHABILITATION.— 

7 ‘‘(A) IN GENERAL.—For purposes of this 

8 subsection, the term ‘qualified rehabilitation’ 

9 means a rehabilitation or reconstruction per10 formed pursuant to a written binding contract 

11 between the taxpayer and the specified home12 owner if the amount paid or incurred by the 

13 taxpayer in the performance of such rehabilita14 tion or reconstruction exceeds the dollar 

15 amount in effect under subsection (b)(3)(A). 

16 ‘‘(B) APPLICATION OF LIMITATION TO EX17 PENSES PAID OR INCURRED AFTER ALLOCA18 TION.—A rule similar to the rule of section 

19 (b)(4) shall apply for purposes of this sub20 section. 

21 ‘‘(4) SPECIFIED HOMEOWNER.—For purposes 

22 of this subsection, the term ‘qualified homeowner’ 

23 means, with respect to a qualified residence, an indi24 vidual— 


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1 ‘‘(A) who owns and uses such qualified res2 idence as the principal residence of such indi3 vidual as of the date that the written binding 

4 contract referred to in paragraph (3) is entered 

5 into, and 

6 ‘‘(B) whose family income (determined as 

7 of such date) does not exceed the median family 

8 income for the applicable area (with respect to 

9 the census tract in which the qualified residence 

10 is located). 

11 ‘‘(5) ADDITIONAL CENSUS TRACTS IN WHICH

12 OWNER-OCCUPIED RESIDENCES MAY BE LOCATED.— 

13 In the case of any qualified residence described in 

14 paragraph (1), the term ‘qualified census tract’ in15 cludes any census tract which— 

16 ‘‘(A) meets the requirements of subsection 

17 (c)(2)(A)(i) without regard to subclause (III) 

18 thereof, and 

19 ‘‘(B) is designated by the neighborhood 

20 homes credit agency for purposes of this para21 graph. 

22 ‘‘(6) MODIFICATION OF REPAYMENT REQUIRE23 MENT.—In the case of any qualified residence de24 scribed in paragraph (1), subsection (g) shall be ap25 plied by beginning the 5-year period otherwise deVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 scribed therein on the date on which the qualified 

2 homeowner acquired such residence. 

3 ‘‘(7) RELATED PARTIES.—Paragraph (1) shall 

4 not apply if the taxpayer is the owner of the quali5 fied residence described in paragraph (1) or is re6 lated (within the meaning of subsection (h)(6)(B)) 

7 to such owner. 

8 ‘‘(8) PYRRHOTITE REMEDIATION.—The require9 ment of subsection (c)(1)(C) shall not apply to a 

10 qualified rehabilitation under this subsection of a 

11 qualified residence that is documented by an engi12 neer’s report and core testing to have a foundation 

13 that is adversely impacted by pyrrhotite or other 

14 iron sulfide minerals. 

15 ‘‘(j) REGULATIONS.—The Secretary shall prescribe 

16 such regulations as may be necessary or appropriate to 

17 carry out the purposes of this section, including regula18 tions that prevent avoidance of the rules, and abuse of 

19 the purposes, of this section.’’. 

20 (c) CREDIT ALLOWED AS PART OF GENERAL BUSI21 NESS CREDIT.—Section 38(b) of the Internal Revenue 

22 Code of 1986, as amended by section 213, is amended by 

23 striking ‘‘plus’’ at the end of paragraph (41), by striking 

24 the period at the end of paragraph (42) and inserting ‘‘, 


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1 plus’’, and by adding at the end the following new para2 graph: 

3 ‘‘(43) the neighborhood homes credit deter4 mined under section 42B(a).’’. 

5 (d) CREDIT ALLOWED AGAINST ALTERNATIVE MIN6 IMUM TAX.—Section 38(c)(4)(B) of the Internal Revenue 

7 Code of 1986 is amended by redesignating clauses (iv) 

8 through (xii) as clauses (v) through (xiii), respectively, and 

9 by inserting after clause (iii) the following new clause: 

10 ‘‘(iv) the credit determined under sec11 tion 42B,’’. 

12 (e) BASIS ADJUSTMENTS.— 

13 (1) ENERGY EFFICIENT HOME IMPROVEMENT

14 CREDIT.—Section 25C(g) of the Internal Revenue 

15 Code of 1986 is amended by adding after the first 

16 sentence the following new sentence: ‘‘This sub17 section shall not apply for purposes of determining 

18 the eligible development costs or adjusted basis of 

19 any building under section 42B.’’. 

20 (2) RESIDENTIAL CLEAN ENERGY CREDIT.— 

21 Section 25D(f) of such Code is amended by adding 

22 after the first sentence the following new sentence: 

23 ‘‘This subsection shall not apply for purposes of de24 termining the eligible development costs or adjusted 

25 basis of any building under section 42B.’’. 


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1 (3) NEW ENERGY EFFICIENT HOME CREDIT.— 

2 Section 45L(e) of such Code is amended by inserting 

3 ‘‘or for purposes of determining the eligible develop4 ment costs or adjusted basis of any building under 

5 section 42B’’ after ‘‘section 42’’. 

6 (f) EXCLUSION FROM GROSS INCOME.—Part III of 

7 subchapter B of chapter 1 of the Internal Revenue Code 

8 of 1986 is amended by inserting before section 140 the 

9 following new section: 

10 ‘‘SEC. 139J. STATE ENERGY SUBSIDIES FOR QUALIFIED 

11 RESIDENCES. 

12 ‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in13 come shall not include the value of any subsidy provided 

14 to a taxpayer (whether directly or indirectly) by any State 

15 energy office (as defined in section 124(a) of the Energy 

16 Policy Act of 2005 (42 U.S.C. 15821(a))) for purposes 

17 of any energy improvements made to a qualified residence 

18 (as defined in section 42B(c)(1)).’’. 

19 (g) CONFORMING AMENDMENTS.— 

20 (1) Subsections (i)(3)(C), (i)(6)(B)(i), and 

21 (k)(1) of section 469 of the Internal Revenue Code 

22 of 1986, as amended by section 213, are each 

23 amended by striking ‘‘or 42A’’ and inserting ‘‘, 42A, 

24 or 42B’’. 


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1 (2) The table of sections for subpart D of part 

2 IV of subchapter A of chapter 1 of such Code, as 

3 amended by section 213, is amended by inserting 

4 after the item relating to section 42A the following 

5 new item: 

‘‘Sec. 42B. Neighborhood homes credit.’’. 

6 (3) The table of sections for part III of sub7 chapter B of chapter 1 of such Code is amended by 

8 inserting before the item relating to section 140 the 

9 following new item: 

‘‘Sec. 139J. State energy subsidies for qualified residences.’’. 

10 (h) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2023. 

13 SEC. 215. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

14 (a) IN GENERAL.—Section 36 of the Internal Rev15 enue Code of 1986 is amended to read as follows: 

16 ‘‘SEC. 36. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

17 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in18 dividual who is a first-time homebuyer of a principal resi19 dence in the United States during a taxable year, there 

20 shall be allowed as a credit against the tax imposed by 

21 this subtitle for such taxable year an amount equal to 20 

22 percent of the purchase price of the residence. 

23 ‘‘(b) LIMITATIONS; SPECIAL RULES BASED ON MAR24 ITAL AND FILING STATUS.— 


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1 ‘‘(1) DOLLAR LIMITATION.—The credit allowed 

2 under subsection (a) shall not exceed $15,000. 

3 ‘‘(2) LIMITATION BASED ON PURCHASE

4 PRICE.—The amount allowable as a credit under 

5 subsection (a) (determined without regard to this 

6 paragraph and paragraph (3), and after the applica7 tion of paragraph (1)) for the taxable year shall be 

8 reduced (but not below zero) by the amount which 

9 bears the same ratio to the amount which is so al10 lowable as— 

11 ‘‘(A) the excess (if any) of— 

12 ‘‘(i) the purchase price of the resi13 dence, over 

14 ‘‘(ii) an amount equal to 110 percent 

15 of the conforming loan limit applicable to 

16 the residence, bears to 

17 ‘‘(B) $100,000. 

18 For purposes of the preceding sentence, the term 

19 ‘conforming loan limit’ with respect to any residence 

20 means the applicable limitation governing the max21 imum original principal obligation for a mortgage se22 cured by a residence of the same type, as determined 

23 and adjusted annually under section 302(b)(2) of 

24 the Federal National Mortgage Association Charter 


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1 Act and section 305(a)(2) of the Federal Home 

2 Loan Mortgage Corporation Act. 

3 ‘‘(3) LIMITATION BASED ON MODIFIED AD4 JUSTED GROSS INCOME.— 

5 ‘‘(A) IN GENERAL.—The amount allowable 

6 as a credit under subsection (a) (determined 

7 without regard to this paragraph and after the 

8 application of paragraphs (1) and (2)) for the 

9 taxable year shall be reduced (but not below 

10 zero) by the amount which bears the same ratio 

11 to the amount which is so allowable as— 

12 ‘‘(i) the excess (if any) of— 

13 ‘‘(I) the taxpayer’s modified ad14 justed gross income for the preceding 

15 taxable year, over 

16 ‘‘(II) the applicable threshold, 

17 bears to 

18 ‘‘(ii) $50,000. 

19 ‘‘(B) MODIFIED ADJUSTED GROSS IN20 COME.—For purposes of subparagraph (A), the 

21 term ‘modified adjusted gross income’ with re22 spect to any taxable year means the adjusted 

23 gross income of the taxpayer for such taxable 

24 year increased by any amount excluded from 


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1 gross income under section 911, 931, or 933 

2 for such taxable year. 

3 ‘‘(C) APPLICABLE THRESHOLD.—For pur4 poses of subparagraph (A), the applicable 

5 threshold is— 

6 ‘‘(i) except as provided in clauses (ii) 

7 and (iii), $100,000, 

8 ‘‘(ii) an amount equal to 150 percent 

9 of the amount in effect under clause (i), in 

10 the case of a head of household (as defined 

11 in section 2(b)), and 

12 ‘‘(iii) an amount equal to 200 percent 

13 of the amount in effect under clause (i), in 

14 the case of a joint return. 

15 ‘‘(4) ADDITIONAL LIMITATIONS.—No credit 

16 shall be allowed under subsection (a) with respect to 

17 the purchase of any residence for a taxable year— 

18 ‘‘(A) if the taxpayer is a nonresident alien, 

19 or 

20 ‘‘(B) if— 

21 ‘‘(i) the taxpayer has not attained age 

22 18 as of the date of such purchase, or 

23 ‘‘(ii) a deduction under section 151 

24 with respect to the taxpayer is allowable to 

25 another taxpayer for the taxable year. 


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1 In the case of a taxpayer who is married, the tax2 payer shall be treated as meeting the age require3 ment of subparagraph (B)(i) if the taxpayer or the 

4 taxpayer’s spouse meets such age requirement. 

5 ‘‘(5) MULTIPLE PURCHASERS.—If 2 or more in6 dividuals who are not married purchase a principal 

7 residence, the amount of the credit under subsection 

8 (a) shall be allocated among such individuals in such 

9 manner as the Secretary may prescribe by taking 

10 into account the requirements of paragraphs (2) and 

11 (3), except that the total amount of the credits al12 lowed to all such individuals shall not exceed the 

13 limitation under paragraph (1) (as modified by para14 graph (7)). 

15 ‘‘(6) MARRIED COUPLES MUST FILE JOINT RE16 TURN.—If an individual is married at the close of 

17 the taxable year, the credit shall be allowed under 

18 subsection (a) only if the individual and the individ19 ual’s spouse file a joint return for the taxable year. 

20 ‘‘(7) ADJUSTMENT FOR INFLATION.—In the 

21 case of any taxable year beginning after December 

22 31, 2024, each of the dollar amounts in paragraphs 

23 (1), (2)(A)(ii), and (3)(C)(i) shall be increased by an 

24 amount equal to— 

25 ‘‘(A) such dollar amount, multiplied by 


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1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for the calendar 

3 year in which the taxable year begins, deter4 mined by substituting ‘calendar year 2023’ for 

5 ‘calendar year 2016’ in subparagraph (A)(ii) 

6 thereof. 

7 Any increase determined under the preceding sen8 tence shall be rounded to the next lowest multiple of 

9 $50. 

10 ‘‘(c) DEFINITIONS.—For purposes of this section— 

11 ‘‘(1) FIRST-TIME HOMEBUYER.— 

12 ‘‘(A) IN GENERAL.—The term ‘first-time 

13 homebuyer’ means any individual who acquires 

14 a principal residence located in the United 

15 States by purchase if such individual (and, if 

16 married, such individual’s spouse)— 

17 ‘‘(i) has not claimed any credit or de18 duction under this title for any previous 

19 taxable year with respect to the purchase 

20 or ownership of any residence or residen21 tial real estate (including for any expendi22 tures relating to the placing in service of 

23 any property on, in connection with, or for 

24 use in such a residence or real estate), and 


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1 ‘‘(ii) attests under penalty of perjury 

2 that— 

3 ‘‘(I) the individual (and, if mar4 ried, the individual’s spouse) has not 

5 owned a principal residence at any 

6 time prior to the purchase of the prin7 cipal residence to which this section 

8 applies, and 

9 ‘‘(II) the principal residence to 

10 which this section applies was not ac11 quired from a person related to such 

12 individual or spouse. 

13 ‘‘(B) WAIVER IN CASE OF CERTAIN

14 CHANGES IN STATUS.—The Secretary may, in 

15 such manner as the Secretary may prescribe, 

16 waive the requirements of subparagraph (A) for 

17 a taxable year in the case of an individual who 

18 is not eligible to file a joint return for the tax19 able year, and who was married at the time the 

20 individual or the individual’s former spouse pur21 chased a previous residence. 

22 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin23 cipal residence’ has the same meaning as when used 

24 in section 121. 

25 ‘‘(3) PURCHASE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

2 means any acquisition, but only if— 

3 ‘‘(i) the property is not acquired from 

4 a person related to the person acquiring 

5 such property (or, if either such person is 

6 married, such individual’s spouse), and 

7 ‘‘(ii) the basis of the property in the 

8 hands of the person acquiring such prop9 erty is not determined— 

10 ‘‘(I) in whole or in part by ref11 erence to the adjusted basis of such 

12 property in the hands of the person 

13 from whom acquired, or 

14 ‘‘(II) under section 1014(a). 

15 ‘‘(B) CONSTRUCTION.—A residence which 

16 is constructed by the taxpayer shall be treated 

17 as purchased by the taxpayer on the date the 

18 taxpayer first occupies such residence. 

19 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

20 price’ means the adjusted basis (without regard to 

21 any reduction under section 1016(a)(38)) of the 

22 principal residence on the date such residence is pur23 chased. 

24 ‘‘(5) RELATED PERSONS.—A person shall be 

25 treated as related to another person if the relationVerDate Sep 11 2014 01:32 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00256 Fmt 6652 Sfmt 6201 E:\BILLS\S680.IS S680

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1 ship between such persons would result in the dis2 allowance of losses under section 267 or 707(b) (but, 

3 in applying subsections (b) and (c) of section 267 

4 for purposes of this section, paragraph (4) of section 

5 267(c) shall be treated as providing that the family 

6 of an individual shall include only the individual’s 

7 spouse, ancestors, lineal descendants, and spouse’s 

8 ancestors and lineal descendants). 

9 ‘‘(6) MARITAL STATUS.—An individual’s mar10 ital status shall be determined in accordance with 

11 section 7703. 

12 ‘‘(d) DENIAL AND RECAPTURE RULES IN CASE OF

13 DISPOSAL OF RESIDENCE WITHIN 6 TAXABLE YEARS.— 

14 ‘‘(1) DENIAL OF CREDIT IN CASE OF DISPOSAL

15 WITHIN TAXABLE YEAR.—No credit under sub16 section (a) shall be allowed to any taxpayer for any 

17 taxable year with respect to the purchase of a resi18 dence if the taxpayer disposes of such residence (or 

19 such residence ceases to be the principal residence of 

20 the taxpayer (and, if married, the taxpayer’s 

21 spouse)) before the close of such taxable year. 

22 ‘‘(2) PHASED-OUT RECAPTURE.— 

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

24 subparagraph (D), if the taxpayer disposes of 

25 the residence with respect to which a credit was 


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1 allowed under subsection (a) (or such residence 

2 ceases to be the principal residence of the tax3 payer (and, if married, the taxpayer’s spouse)) 

4 during the 5-taxable-year period beginning with 

5 the taxable year immediately following the cred6 it year, the tax imposed by this chapter for the 

7 taxable year in which such disposal (or ces8 sation) occurs shall be increased by an amount 

9 equal to the recapture percentage of the 

10 amount of the credit so allowed. 

11 ‘‘(B) CREDIT YEAR.—For purposes of sub12 paragraph (A), the term ‘credit year’ means the 

13 taxable year in which the credit under sub14 section (a) was allowed. 

15 ‘‘(C) RECAPTURE PERCENTAGE.—For pur16 poses of subparagraph (A), the recapture per17 centage with respect to any disposal or ces18 sation described in such subparagraph shall be 

19 determined in accordance with the following 

20 table: 

‘‘If the disposal or The recapture 

cessation occurs in: percentage is: 

The 1st taxable year beginning after the credit year ....... 100 percent

The 2nd taxable year beginning after the credit year ...... 80 percent

The 3rd taxable year beginning after the credit year ....... 60 percent

The 4th taxable year beginning after the credit year ....... 40 percent

The 5th taxable year beginning after the credit year ....... 20 percent. 

21 ‘‘(D) EXCEPTIONS.—This paragraph shall 

22 not apply in the case of a disposal or cessation 


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1 described in subparagraph (A) which occurs 

2 after or incident to any of the following: 

3 ‘‘(i) Death of the taxpayer or the tax4 payer’s spouse. 

5 ‘‘(ii) Divorce of the taxpayer. 

6 ‘‘(iii) Involuntary conversion of the 

7 residence (within the meaning of section 

8 121(d)(5)(A)). 

9 ‘‘(iv) Relocation of duty station or 

10 qualified official extended duty (as defined 

11 in section 121(d)(9)(C)) of the taxpayer or 

12 the taxpayer’s spouse who is a member of 

13 the uniformed services (as defined in sec14 tion 121(d)(9)(C)(ii)), a member of the 

15 Foreign Service of the United States (as 

16 defined in section 121(d)(9)(C)(iii)), or an 

17 employee of the intelligence community (as 

18 defined in section 121(d)(9)(C)(iv)). 

19 ‘‘(v) Change of employment of the 

20 taxpayer or the taxpayer’s spouse which 

21 meets the conditions of section 217(c). 

22 ‘‘(vi) Loss of employment, health con23 ditions, or such other unforeseen cir24 cumstances as may be specified by the Sec25 retary. 


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1 ‘‘(e) ADJUSTMENT TO BASIS.—For purposes of this 

2 subtitle, if a credit is allowed under this section with re3 spect to any property, the taxpayer’s basis in such prop4 erty shall be reduced by the amount of the credit so al5 lowed. 

6 ‘‘(f) REPORTING.— 

7 ‘‘(1) IN GENERAL.—A credit shall be allowed 

8 under this section only if the following are included 

9 on the return of tax: 

10 ‘‘(A) The individual’s (and, if married, the 

11 individual’s spouse’s) social security number 

12 issued by the Social Security Administration. 

13 ‘‘(B) The street address (not including a 

14 post office box) of the principal residence pur15 chased. 

16 ‘‘(C) The purchase price of the principal 

17 residence. 

18 ‘‘(D) The date of purchase of the principal 

19 residence. 

20 ‘‘(E) The closing disclosure relating to the 

21 purchase (in the case of a purchase financed by 

22 a mortgage). 

23 ‘‘(2) REPORTING OF REAL ESTATE TRANS24 ACTIONS.—If the Secretary requires information re25 porting under section 6045 by a person described in 


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1 subsection (e)(2) thereof to verify the eligibility of 

2 taxpayers for the credit allowable by this section, the 

3 exception provided by section 6045(e)(5) shall not 

4 apply.’’. 

5 (b) CONFORMING AMENDMENT RELATING TO BASIS

6 ADJUSTMENT.—Subsection (a) of section 1016 of the In7 ternal Revenue Code of 1986, as amended by section 213, 

8 is further amended— 

9 (1) by redesignating paragraphs (38) and (39) 

10 as paragraphs (39) and (40), respectively; and 

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

13 ‘‘(38) to the extent provided in section 36(e).’’. 

14 (c) CONFORMING AMENDMENT.—Section 26(b)(2) of 

15 the Internal Revenue Code of 1986 is amended by striking 

16 subparagraph (W) and by redesignating subparagraphs 

17 (X), (Y), and (Z) as subparagraphs (W), (X), and (Y), 

18 respectively. 

19 (d) CLERICAL AMENDMENT.—The item relating to 

20 section 36 in the table of sections for subpart C of part 

21 IV of subchapter A of chapter 1 of the Internal Revenue 

22 Code of 1986 is amended to read as follows: 

‘‘Sec. 36. First-time homebuyer refundable credit.’’. 

23 (e) AUTHORITY TO TREAT CLAIM OF CREDIT AS

24 ERROR, ETC.—Subparagraph (N) of section 6213(g)(2) of 


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1 the Internal Revenue Code of 1986 is amended to read 

2 as follows: 

3 ‘‘(N) in the case of a return claiming the 

4 credit under section 36— 

5 ‘‘(i) the omission of a social security 

6 number required under section 36(f)(1)(A), 

7 ‘‘(ii) the inclusion of a social security 

8 number so required if— 

9 ‘‘(I) the claim of the credit on 

10 the return reflects the treatment of 

11 such individual as being of an age dif12 ferent from the individual’s age based 

13 on such social security number, or 

14 ‘‘(II) except as provided in sec15 tion 36(c)(1)(B), such social security 

16 number has been included (other than 

17 as a dependent for purposes of section 

18 151) on a return for any previous tax19 able year claiming any credit or de20 duction described in section 

21 36(c)(1)(A)(i), 

22 ‘‘(iii) the omission of any other re23 quired information or documentation de24 scribed in section 36(f)(1), including the 


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1 inclusion of a post office box instead of a 

2 street address for the purchased residence, 

3 ‘‘(iv) the inclusion of any information 

4 or documentation described in clause (iii) 

5 if such information or documentation does 

6 not support a valid claim for the credit, or 

7 ‘‘(v) a claim of such credit for a tax8 able year with respect to the purchase of 

9 a residence made after the last day of such 

10 taxable year,’’. 

11 (f) IRS RECORDKEEPING.—Notwithstanding the lim12 itations on assessment and collection under section 6501 

13 of the Internal Revenue Code of 1986, the Commissioner 

14 of Internal Revenue shall maintain records of returns and 

15 return information (as defined in section 6103(b)(2) of 

16 such Code) of any taxpayer claiming the credit under sec17 tion 36 of such Code (as amended by this section) for the 

18 taxable year in which such credit is claimed and suc19 ceeding taxable years in the individual master files of the 

20 Internal Revenue Service. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2023. 

Æ 


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