II 

117TH CONGRESS 

1ST SESSION S. 2820 

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

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 23, 2021 

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. 

Sec. 2. Findings. 

TITLE I—HOUSING ASSISTANCE 

Subtitle A—General Housing Assistance 


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Sec. 111. Rental vouchers for the homeless. 

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. 

Sec. 128. Covered housing programs. 

TITLE II—REVENUE PROVISIONS 

Sec. 201. Extension of period for rehabilitation expenditures. 

Sec. 202. Extension of basis expenditure deadline. 

Sec. 203. Tax-exempt bond financing requirement. 

Sec. 204. Increases in State allocations. 

Sec. 205. Buildings designated to serve extremely low-income households. 

Sec. 206. Inclusion of Indian areas as difficult development areas for purposes 

of certain buildings. 

Sec. 207. Inclusion of rural areas as difficult development areas. 

Sec. 208. Increase in credit for bond-financed projects designated by housing 

credit agency. 

Sec. 209. Repeal of qualified contract option. 

Sec. 210. Modification and clarification of rights relating to building purchase. 

Sec. 211. Prohibition of local approval and contribution requirements. 

Sec. 212. Adjustment of credit to provide relief during COVID–19 outbreak. 

Sec. 213. Increase in credit for low-income housing supportive services. 

Sec. 214. Study of tax incentives for the conversion of commercial property to 

affordable housing. 

Sec. 215. Renters credit. 

Sec. 216. Middle-income housing tax credit. 

Sec. 217. Neighborhood homes credit. 

Sec. 218. First-time homebuyer refundable credit. 

1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) The United States has a deficit of 

4 7,000,000 units of housing due to slowed develop5 ment after the Great Recession. Public-private partVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 nerships can spark a boost in construction to ad2 dress this lack of available and affordable homes. 

3 (2) During the last 20 years, rent has increased 

4 faster than income for renters in all 50 States and 

5 the District of Columbia. 

6 (3) There is no county in the United States in 

7 which an individual working at minimum wage can 

8 afford a modest 1- or 2-bedroom home. A renter 

9 would need to make more than $20 an hour to af10 ford the average 1-bedroom rent. In no State does 

11 the minimum wage exceed $16 an hour. 

12 (4) Artificial limits on construction and develop13 ment of diverse types of housing limit supply, in14 crease housing prices, and often induce sprawl. 

15 (5) The most affordable and environmentally 

16 friendly types of housing developments are illegal in 

17 many jurisdictions in the United States. Dense, mul18 tifamily housing creates far fewer carbon emissions 

19 than standalone single-family housing. 

20 (6) In 10 States, Housing Choice Voucher re21 cipients wait longer than 3 years for assistance. Na22 tionwide, only 1 in 4 households eligible for housing 

23 assistance receives it. 

24 (7) More than 1,500,000 children in the United 

25 States experienced homelessness in 2018, including 


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1 students staying in other people’s homes due to lack 

2 of alternatives. More than 11,000 children were liv3 ing outside in 2020. Children living in or exiting the 

4 child welfare system are especially vulnerable to 

5 homelessness. 

6 (8) The strongest indicator that a person will 

7 experience homelessness as an adult is if the person 

8 experienced homelessness as a child. Experiencing 

9 homelessness harms children educationally, socially, 

10 emotionally, and physically. 

11 (9) Unsheltered homelessness has increased in 

12 recent years, and Black, Indigenous, and Hispanic 

13 Americans are severely overrepresented in the popu14 lation of people experiencing homelessness. 

15 (10) Extremely low-income renters are much 

16 more likely to be non-White, as 1 in 5 Black renters, 

17 18 percent of Indigenous renters, and 16 percent of 

18 Hispanic renters are extremely low-income, while 

19 only 6 percent of White renters are extremely low20 income. 

21 (11) In 2020, the difference in homeownership 

22 rates between Black and White Americans was larg23 er than in 1960, before the enactment of the Fair 

24 Housing Act (title VIII of Public Law 90–284; 82 

25 Stat. 81), reflecting the pervasive impact of systemic 


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1 racism in the housing market and overall economy 

2 including redlining, appraisal bias, wage gaps, and 

3 decades-long oppression. 

4 (12) Stable, safe, and affordable housing is a 

5 significant social indicator of health, and invest6 ments in affordable housing result in tangible bene7 fits in neighborhood, household, and individual 

8 health and economic stability. 

9 TITLE I—HOUSING ASSISTANCE 

10 Subtitle A—General Housing 

11 Assistance 

12 SEC. 111. RENTAL VOUCHERS FOR THE HOMELESS. 

13 Section 8(o) of the United States Housing Act of 

14 1937 (42 U.S.C. 1437f(o)) is amended by adding at the 

15 end the following: 

16 ‘‘(21) RENTAL VOUCHERS FOR THE HOME17 LESS.— 

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

19 ‘‘(i) AT RISK OF HOMELESSNESS.— 

20 The term ‘at risk of homelessness’ has the 

21 meaning given the term in section 401(1) 

22 of the McKinney-Vento Homeless Assist23 ance Act (42 U.S.C. 11360), except that 

24 ‘50 percent’ shall be substituted for ‘30 


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1 percent’ in subparagraph (A) of that sec2 tion. 

3 ‘‘(ii) CAPACITY-BUILDING PERIOD.— 

4 The term ‘capacity-building period’ means 

5 the 2-year period beginning on the date on 

6 which the formula is established under 

7 subparagraph (E)(ii). 

8 ‘‘(iii) CONTINUUM OF CARE.—The 

9 term ‘continuum of care’ has the meaning 

10 given the term in section 578.3 of title 24, 

11 Code of Federal Regulations, or any suc12 cessor regulation. 

13 ‘‘(iv) ELIGIBLE PUBLIC HOUSING

14 AGENCY.—The term ‘eligible public hous15 ing agency’ means a public housing agency 

16 that— 

17 ‘‘(I) administers assistance under 

18 this subsection through a contract for 

19 annual contributions entered into with 

20 the Secretary; 

21 ‘‘(II) has a partnership with a 

22 public child welfare agency and a con23 tinuum of care that— 

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1 cipients for assistance under this 

2 paragraph from the public hous3 ing agency, including by pro4 viding a written certification that 

5 the eligible recipient is eligible to 

6 receive the assistance; and 

7 ‘‘(bb) will, to the greatest 

8 extent practicable, provide or fa9 cilitate the provision of sup10 portive services to those eligible 

11 recipients; and 

12 ‘‘(III) submits to the Secretary a 

13 statement describing— 

14 ‘‘(aa) how the public hous15 ing agency will connect eligible 

16 recipients with local community 

17 resources, to the extent available; 

18 and 

19 ‘‘(bb) the plan for use of ca20 pacity-building funding under 

21 subparagraph (E), including— 

22 ‘‘(AA) a timeline for 

23 the use of that funding with24 in the capacity-building pe25 riod; 


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1 ‘‘(BB) hiring and per2 sonnel needs; 

3 ‘‘(CC) physical infra4 structure needs; and 

5 ‘‘(DD) technological in6 frastructure needs, including 

7 upgrades to the HMIS, and 

8 any other capacity-related 

9 investments that are nec10 essary to administer assist11 ance under this paragraph. 

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

13 ‘eligible recipient’ means any individual or 

14 family experiencing homelessness or at risk 

15 of homelessness with an income that is less 

16 than 50 percent of the area median in17 come. 

18 ‘‘(vi) EXPERIENCING HOMELESSNESS; 

19 HOMELESS.—The terms ‘experiencing 

20 homelessness’ and ‘homeless’ means an in21 dividual or family who is— 

22 ‘‘(I) living in a place not meant 

23 for human habitation or in an emer24 gency shelter; 


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1 ‘‘(II) living in transitional hous2 ing for homeless persons and was 

3 homeless before entering transitional 

4 housing or an emergency shelter; 

5 ‘‘(III) fleeing domestic violence; 

6 or 

7 ‘‘(IV) at risk of homelessness. 

8 ‘‘(vii) HMIS.—The term ‘HMIS’ 

9 means the community-wide homeless man10 agement information system described in 

11 section 402(f)(3)(D) of the McKinney12 Vento Homeless Assistance Act (42 U.S.C. 

13 11360a(f)(3)(D)). 

14 ‘‘(viii) PUBLIC HOUSING AGENCY.— 

15 The term ‘public housing agency’ includes 

16 a tribally designated housing entity. 

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

18 means an affirmative connection between 

19 the voucher recipient and the organization 

20 providing services to the voucher recipient. 

21 ‘‘(x) SERVICE COORDINATOR.—The 

22 term ‘service coordinator’ means an indi23 vidual employed directly by a public hous24 ing agency who provides general case man25 agement and referral services to each 


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1 voucher recipient served by the public 

2 housing agency, which shall include— 

3 ‘‘(I) an individual intake screen4 ing of each voucher recipient to evalu5 ate the voucher recipient’s need for 

6 supportive services; and 

7 ‘‘(II) referral to outside services, 

8 including cooperation and collabora9 tion with a continuum of care. 

10 ‘‘(xi) SOURCE OF INCOME.—The term 

11 ‘source of income’ means income from any 

12 lawful source, including— 

13 ‘‘(I) income from any legal em14 ployment; and 

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

16 subsidy through any Federal, State, 

17 or local program, whether the pro18 gram is administered by a govern19 mental or nongovernmental entity. 

20 ‘‘(xii) TRIBALLY DESIGNATED HOUS21 ING ENTITY.—The term ‘tribally des22 ignated housing entity’ has the meaning 

23 given the term in section 4 of the Native 

24 American Housing Assistance and Self-De25 termination Act of 1996 (25 U.S.C. 4103). 


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1 ‘‘(xiii) VOUCHER RECIPIENT.—The 

2 term ‘voucher recipient’ means an indi3 vidual or family receiving a voucher under 

4 this paragraph. 

5 ‘‘(xiv) YOUTH.—The term ‘youth’ 

6 means an individual under the age of 25. 

7 ‘‘(B) VOUCHERS.— 

8 ‘‘(i) PROVISION OF VOUCHERS.— 

9 ‘‘(I) IN GENERAL.—The Sec10 retary shall provide vouchers for rent11 al assistance on behalf of each eligible 

12 recipient in accordance with this para13 graph. 

14 ‘‘(II) DIRECT APPROPRIATION.— 

15 Subject to subclause (III), there is ap16 propriated, out of any money in the 

17 Treasury not otherwise appropriated, 

18 for providing rental voucher assistance 

19 under this paragraph for fiscal year 

20 2022 and each fiscal year thereafter— 

21 ‘‘(aa) the amount necessary 

22 to fund the provision of a vouch23 er for rental assistance under 

24 this paragraph on behalf of each 

25 eligible recipient; 


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1 ‘‘(bb) the amount necessary 

2 to provide administrative fees 

3 under clause (ii) in connection to 

4 each voucher for rental assistance 

5 provided under this paragraph; 

6 and 

7 ‘‘(cc) the amount necessary 

8 to fund annual renewals of the 

9 vouchers provided under this 

10 paragraph. 

11 ‘‘(III) NUMBER OF VOUCHERS.— 

12 The Secretary shall provide— 

13 ‘‘(aa) 250,000 vouchers 

14 under this paragraph in fiscal 

15 year 2022; and 

16 ‘‘(bb) 400,000 vouchers 

17 under this paragraph in each fis18 cal year thereafter until the Sec19 retary determines that a smaller 

20 number of vouchers is sufficient 

21 to provide all eligible recipients 

22 with vouchers. 

23 ‘‘(ii) ADMINISTRATIVE FEE FOR AN24 CILLARY COSTS.—The Secretary shall pro25 vide a public housing agency that requests 


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1 a voucher under this paragraph an admin2 istrative fee sufficient to provide assistance 

3 to the voucher recipient for security depos4 its, moving costs, first or last month’s 

5 rent, or other significant barriers to estab6 lishing use of the voucher and a lease, in 

7 an amount that is not more than 3 

8 months’ rent for the voucher recipient. 

9 ‘‘(iii) PAYMENT STANDARD.—The 

10 payment standard for a voucher provided 

11 under this paragraph may not exceed 125 

12 percent of the fair market rental in the ju13 risdiction in which the voucher is adminis14 tered. 

15 ‘‘(iv) SUPPLEMENTAL VOUCHER PAY16 MENT.— 

17 ‘‘(I) IN GENERAL.—An eligible 

18 public housing agency may supple19 ment the amount of a voucher pro20 vided under this paragraph in any 

21 case in which— 

22 ‘‘(aa) the amount of the 

23 voucher is insufficient to cover 

24 the cost of a dwelling unit within 

25 the jurisdiction of the eligible 


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1 public housing agency and that 

2 insufficiency may result in a 

3 voucher recipient losing housing 

4 and becoming homeless or dou5 bled up; or 

6 ‘‘(bb) the eligible public 

7 housing agency submits to the 

8 Secretary a waiver request for re9 calculation of the small area fair 

10 market rent applicable to the 

11 dwelling unit, which the Sec12 retary shall approve or deny 

13 within 45 days of submission of 

14 the request. 

15 ‘‘(II) PAYMENT UPON DENIAL.— 

16 An eligible public housing agency may 

17 supplement the amount of a voucher 

18 under subclause (I) even if the Sec19 retary denies the request submitted 

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

21 the supplementation of the voucher 

22 amount is necessary to maintain hous23 ing for the voucher recipient. 


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1 ‘‘(v) CONDITIONS ON ASSISTANCE.— 

2 Notwithstanding any other provision of 

3 law, the Secretary— 

4 ‘‘(I) may not condition receipt of 

5 a voucher under this paragraph on— 

6 ‘‘(aa) participation in any 

7 service or program; or 

8 ‘‘(bb) the sobriety or lack 

9 thereof of an eligible recipient; 

10 ‘‘(II) except as provided in sub11 clause (III), may not prohibit receipt 

12 of a voucher under this paragraph by 

13 an otherwise eligible recipient due to 

14 any criminal conviction or history of 

15 interaction with the criminal justice 

16 system; and 

17 ‘‘(III) shall prohibit receipt of a 

18 voucher under this paragraph by indi19 viduals subject to a lifetime registra20 tion requirement under any State sex 

21 offender registration program. 

22 ‘‘(vi) VERIFICATION OF STATEMENT

23 MADE BY ELIGIBLE PUBLIC HOUSING

24 AGENCIES.— 


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1 ‘‘(I) IN GENERAL.—Not later 

2 than 30 days after the date on which 

3 an eligible public housing agency sub4 mits the statement required under 

5 subparagraph (A)(iv)(III), the Sec6 retary shall verify the statement. 

7 ‘‘(II) UNSATISFACTORY STATE8 MENT.—If, upon verification of a 

9 statement under subclause (I), the 

10 Secretary determines that the state11 ment is unsatisfactory, the Secretary 

12 shall inform the eligible public hous13 ing agency of that determination and 

14 the manner in which the eligible pub15 lic housing agency may re-submit the 

16 statement. 

17 ‘‘(vii) IDENTIFICATION OF ELIGIBLE

18 RECIPIENTS.—A public housing agency 

19 shall partner with continuums of care, 

20 public child welfare agencies, street out21 reach providers, health care providers, and 

22 other similar organizations in the State in 

23 which the public housing agency operates 

24 to identify eligible recipients. 


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1 ‘‘(viii) REQUIREMENTS FOR ELIGIBLE

2 PUBLIC HOUSING AGENCIES.— 

3 ‘‘(I) IN GENERAL.—Each eligible 

4 public housing agency providing as5 sistance under this paragraph shall— 

6 ‘‘(aa) on an annual basis 

7 and in conjunction with income 

8 reviews for purposes of deter9 mining income eligibility for as10 sistance under this paragraph, 

11 verify the compliance of the eligi12 ble public housing agency with 

13 the eligibility requirements under 

14 this paragraph; 

15 ‘‘(bb) to the greatest extent 

16 possible— 

17 ‘‘(AA) work with con18 tinuums of care to ensure 

19 continuity of data collection 

20 under this paragraph; and 

21 ‘‘(BB) utilize the HMIS 

22 to collect and main the in23 formation required to be col24 lected under this paragraph. 


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1 ‘‘(II) PRIORITY.—In providing 

2 vouchers under this paragraph, an eli3 gible public housing agency— 

4 ‘‘(aa) shall prioritize the 

5 first vouchers made available 

6 under this section for eligible re7 cipients who are— 

8 ‘‘(AA) unaccompanied 

9 homeless youth; 

10 ‘‘(BB) homeless youth 

11 with minor children; or 

12 ‘‘(CC) families with 

13 minor children experiencing 

14 homelessness; 

15 ‘‘(bb) to the extent possible 

16 considering when the Secretary 

17 disburses funds under this para18 graph, shall provide vouchers to 

19 the eligible recipients described in 

20 item (aa) not later than 1 year 

21 after the end of the capacity22 building period; and 

23 ‘‘(cc) may not issue vouchers 

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1 gible public housing agency has 

2 issued vouchers to all eligible re3 cipients described in that item. 

4 ‘‘(ix) USE OF VOUCHER UPON EXIT.— 

5 An eligible public housing agency that 

6 issued a voucher to an eligible recipient 

7 that is no longer in use by the eligible re8 cipient may provide the voucher to any 

9 other tenant eligible for tenant-based as10 sistance under this subsection. 

11 ‘‘(C) DATA COLLECTION.— 

12 ‘‘(i) IN GENERAL.—The Secretary 

13 shall submit to Congress an annual report 

14 on assistance providing under this para15 graph, which shall include— 

16 ‘‘(I) an assessment of the 

17 progress of States toward housing— 

18 ‘‘(aa) eligible recipients in 

19 the State; and 

20 ‘‘(bb) the total population of 

21 people experiencing homelessness 

22 in the State; and 

23 ‘‘(II) the information provided 

24 under clause (ii). 


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1 ‘‘(ii) INFORMATION FROM PUBLIC

2 HOUSING AGENCIES.—Each eligible public 

3 housing agency administering assistance 

4 under this paragraph shall submit to the 

5 Secretary and to the State in which the 

6 public housing agency is located an annual 

7 report for each fiscal year that includes— 

8 ‘‘(I) the number of voucher re9 cipients, including aggregated demo10 graphic information on the age, sex, 

11 gender identity, sexual orientation, 

12 race, ethnicity, and disability status of 

13 each such recipient in a manner that 

14 does not reveal the personally identifi15 able information of each such recipi16 ent; 

17 ‘‘(II) the number of eligible re18 cipients who applied during the fiscal 

19 year for assistance under this para20 graph, but were not provided assist21 ance; 

22 ‘‘(III) a brief identification in 

23 each instance described in subclause 

24 (II) of the reason why the eligible 


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1 public housing agency was unable to 

2 provide the assistance; and 

3 ‘‘(IV) a description of how the el4 igible public housing agency commu5 nicated or collaborated with public 

6 child welfare agencies and continuums 

7 of care to collect the data described in 

8 subclauses (I) and (II). 

9 ‘‘(D) SUPPORTIVE SERVICES.— 

10 ‘‘(i) ADMINISTRATIVE FEE.— 

11 ‘‘(I) IN GENERAL.—The Sec12 retary shall establish a fee under sub13 section (q) for the costs incurred by 

14 public housing agencies in admin15 istering vouchers under this para16 graph. 

17 ‘‘(II) COSTS.—In establishing the 

18 fee described in subclause (I), the Sec19 retary shall include the costs to public 

20 housing agencies of employing full21 time or full-time-equivalent service co22 ordinators. 

23 ‘‘(III) AUTHORIZATION OF AP24 PROPRIATIONS.—There is authorized 

25 to be appropriated $300,000,000 for 


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1 each of fiscal years 2022 through 

2 2027 for the fee described in sub3 clause (I). 

4 ‘‘(ii) HIRING OF SERVICE COORDINA5 TORS.— 

6 ‘‘(I) IN GENERAL.—An eligible 

7 public housing agency shall hire the 

8 appropriate number of service coordi9 nators to administer supportive serv10 ices under this paragraph in partner11 ship with the public child welfare 

12 agency or continuum of care in a ju13 risdiction. 

14 ‘‘(II) INSUFFICIENT FUNDS.—If 

15 an eligible public housing agency is 

16 unable to hire an appropriate number 

17 of service coordinators under sub18 clause (I) using the fee described in 

19 clause (i)(I)— 

20 ‘‘(aa) the public housing 

21 agency may request an increased 

22 administrative fee from the Sec23 retary; and 


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1 ‘‘(bb) the Secretary shall ap2 prove or deny a request received 

3 under item (aa) within 45 days. 

4 ‘‘(III) REPORT TO CONGRESS.— 

5 Beginning in the first full fiscal year 

6 after the date of enactment of this 

7 paragraph, the Secretary shall submit 

8 an annual report to Congress on re9 quests for increased administrative 

10 fees received from public housing 

11 agencies under subclause (II). 

12 ‘‘(IV) APPROPRIATE NUMBER

13 DEFINED.—For purposes of this 

14 clause, the term ‘appropriate number’, 

15 with respect to service coordinators, 

16 means enough service coordinators so 

17 that each household provided a vouch18 er by a public housing agency under 

19 this paragraph is able to access a 

20 service coordinator for not less than 

21 30 minutes each week. 

22 ‘‘(iii) PROVISION OF SERVICES.— 

23 Upon intake of an eligible recipient, a pub24 lic housing agency or a public child welfare 

25 agency or continuum of care with which 


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1 the public housing agency has partnered 

2 shall— 

3 ‘‘(I) assign the voucher recipient 

4 a case manager or service coordinator; 

5 and 

6 ‘‘(II) provide or secure the provi7 sion of supportive services to con8 tribute to the housing stability of the 

9 voucher recipient, including— 

10 ‘‘(aa) any supportive service, 

11 as defined in section 401 of the 

12 McKinney-Vento Homeless As13 sistance Act (42 U.S.C. 11360); 

14 ‘‘(bb) referrals to health 

15 care providers, including mental 

16 health care providers, dental 

17 health care providers, and vision 

18 health care providers; 

19 ‘‘(cc) referrals to substance 

20 use disorder treatment, including 

21 recovery, treatment, 12-step pro22 grams, relapse prevention, or 

23 medication-assisted treatment; 

24 ‘‘(dd) assistance relating to 

25 enrollment in the Medicare or 


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1 Medicaid programs under titles 

2 XVIII and XIX of the Social Se3 curity Act (42 U.S.C. 1395 et 

4 seq., 1396 et seq.), respectively, 

5 and referrals to other services, 

6 including— 

7 ‘‘(AA) the supplemental 

8 nutrition assistance program 

9 under the Food and Nutri10 tion Act of 2008 (7 U.S.C. 

11 2011 et seq.) (commonly 

12 known as the ‘SNAP Pro13 gram’); and 

14 ‘‘(BB) the program of 

15 block grants for States for 

16 temporary assistance for 

17 needy families established 

18 under part A of title IV of 

19 the Social Security Act (42 

20 U.S.C. 601 et seq.) (com21 monly known as the ‘TANF 

22 Program’); 

23 ‘‘(ee) advising on eligibility 

24 for the family self-sufficiency 

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1 seling, and housing counseling 

2 programs; 

3 ‘‘(ff) referrals to education 

4 services, including general edu5 cational development (commonly 

6 known as ‘GED’) preparation 

7 and testing, enrollment in post8 secondary education programs, 

9 and credit recovery; and 

10 ‘‘(gg) facilitation of trans11 portation assistance to any of the 

12 supportive services described in 

13 this subparagraph. 

14 ‘‘(iv) ELIGIBILITY OF PRIVATE NON15 PROFIT ORGANIZATIONS AND FAITH-BASED

16 ORGANIZATIONS.— 

17 ‘‘(I) DEFINITIONS.—In this 

18 clause, the terms ‘eligible entity’ and 

19 ‘private nonprofit organization’ have 

20 the meanings given those terms in 

21 section 401 of the McKinney-Vento 

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

23 11360). 

24 ‘‘(II) ELIGIBILITY.—Notwith25 standing any other provision of law— 


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1 ‘‘(aa) the Secretary shall 

2 provide that private nonprofit or3 ganizations that are eligible enti4 ties, including faith-based private 

5 nonprofit organizations that are 

6 eligible entities, shall be eligible 

7 to— 

8 ‘‘(AA) provide services 

9 described in clause (iii); and 

10 ‘‘(BB) receive amounts 

11 made available to carry out 

12 clause (iii); and 

13 ‘‘(bb) in determining eligi14 bility for amounts made available 

15 to carry out clause (iii), the sta16 tus of an entity as faith-based or 

17 the possibility that an entity may 

18 be faith-based may not be a basis 

19 for any discrimination against 

20 such entity in any manner or for 

21 any purpose. 

22 ‘‘(v) ACCESS.—Services provided 

23 under this subparagraph shall be available 

24 to voucher recipients with low-to-no barrier 

25 access. 


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1 ‘‘(vi) EVALUATION.—An eligible pub2 lic housing agency, public child welfare 

3 agency, or continuum of care described in 

4 clause (iii) shall evaluate each voucher re5 cipient for individual case management 

6 needs under this subparagraph. 

7 ‘‘(E) CAPACITY BUILDING.— 

8 ‘‘(i) AUTHORIZATION OF APPROPRIA9 TIONS.—There is authorized to be appro10 priated to the Secretary $500,000,000 for 

11 each of fiscal years 2022 and 2023 to pro12 vide funding for capacity building to eligi13 ble public housing agencies. 

14 ‘‘(ii) FUNDING FORMULA.—Not later 

15 than 45 days after the date of enactment 

16 of this paragraph, the Secretary shall es17 tablish a formula for allocating the funding 

18 authorized under clause (i) that takes into 

19 account— 

20 ‘‘(I) the ratio of individuals in 

21 the State in which the eligible public 

22 housing agency operates who are 

23 homeless to the overall population of 

24 the State; 


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1 ‘‘(II) the proportion of families in 

2 each State with children experiencing 

3 unsheltered homelessness, as reported 

4 in the State’s most recent point-in5 time count, to the total number of 

6 unsheltered homeless families in the 

7 State as reported in the same point8 in-time count; and 

9 ‘‘(III) the rate of unsheltered 

10 homelessness in each State compared 

11 to each other State, as reported in 

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

13 count. 

14 ‘‘(iii) DISBURSEMENT.—Not later 

15 than 30 days after an eligible public hous16 ing agency submits an acceptable state17 ment under subparagraph (A)(iv)(III), the 

18 Secretary shall disburse amounts author19 ized under clause (i) of this subparagraph 

20 in accordance with the formula established 

21 under clause (ii) of this subparagraph. 

22 ‘‘(iv) MINIMUM AND MAXIMUM ALLO23 CATION.—The Secretary shall ensure 

24 that— 


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1 ‘‘(I) each eligible public housing 

2 agency does not receive more than 10 

3 percent of the amount authorized 

4 under clause (i); and 

5 ‘‘(II) each State in which an eli6 gible public housing agency receives 

7 funds under clause (i) does not receive 

8 more than 25 percent of the total 

9 amount authorized under that clause. 

10 ‘‘(v) ELIGIBLE ACTIVITIES.—A recipi11 ent of funds authorized under clause (i) 

12 may only use the funds for— 

13 ‘‘(I) hiring and personnel needs, 

14 such as case managers and housing 

15 placement advisory; 

16 ‘‘(II) physical infrastructure— 

17 ‘‘(aa) including increased of18 fice space or facilities for the pro19 vision of supportive services; and 

20 ‘‘(bb) not including residen21 tial housing; 

22 ‘‘(III) technological infrastruc23 ture needs, including upgrades to the 

24 HMIS; and 


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1 ‘‘(IV) any other capacity-related 

2 investments that are necessary for the 

3 public housing agency to— 

4 ‘‘(aa) develop, acquire, or re5 habilitate housing that is afford6 able to extremely low-income 

7 families, to be made available to 

8 people experiencing homelessness; 

9 or 

10 ‘‘(bb) support the successful 

11 administration of the vouchers 

12 under this paragraph. 

13 ‘‘(vi) REQUIREMENT FOR EXPENDI14 TURE OF FUNDS.—Each eligible public 

15 housing agency that receives funds under 

16 clause (i) shall expend not less than 60 

17 percent of the funding during the 2-year 

18 period following receipt of the funding. 

19 ‘‘(F) STATE ACCOUNTABILITY.— 

20 ‘‘(i) IN GENERAL.—Each eligible pub21 lic housing agency providing assistance 

22 under this paragraph shall— 

23 ‘‘(I) on a monthly basis, report 

24 caseload and voucher administration 


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1 statistics to the State in which the 

2 agency operates; and 

3 ‘‘(II) twice annually, submit to 

4 the State in which the agency oper5 ates a report on the progress toward 

6 issuing a voucher under this para7 graph to all eligible recipients, based 

8 on— 

9 ‘‘(aa) the percentage reduc10 tion in the number of families 

11 with children and youth that are 

12 experiencing homelessness in the 

13 area in which the agency care op14 erates, as determined by com15 paring the most recent point-in16 time count with the point-in-time 

17 count conducted 1 year prior; 

18 and 

19 ‘‘(bb) the percentage reduc20 tion in the number of children 

21 experiencing homelessness in the 

22 State, as documented under the 

23 requirements of the program au24 thorized under subtitle B of title 

25 VII of the McKinney-Vento 


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1 Homeless Assistance Act (42 

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

3 ‘‘(ii) BENCHMARKS.—Each year, each 

4 State shall meet the benchmarks described 

5 in this clause, based equally on the per6 centage reduction in reported population of 

7 children and families experiencing home8 lessness in the following year’s point-in9 time count and the percentage reduction in 

10 population of students experiencing home11 lessness: 

12 ‘‘(I) ANNUAL REPORT.—Each 

13 State shall submit an annual report to 

14 the Secretary that contains— 

15 ‘‘(aa) data collected from 

16 schools pursuant to the program 

17 authorized under subtitle B of 

18 title VII of the McKinney-Vento 

19 Homeless Assistance Act (42 

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

21 the number of students— 

22 ‘‘(AA) experiencing 

23 unsheltered homelessness; 

24 ‘‘(BB) living in shel25 ters; 


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1 ‘‘(CC) living in motels, 

2 hotels, or campgrounds; 

3 ‘‘(DD) living in a car or 

4 other motor vehicle; or 

5 ‘‘(EE) sharing the 

6 housing of other persons due 

7 to loss of housing, economic 

8 hardship, or similar rea9 soning; and 

10 ‘‘(bb) the information re11 ceived from each public housing 

12 agency in the State under clause 

13 (i)(II). 

14 ‘‘(II) ISSUANCE OF VOUCHERS

15 FOR SMALLER STATES.—Each State 

16 with a rate of homelessness that is 

17 not 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 50 percent of the 

25 population of people experiVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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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 70 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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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) ISSUANCE OF VOUCHERS

8 FOR LARGER STATES.—Each State 

9 with a rate of homelessness that is 

10 higher than 10 people per 10,000 

11 shall— 

12 ‘‘(aa) not later than 2 years 

13 after the end of the capacity14 building period— 

15 ‘‘(AA) issue vouchers 

16 under this paragraph to not 

17 less than 40 percent of the 

18 population of people experi19 encing homelessness in the 

20 State, using data from the 

21 most recent point-in-time 

22 count; and 

23 ‘‘(BB) to the greatest 

24 extent possible, prioritize the 

25 issuance of those vouchers 


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1 to eligible youth and fami2 lies; 

3 ‘‘(bb) not later than 3 years 

4 after the end of the capacity5 building period— 

6 ‘‘(AA) issue vouchers 

7 under this paragraph to not 

8 less than 60 percent of the 

9 population of people experi10 encing homelessness in the 

11 State, using data from the 

12 most recent point-in-time 

13 count; and 

14 ‘‘(BB) to the greatest 

15 extent possible, prioritize the 

16 issuance of those vouchers 

17 to eligible youth and fami18 lies; and 

19 ‘‘(cc) not later than 4 years 

20 after the end of the capacity21 building period, issue vouchers 

22 under this paragraph to all peo23 ple experiencing homelessness in 

24 the State. 

25 ‘‘(iii) PENALTIES.— 


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1 ‘‘(I) WARNING.—Except as pro2 vided in clause (v), if a State does not 

3 meet the applicable benchmarks de4 scribed in clause (ii), the Secretary 

5 shall publicly warn the State of the 

6 failure of the State to meet the bench7 mark and remind the State of the ap8 plicable penalties. 

9 ‘‘(II) REDUCTION IN FEDERAL

10 HIGHWAY FUNDS.—If a State does 

11 not meet the applicable benchmarks 

12 described in clause (ii)— 

13 ‘‘(aa) by the date that is 

14 180 days after the warning by 

15 the Secretary under subclause (I) 

16 of this clause, the Federal share 

17 payable for Federal-aid highway 

18 projects under section 120 of 

19 title 23, United States Code, 

20 shall be reduced by 5 percent; or 

21 ‘‘(bb) by the date that is 

22 180 days after a reduction made 

23 under item (aa) of this subclause, 

24 the Federal share payable for 

25 Federal-aid highway projects 


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1 under section 120 of title 23, 

2 United States Code, shall be fur3 ther reduced by 5 percent. 

4 ‘‘(iv) CONDITION ON COMPLIANCE.— 

5 Beginning in the first Notice of Funding 

6 Availability cycle beginning after the date 

7 of enactment of this paragraph, and every 

8 Notice of Funding Availability cycle there9 after, the Secretary shall condition the 

10 awarding of all funding for vouchers under 

11 this paragraph by the Secretary to a public 

12 housing authority in a State on that 

13 State’s compliance with the benchmarks 

14 described in clause (ii). 

15 ‘‘(v) UNEMPLOYMENT RATE.—If the 

16 quarterly unemployment rate of the popu17 lation of a State is not less than 6 per18 cent— 

19 ‘‘(I) the State shall not be penal20 ized under clause (iii) for failure to 

21 meet the benchmarks described in 

22 clause (ii); and 

23 ‘‘(II) the State shall be required 

24 to meet the benchmarks described in 

25 clause (ii) not later than 180 days 


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1 after the date on which the quarterly 

2 unemployment rate descends beneath 

3 6 percent. 

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

5 ‘‘(i) AUTHORIZATION OF APPROPRIA6 TIONS.—There is authorized to be appro7 priated $15,000,000 for each of fiscal 

8 years 2022 through 2026 to the Secretary 

9 for the administrative needs of the Depart10 ment of Housing and Urban Development 

11 and regional offices of the Department in 

12 carrying out the voucher program under 

13 this paragraph. 

14 ‘‘(ii) PROHIBITION.—None of the 

15 funds made available under this subpara16 graph may be used to provide raises or bo17 nuses to any employee of the Department 

18 of Housing and Urban Development in an 

19 amount that is more than 10 percent of 

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

21 SEC. 112. LAND ACQUISITION AND CONSTRUCTION. 

22 (a) DEFINITIONS.—In this section— 

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

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

25 McKinney-Vento Homeless Assistance Act (42 


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

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

3 that section; 

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

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

6 terms in section 1303 of the Federal Housing Enter7 prises Financial Safety and Soundness Act of 1992 

8 (12 U.S.C. 4502); 

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

10 family who is— 

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

12 habitation or in an emergency shelter; 

13 (B) living in transitional housing for home14 less persons and was homeless before entering 

15 transitional housing or an emergency shelter; 

16 (C) fleeing domestic violence; or 

17 (D) at risk of homelessness; and 

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

19 of Housing and Urban Development. 

20 (b) AUTHORIZATIONS OF APPROPRIATIONS.— 

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

22 appropriated to the Housing Trust Fund established 

23 under section 1338 of the Federal Housing Enter24 prises Financial Safety and Soundness Act of 1992 

25 (12 U.S.C. 4568) $10,000,000,000 for each of fiscal 


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1 years 2022 through 2032 for allocation to States in 

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

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

4 (2) ADMINISTRATIVE NEEDS OF STATES.— 

5 (A) AUTHORIZATION OF APPROPRIA6 TIONS.—There is authorized to be appropriated 

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

8 years 2022 through 2027 for the administrative 

9 needs of States under this section, in accord10 ance with subparagraph (C). 

11 (B) ALLOCATION.—Of amounts authorized 

12 to be appropriated under subparagraph (A) for 

13 each fiscal year— 

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

15 the Commonwealth of the Northern Mar16 iana Islands, Guam, American Samoa, and 

17 the Virgin Islands; and 

18 (ii) the remainder shall be allocated to 

19 States pursuant to the formula established 

20 under paragraph (21)(E)(ii) of section 8(o) 

21 of the United States Housing Act of 1937 

22 (42 U.S.C. 1437f(o)), as added by section 

23 3 of this Act. 

24 (C) ELIGIBLE ACTIVITIES.—A State that 

25 receives funds authorized to be appropriated 


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1 under subparagraph (A) may only use the funds 

2 for capacity-related investments that are nec3 essary for the State to successfully allocate 

4 funds made available under paragraph (1) of 

5 this subsection. 

6 (D) PROHIBITION.—None of the funds 

7 made available under this paragraph may be 

8 used to provide raises or bonuses to any official 

9 of the executive branch of a State. 

10 (c) REVISION OF FUNDING FORMULA.— 

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

12 the date of enactment of this Act, the Secretary 

13 shall report to Congress proposed changes to the 

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

15 Federal Housing Enterprises Financial Safety and 

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

17 order to ensure that the funding formula takes into 

18 account the economic status of the people of the 

19 United States, including the economic impact of the 

20 COVID–19 pandemic. 

21 (2) CONTENTS.—The revised formula proposed 

22 under paragraph (1) shall address the following con23 cerns: 

24 (A) The COVID–19 pandemic and its im25 pacts on the economic security and housing staVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 bility of very low-income and extremely low-in2 come people of the United States. 

3 (B) The impacts of differing vacancy rates 

4 across various housing markets in the United 

5 States. 

6 (C) The rate of unsheltered homelessness 

7 in various housing markets across the United 

8 States. 

9 (D) The impact of differing rates of pov10 erty and extreme poverty across various States. 

11 (E) The gap between demand for and sup12 ply of rental units that are affordable and avail13 able to very low-income and extremely low-in14 come renters in a State. 

15 (d) ELIGIBLE HOUSEHOLDS.—Housing that is as16 sisted using amounts made available under subsection (b) 

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

18 extremely low-income households. 

19 (e) ELIGIBLE ACTIVITIES.—A recipient of funds au20 thorized under subsection (b)— 

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

22 and the acquisition, rehabilitation, or development of 

23 rental housing that is affordable for very low-income 

24 or extremely low-income households; and 


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1 (2) shall take all possible measures to expedite 

2 construction of housing described in paragraph (1). 

3 (f) PRIORITY FOR OCCUPANCY IN DWELLING

4 UNITS.— 

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

6 fiscal years for which amounts are made available to 

7 carry out this section, the Secretary shall ensure 

8 that priority for occupancy in a dwelling unit that 

9 receives assistance under this section is given to a 

10 homeless family or homeless youth. 

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

12 third, fourth, and fifth fiscal years for which 

13 amounts are made available to carry out this section, 

14 the Secretary shall ensure that priority for occu15 pancy in a dwelling unit that receives assistance 

16 under this section is given to a homeless family or 

17 homeless individual. 

18 SEC. 113. MODULAR CONSTRUCTION PILOT PROGRAM. 

19 (a) DEFINITIONS.—In this section: 

20 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti21 ty’’ means a public housing agency, a tribally des22 ignated housing entity (as defined in section 4 of the 

23 Native American Housing Assistance and Self De24 termination Act of 1996 (25 U.S.C. 4103)), a nonVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 profit entity, a company, a religious entity, or a unit 

2 of local or Tribal government. 

3 (2) MODULAR CONSTRUCTION.—The term 

4 ‘‘modular construction’’ means the method of resi5 dential construction by which building modules are 

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

7 brought together on the building site to form a larg8 er residential building, in an effort to reduce con9 struction costs. 

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

11 the Secretary of Housing and Urban Development. 

12 (b) ESTABLISHMENT OF PROGRAM.— 

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

14 a pilot program to provide grants to eligible entities 

15 to promote the construction of affordable housing 

16 using modular construction. 

17 (2) AFFORDABILITY REQUIREMENT.—To be eli18 gible to receive a grant under paragraph (1), an eli19 gible entity shall be required to guarantee afford20 ability for a period of more than 20 years. 

21 (3) PRIORITY.—In awarding grants under para22 graph (1), the Secretary shall give priority to an eli23 gible entity that fulfills not fewer than two of the 

24 following requirements: 

25 (A) The eligible entity— 


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1 (i) will construct the housing in 

2 groups of more than 50 units; or 

3 (ii) provides confirmation from the ju4 risdiction with land use control over the 

5 site proposed by the eligible entity that— 

6 (I) construction will be completed 

7 within 18 months; and 

8 (II) the housing will be con9 structed in groups of more than 30 

10 units. 

11 (B) The eligible entity partners with a 

12 public housing agency or unit of local govern13 ment that will issue rental assistance to resi14 dents of the affordable housing through vouch15 ers or grants. 

16 (C) The eligible entity will provide sup17 portive services (as described in paragraph 

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

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

20 1437f(o)), as added by section 3 of this Act) to 

21 residents at no charge, or has secured the pro22 vision of publicly or privately administered sup23 portive services (as so defined) to residents at 

24 no charge. 


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1 (c) MATCHING REQUIREMENT.—The Federal share 

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

3 than 75 percent of the cost of the project. 

4 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

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

6 for each of fiscal years 2022 through 2027 to carry out 

7 this section. 

8 SEC. 114. SUPPORTING PRO-HOUSING DEVELOPMENT. 

9 (a) DEFINITIONS.—In this section: 

10 (1) DUPLEX.—The term ‘‘duplex’’ means a res11 idential building divided into 2 units, each of which 

12 has a separate entrance. 

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

14 activity’’ means an activity authorized under section 

15 105(a) of the Housing and Community Development 

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

17 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti18 ty’’ means a jurisdiction that adopts a zoning and 

19 community planning method described in subsection 

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

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

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

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

24 on which the building is located. 


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

2 has the meaning given the term in section 91.5 of 

3 title 24, Code of Federal Regulations, or any suc4 cessor regulation. 

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

6 the meaning given the term in section 1303 of the 

7 Federal Housing Enterprises Financial Safety and 

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

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

10 use housing’’ means a building with— 

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

12 or nonprofit establishments at the ground level 

13 or a lower level; and 

14 (B) not less than 1 story of residential 

15 units above the establishments described in sub16 paragraph (A). 

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

18 residential building divided into 4 units, each of 

19 which has a separate entrance. 

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

21 the Secretary of Housing and Urban Development. 

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

23 residential building divided into 3 units, each of 

24 which has a separate entrance. 


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1 (11) MULTIFAMILY HOUSING.—The term ‘‘mul2 tifamily housing’’— 

3 (A) means housing accommodations that— 

4 (i) are designed principally for resi5 dential use; 

6 (ii) conform to standards satisfactory 

7 to the Secretary; and 

8 (iii) consist of not less than 5 rental 

9 units on a site; and 

10 (B) includes units that are detached, 

11 semidetached, row house, or multifamily struc12 tures. 

13 (b) ZONING INFORMATION REPORTING REQUIRE14 MENT.— 

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

16 a jurisdiction that receives, directly or indirectly, any 

17 funding from the Secretary to submit to the Sec18 retary a report containing information about the 

19 zoning and community planning methods of the ju20 risdiction, unless the jurisdiction already reports 

21 such information. 

22 (2) ADDITIONAL INFORMATION.—Upon receiv23 ing a report described in paragraph (1) from a juris24 diction, the Secretary may request additional infor25 mation, at the discretion of the Secretary. 


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1 (c) PROHIBITED ZONING METHODS.— 

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

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

4 a jurisdiction that uses a zoning and community 

5 planning method described in paragraph (2) may not 

6 receive, directly or indirectly, amounts from a grant 

7 awarded under subsection (d). 

8 (2) PROHIBITED METHODS.—The methods re9 ferred to in paragraph (1) are the following: 

10 (A) Prohibiting or discouraging duplexes in 

11 areas zoned for single-family homes. 

12 (B) Prohibiting or discouraging single13 room occupancy development in areas zoned for 

14 multifamily homes. 

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

16 multimodal transit stop, maintaining require17 ments of more than 1 parking spot for a resi18 dent’s car per residential unit. 

19 (D) Prohibiting or discouraging accessory 

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

21 or ‘‘granny flat’’) on the premises of single-fam22 ily homes. 

23 (E) Prohibiting or discouraging the conver24 sion of commercial property into residential 

25 property. 


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1 (F) Prohibiting or discouraging the devel2 opment of multifamily housing or mixed-use 

3 housing in commercial areas. 

4 (3) EXCEPTION.—A jurisdiction shall not be pe5 nalized under paragraph (1) based on the use of a 

6 zoning and community planning method described in 

7 paragraph (2) over which the jurisdiction does not 

8 have control. 

9 (d) GRANT PROGRAM.— 

10 (1) ESTABLISHMENT.—The Secretary shall es11 tablish a program under which the Secretary awards 

12 competitive grants to eligible entities to use for eligi13 ble activities. 

14 (2) PRIORITY.—In awarding grants under para15 graph (1), the Secretary— 

16 (A) shall give priority to an eligible entity 

17 that adopt more than one of the zoning and 

18 community planning methods described in para19 graph (4); and 

20 (B) in giving priority to an eligible entity 

21 under subparagraph (A) of this paragraph, 

22 shall base the degree of priority given on the 

23 number of such methods that the eligible entity 

24 has adopted, relative to the number of such 


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1 methods that each other eligible entity has 

2 adopted. 

3 (3) AMOUNT OF GRANT.— 

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

5 awarded to an eligible entity under paragraph 

6 (1) shall be not less than— 

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

8 with a population of less than 80,000; 

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

10 with a population of less than 100,000; 

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

12 with a population of less than 500,000; 

13 (iv) $100,000,000 for an eligible enti14 ty with a population of less than 

15 1,000,000; and 

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

17 with a population of not less than 

18 1,000,000. 

19 (B) POPULATION CALCULATION.—The 

20 Secretary shall calculate the population of an 

21 eligible entity for purposes of subparagraph (A) 

22 using the most recently available data from the 

23 Bureau of the Census. 

24 (4) ENCOURAGED ZONING AND COMMUNITY

25 PLANNING METHODS.—The zoning and community 


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1 planning methods described in this paragraph are 

2 the following: 

3 (A) Allowing— 

4 (i) duplexes, triplexes, and quadplexes, 

5 or other multifamily housing, in areas 

6 zoned for single-family homes; 

7 (ii) the subdivision of existing single8 family homes into multiple units; and 

9 (iii) waivers to permitting or zoning 

10 requirements to incentivize the construc11 tion of— 

12 (I) accessory dwelling units; 

13 (II) additions to existing single14 family homes to create duplexes, 

15 triplexes, or quadplexes; or 

16 (III) other additions that do not 

17 require demolition of an existing home 

18 on a given unit of land. 

19 (B) Incentivizing the development of sin20 gle-room occupancy multifamily housing and ac21 cessory dwelling units through expedited per22 mitting, reduced fees, or other incentives. 

23 (C) Not imposing a minimum lot size or 

24 minimum unit square-foot requirements. 


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1 (D) Incentivizing the development of com2 mercial property into residential housing. 

3 (E) Eliminating or lowering requirements 

4 for per-unit parking spots. 

5 (F) Allowing increased floor area ratios. 

6 (G) Eliminating or raising height limits on 

7 development to encourage building vertically 

8 rather than horizontally. 

9 (H) Waiving or eliminating fees or permits 

10 for development in exchange for the develop11 ment of a larger number of units that are af12 fordable to low-income people. 

13 (5) REGULATIONS.—The Secretary may pro14 mulgate any regulations necessary to carry out this 

15 subsection. 

16 (6) AUTHORIZATION OF APPROPRIATIONS.— 

17 There are authorized to be appropriated to carry out 

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

19 years 2022 through 2027. 

20 SEC. 115. PERMANENT AUTHORIZATION OF APPROPRIA21 TIONS FOR MCKINNEY-VENTO HOMELESS AS22 SISTANCE ACT GRANTS. 

23 Section 408 of the McKinney-Vento Homeless Assist24 ance Act (42 U.S.C. 11364) is amended to read as follows: 


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1 ‘‘SEC. 408. AUTHORIZATION OF APPROPRIATIONS. 

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

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

4 year.’’. 

5 Subtitle B—Rural Housing 

6 Assistance 

7 SEC. 121. RURAL HOUSING REINVESTMENT. 

8 (a) DEFINITIONS.—In this section: 

9 (1) BROAD-BASED NONPROFIT ORGANIZA10 TION.—The term ‘‘broad-based nonprofit organiza11 tion’’ means a nonprofit organization that has a 

12 membership that reflects a variety of interests in the 

13 area in which housing assisted under this section 

14 will be located. 

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

16 program’’ means— 

17 (A) the Very Low-Income Housing Repair 

18 Loans and Grants Program under section 504 

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

20 (B) the Farm Labor Housing loan pro21 gram under section 514 of the Housing Act of 

22 1949 (42 U.S.C. 1484); 

23 (C) the Rural Rental Housing Loan pro24 gram under section 515 of the Housing Act of 

25 1949 (42 U.S.C. 1485); 


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1 (D) the Farm Labor Housing grant pro2 gram under section 516 of the Housing Act of 

3 1949 (42 U.S.C. 1486); and 

4 (E) the Rural Rental Assistance program 

5 under section 521 of the Housing Act of 1949 

6 (42 U.S.C. 1490a). 

7 (3) DOMESTIC FARM LABORER.—The term ‘‘do8 mestic farm laborer’’ means an individual who re9 ceives a substantial portion of the individual’s in10 come from the primary production of processed or 

11 unprocessed agricultural or aquacultural commod12 ities or other farm labor employment. 

13 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti14 ty’’ means— 

15 (A) a broad-based nonprofit organization; 

16 (B) a nonprofit organization with experi17 ence in developing affordable housing, rural 

18 housing, or housing for domestic farm laborers; 

19 (C) a nonprofit organization of domestic 

20 farm laborers; 

21 (D) a federally recognized Indian Tribe; 

22 (E) a community organization; 

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

24 subdivision of a State; or 


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1 (G) a limited partnership with a nonprofit 

2 general partner. 

3 (5) GREEN BUILDING CERTIFICATION.—The 

4 term ‘‘green building certification’’ means— 

5 (A) a certification from the Residential 

6 New Construction Program of the Energy Star 

7 program established by section 324A of the En8 ergy Policy and Conservation Act (42 U.S.C. 

9 6294a); 

10 (B) a certification from the Zero Energy 

11 Ready Home program of the Department of 

12 Energy; and 

13 (C) a certification or accreditation that is 

14 substantially similar to a certification described 

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

16 housing project to be at least 10 percent more 

17 efficient than homes built to the building code 

18 standards of the applicable State. 

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

20 the meaning given the term in section 1303 of the 

21 Federal Housing Enterprises Financial Safety and 

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

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

24 the Secretary of Agriculture. 

25 (b) ASSISTANCE.— 


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1 (1) LOANS AND GRANTS.— 

2 (A) IN GENERAL.—The Secretary shall 

3 award additional loans and grants, including 

4 zero-percent interest loans, under the covered 

5 programs to eligible entities that construct or 

6 preserve off-farm affordable housing, including 

7 multifamily housing, for domestic farm laborers 

8 or multifamily housing for low-income individ9 uals living in rural areas to increase and pre10 serve the supply of available and affordable 

11 rental housing for— 

12 (i) low-income individuals living in 

13 rural areas; and 

14 (ii) domestic farm laborers. 

15 (B) TIMELINE.— 

16 (i) NOTICE OF FUNDING AVAIL17 ABILITY.—Not later than 180 days after 

18 the date of enactment of this Act, the Sec19 retary shall publish a notice of funding 

20 availability to solicit applications for loans 

21 and grants to be awarded under subpara22 graph (A). 

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

24 after the date of enactment of this Act, the 

25 Secretary shall award loans and grants, inVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 cluding zero-percent interest loans, to eligi2 ble entities under subparagraph (A). 

3 (C) LOCAL CONTRIBUTION FOR GRANTS.— 

4 (i) IN GENERAL.—An eligible entity 

5 that receives a grant under this section 

6 shall contribute not less than 10 percent of 

7 the total project cost from sources other 

8 than the grant. 

9 (ii) TIMING OF AVAILABILITY.—An el10 igible entity may not receive a grant under 

11 this section unless the funds required 

12 under clause (i) are available to the eligible 

13 entity as of the date on which the grant is 

14 awarded. 

15 (iii) SOURCES.—An eligible entity may 

16 use amounts from a loan financed by the 

17 Rural Housing Service or the Federal 

18 Housing Administration to satisfy the re19 quirement under clause (i). 

20 (2) RENTAL ASSISTANCE FOR OFF-FARM AF21 FORDABLE HOUSING AND MULTIFAMILY HOUSING.— 

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

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

24 acting through the Under Secretary for Rural 


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1 Development, shall provide rental assistance 

2 to— 

3 (i) owners of off-farm affordable hous4 ing for domestic farm laborers that is as5 sisted by a loan or grant under paragraph 

6 (1); and 

7 (ii) owners of affordable multifamily 

8 housing for low-income individuals living in 

9 rural areas that is assisted by a loan or 

10 grant under paragraph (1). 

11 (B) AMOUNT OF RENT.—In providing rent12 al assistance under subparagraph (A), the Sec13 retary shall make assistance payments to the 

14 owners of housing described in that subpara15 graph in order to make available to low-income 

16 occupants of such housing rentals at rates com17 mensurate to income and not exceeding the 

18 highest of— 

19 (i) 30 percent of adjusted income (as 

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

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

22 1437a(b)(5)), except that the amount shall 

23 be calculated on a monthly basis); 

24 (ii) 10 percent of monthly income; or 


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1 (iii) if the person or family is receiv2 ing payments for welfare assistance from a 

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

4 payments that is specifically designated by 

5 the agency to meet the housing costs of the 

6 person or family. 

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

8 or contribution to rent paid by any recipient of 

9 assistance under this paragraph shall not in10 crease as a result of this section or any other 

11 provision of Federal law or regulation by more 

12 than 10 percent during any 12-month period, 

13 unless the increase above 10 percent is attrib14 utable to increases in income that are unrelated 

15 to this subsection or the other provision of Fed16 eral law or regulation. 

17 (D) AMOUNT OF ASSISTANCE.—The 

18 amount of an assistance payment made on be19 half of a tenant under this paragraph shall be 

20 equal to the difference between— 

21 (i) the monthly contribution of the 

22 tenant, which shall be the applicable 

23 amount under subparagraph (B); and 

24 (ii) the fair market rental for the ju25 risdiction in which the property is located, 


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1 as established by the Secretary under sec2 tion 8(c) of the United States Housing Act 

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

4 (E) REGULATIONS.—The Secretary may 

5 promulgate any regulation that is necessary and 

6 proper to carry out this paragraph. 

7 (3) PRIORITY.—In awarding assistance for 

8 farm labor housing and multi-family housing under 

9 paragraphs (1) and (2), the Secretary shall give pri10 ority to an applicant seeking assistance for a hous11 ing project that— 

12 (A) as determined by the Secretary, is en13 ergy efficient and generates energy, such as 

14 through geo-exchange systems, ground-source 

15 heat pumps, wind turbines, and solar energy 

16 systems; or 

17 (B) has a green building certification. 

18 (c) FUNDING.— 

19 (1) FARM LABOR HOUSING LOANS AND GRANTS

20 PROGRAMS.—There is authorized to be appropriated 

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

22 2022 through 2032 to award loans and grants under 

23 subsection (b)(1)(A) through the Farm Labor Hous24 ing loan program and Farm Labor Housing grant 


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1 program under sections 514 and 516, respectively, 

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

3 (2) RURAL RENTAL HOUSING LOAN PRO4 GRAM.—There is authorized to be appropriated to 

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

6 2022 through 2032 to award loans under subsection 

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

8 program under section 515 of the Housing Act of 

9 1949 (42 U.S.C. 1485). 

10 (3) RURAL RENTAL ASSISTANCE PROGRAM.— 

11 There is authorized to be appropriated to the Sec12 retary $2,500,000,000 for each of fiscal years 2022 

13 through 2032 to award loans under subsection 

14 (b)(1)(A) through the Rural Rental Assistance pro15 gram under section 521 of the Housing Act of 1949 

16 (42 U.S.C. 1490a). 

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

18 SECTION.—There is authorized to be appropriated to 

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

20 2022 through 2032 for rental assistance payments 

21 under subsection (b)(2). 

22 SEC. 122. PERMANENT ESTABLISHMENT OF HOUSING PRES23 ERVATION AND REVITALIZATION PROGRAM. 

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

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


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1 ‘‘SEC. 545. HOUSING PRESERVATION AND REVITALIZATION 

2 PROGRAM. 

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

4 out a program under this section for the preservation and 

5 revitalization of multifamily rental housing projects fi6 nanced under section 515 or both sections 514 and 516. 

7 ‘‘(b) NOTICE OF MATURING LOANS.— 

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

9 Secretary shall provide written notice to each owner 

10 of a property financed under section 515 or both 

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

12 year period beginning upon the provision of such no13 tice, setting forth the options and financial incen14 tives that are available to facilitate the extension of 

15 the loan term or the option to decouple a rental as16 sistance contract pursuant to subsection (f). 

17 ‘‘(2) TO TENANTS.— 

18 ‘‘(A) IN GENERAL.—For each property fi19 nanced under section 515 or both sections 514 

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

21 before the date that such loan will mature, the 

22 Secretary shall provide written notice to each 

23 household residing in such property that in24 forms them of the date of the loan maturity, 

25 the possible actions that may happen with re26 spect to the property upon such maturity, and 


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1 how to protect their right to reside in federally 

2 assisted housing after such maturity. 

3 ‘‘(B) LANGUAGE.—Notice under this para4 graph shall be provided in plain English and 

5 shall be translated into other languages in the 

6 case of any property located in an area in which 

7 a significant number of residents speak such 

8 other languages. 

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

10 under this section, the Secretary may restructure such ex11 isting housing loans, as the Secretary considers appro12 priate, for the purpose of ensuring that such projects have 

13 sufficient resources to preserve the projects to provide safe 

14 and affordable housing for low-income residents and farm 

15 laborers, by— 

16 ‘‘(1) reducing or eliminating interest; 

17 ‘‘(2) deferring loan payments; 

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

19 loan debt; and 

20 ‘‘(4) providing other financial assistance, in21 cluding advances, payments, and incentives (includ22 ing the ability of owners to obtain reasonable re23 turns on investment) required by the Secretary. 

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

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1 section (c), the Secretary shall offer to renew the rental 

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

3 term that is subject to annual appropriations, provided 

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

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

6 and sanitary housing for the full term of the rental assist7 ance contract. 

8 ‘‘(e) RESTRICTIVE USE AGREEMENTS.— 

9 ‘‘(1) REQUIREMENT.—As part of the preserva10 tion and revitalization agreement for a project, the 

11 Secretary shall obtain a restrictive use agreement 

12 that obligates the owner to operate the project in ac13 cordance with this title. 

14 ‘‘(2) TERM.— 

15 ‘‘(A) NO EXTENSION OF RENTAL ASSIST16 ANCE CONTRACT.—Except when the Secretary 

17 enters into a 20-year extension of the rental as18 sistance contract for the project, the term of 

19 the restrictive use agreement for the project 

20 shall be consistent with the term of the restruc21 tured loan for the project. 

22 ‘‘(B) EXTENSION OF RENTAL ASSISTANCE

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

24 year extension of the rental assistance contract 


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1 for a project, the term of the restrictive use 

2 agreement for the project shall be for 20 years. 

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

4 terminate the 20-year use restrictive use agree5 ment for a project prior to the end of its term 

6 if the 20-year rental assistance contract for the 

7 project with the owner is terminated at any 

8 time for reasons outside the owner’s control. 

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

10 ‘‘(1) RENEWAL OF RENTAL ASSISTANCE CON11 TRACT.—If the Secretary determines that a matur12 ing loan for a project cannot reasonably be restruc13 tured in accordance with subsection (c) and the 

14 project was operating with rental assistance under 

15 section 521, the Secretary may renew the rental as16 sistance contract, notwithstanding any provision of 

17 section 521, for a term, subject to annual appropria18 tions, of at least 10 years but not more than 20 

19 years. 

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

21 term of the rental assistance contract under section 

22 521 for a project shall obligate the owner to con23 tinue to maintain the project as decent, safe, and 

24 sanitary housing and to operate the development in 


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1 accordance with this title, except that rents shall be 

2 based on the lesser of— 

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

4 or 

5 ‘‘(B) (the operating cost adjustment factor 

6 as a payment standard as provided under sec7 tion 524 of the Multifamily Assisted Housing 

8 Reform and Affordability Act of 1997 (42 

9 U.S.C. 1437 note)). 

10 ‘‘(g) MULTIFAMILY HOUSING TRANSFER TECHNICAL

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

12 Secretary may provide grants to qualified nonprofit orga13 nizations and public housing agencies to provide technical 

14 assistance, including financial and legal services, to bor15 rowers under loans under this title for multifamily housing 

16 to facilitate the acquisition of such multifamily housing 

17 properties in areas where the Secretary determines there 

18 is a risk of loss of affordable housing. 

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

20 loan or loans for a rental project originally financed under 

21 section 515 or both sections 514 and 516 have matured 

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

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

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

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1 ance assigned to the tenant’s unit to another rental project 

2 originally financed under section 515 or both sections 514 

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

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

5 restrictions. 

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

7 made available for the program under this section for any 

8 fiscal year, the Secretary may use not more than 

9 $1,000,000 for administrative expenses for carrying out 

10 such program. 

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

12 is authorized to be appropriated for the program under 

13 this section $200,000,000 for each of fiscal years 2022 

14 through 2027.’’. 

15 SEC. 123. ELIGIBILITY FOR RURAL HOUSING VOUCHERS. 

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

17 1490r) is amended by adding at the end the following: 

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

19 515, AND 516 PROJECTS.—The Secretary may provide 

20 rural housing vouchers under this section for any low-in21 come household (including those not receiving rental as22 sistance) residing in a property financed with a loan made 

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

24 1485) which has been prepaid, has been foreclosed, or has 

25 matured after September 30, 2005, or residing in a propVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 erty assisted under section 514 or 516 that is owned by 

2 a nonprofit organization or public agency.’’. 

3 SEC. 124. AMOUNT OF VOUCHER ASSISTANCE. 

4 Notwithstanding any other provision of law, in the 

5 case of any rural housing voucher provided pursuant to 

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

7 1490r), the amount of the monthly assistance payment for 

8 the household on whose behalf such assistance is provided 

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

10 section 542. 

11 SEC. 125. USE OF AVAILABLE RENTAL ASSISTANCE. 

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

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

14 following: 

15 ‘‘(3) In the case of any rental assistance contract au16 thority that becomes available because of the termination 

17 of assistance on behalf of an assisted family— 

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

19 project, the Secretary shall provide the owner a pe20 riod of 6 months before such assistance is made 

21 available pursuant to subparagraph (B) during 

22 which the owner may use such assistance authority 

23 to provide assistance on behalf of an eligible unas24 sisted family that— 


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

2 that the assisted family resided in prior to such 

3 termination; or 

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

5 rental project during such period; and 

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

7 subparagraph (A), the Secretary shall use such re8 maining authority to provide such assistance on be9 half of eligible families residing in other rental 

10 projects originally financed under section 515 or 

11 both sections 514 and 516.’’. 

12 SEC. 126. FUNDING FOR MULTIFAMILY TECHNICAL IM13 PROVEMENTS. 

14 There is authorized to be appropriated to the Sec15 retary of Agriculture $50,000,000 for fiscal year 2022 for 

16 improving the technology of the Department of Agri17 culture used to process loans for multifamily housing and 

18 otherwise managing such housing. Such improvements 

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

20 appropriation of such amounts and such amount shall re21 main available until the expiration of such 5-year period. 

22 SEC. 127. PLAN FOR PRESERVING AFFORDABILITY OF 

23 RENTAL PROJECTS. 

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

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


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

2 a written plan to Congress for preserving the affordability 

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

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

5 (42 U.S.C. 1485) or made to nonprofit or public agencies 

6 under section 514 of that Act (42 U.S.C. 1484) and avoid7 ing the displacement of tenant households, which shall— 

8 (1) set forth specific performance goals and 

9 measures; 

10 (2) set forth the specific actions and mecha11 nisms by which such goals will be achieved; 

12 (3) set forth specific measurements by which 

13 progress towards achievement of each goal can be 

14 measured; 

15 (4) provide for detailed reporting on outcomes; 

16 and 

17 (5) include any legislative recommendations to 

18 assist in achievement of the goals under the plan. 

19 (b) ADVISORY COMMITTEE.— 

20 (1) ESTABLISHMENT; PURPOSE.—The Sec21 retary shall establish an advisory committee whose 

22 purpose shall be to assist the Secretary— 

23 (A) in preserving properties assisted under 

24 section 514 or 515 of the Housing Act of 1949 

25 (42 U.S.C. 1484, 1485) that are owned by nonVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 profit or public agencies through the multi2 family housing preservation and revitalization 

3 program under section 545 of that Act (as 

4 added by this subtitle); and 

5 (B) implementing the plan required under 

6 subsection (a) of this section. 

7 (2) MEMBER.—The advisory committee shall 

8 consist of 14 members, appointed by the Secretary, 

9 as follows: 

10 (A) A State Director of Rural Develop11 ment for the Department of Agriculture. 

12 (B) The Administrator for Rural Housing 

13 Service of the Department of Agriculture. 

14 (C) Two representatives of for-profit devel15 opers or owners of multifamily rural rental 

16 housing. 

17 (D) Two representatives of nonprofit devel18 opers or owners of multifamily rural rental 

19 housing. 

20 (E) Two representatives of State housing 

21 finance agencies. 

22 (F) Two representatives of tenants of mul23 tifamily rural rental housing. 

24 (G) One representative of a community de25 velopment financial institution that is involved 


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1 in preserving the affordability of housing as2 sisted under sections 514, 515, and 516 of the 

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

4 1486). 

5 (H) One representative of a nonprofit or6 ganization that operates nationally and has ac7 tively participated in the preservation of hous8 ing assisted by the Rural Housing Service by 

9 conducting research regarding, and providing fi10 nancing and technical assistance for, preserving 

11 the affordability of such housing. 

12 (I) One representative of low-income hous13 ing tax credit investors. 

14 (J) One representative of regulated finan15 cial institutions that finance affordable multi16 family rural rental housing developments. 

17 (3) MEETINGS.—The advisory committee shall 

18 meet not less often than once each calendar quarter. 

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

20 Secretary to carry out its purpose, the advisory com21 mittee shall carry out the following functions: 

22 (A) Assisting the Rural Housing Service of 

23 the Department of Agriculture to improve esti24 mates of the size, scope, and condition of rental 

25 housing portfolio of the Service, including the 


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1 time frames for maturity of mortgages and 

2 costs for preserving the portfolio as affordable 

3 housing. 

4 (B) Reviewing current policies and proce5 dures of the Rural Housing Service regarding 

6 preservation of affordable rental housing fi7 nanced under sections 514, 515, 516, and 538 

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

9 1485, 1486, 1490p–2), the Multifamily Preser10 vation and Revitalization Demonstration pro11 gram (commonly known as the ‘‘MPR’’), and 

12 the Rural Rental Assistance program under sec13 tion 521 of the Housing Act of 1949 (42 

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

15 regarding improvements and modifications to 

16 such policies and procedures. 

17 (C) Providing ongoing review of Rural 

18 Housing Service program results. 

19 (D) Providing reports to Congress and the 

20 public on meetings, recommendations, and other 

21 findings of the advisory committee. 

22 SEC. 128. COVERED HOUSING PROGRAMS. 

23 Section 41411(a)(3) of the Violence Against Women 

24 Act of 1994 (34 U.S.C. 12491(a)(3)) is amended— 


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1 (1) in subparagraph (I), by striking ‘‘and’’ at 

2 the end; 

3 (2) by redesignating subparagraph (J) as sub4 paragraph (K); and 

5 (3) by inserting after subparagraph (I) the fol6 lowing: 

7 ‘‘(J) rural development housing voucher 

8 assistance provided by the Secretary of Agri9 culture under section 542 of the Housing Act of 

10 1949 (42 U.S.C. 1490r), without regard to sub11 section (b) of that section, and applicable ap12 propriation Acts; and’’. 

13 TITLE II—REVENUE PROVISIONS 

14 SEC. 201. EXTENSION OF PERIOD FOR REHABILITATION EX15 PENDITURES. 

16 (a) IN GENERAL.—Clause (ii) of section 42(e)(3)(A) 

17 of the Internal Revenue Code of 1986 is amended by in18 serting ‘‘(any 36-month period, in the case of buildings 

19 receiving an allocation of housing credit dollar amount be20 fore January 1, 2023)’’ after ‘‘24-month period’’. 

21 (b) CONFORMING AMENDMENT.—Subparagraph (A) 

22 of section 42(e)(4) of the Internal Revenue Code of 1986 

23 is amended by inserting ‘‘(or 36-month period, if applica24 ble)’’ after ‘‘24-month period’’. 


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

2 this section shall apply to buildings receiving an allocation 

3 of housing credit dollar amount after December 31, 2017. 

4 SEC. 202. EXTENSION OF BASIS EXPENDITURE DEADLINE. 

5 (a) IN GENERAL.—Clause (i) of section 42(h)(1)(E) 

6 of the Internal Revenue Code of 1986 is amended by in7 serting ‘‘(the third calendar year, in the case of an alloca8 tion made before January 1, 2023)’’ after ‘‘second cal9 endar year’’. 

10 (b) QUALIFIED BUILDING.—Clause (ii) of section 

11 42(h)(1)(E) of the Internal Revenue Code of 1986 is 

12 amended— 

13 (1) by striking ‘‘the date which is 1 year after 

14 the date that the allocation was made’’ and inserting 

15 ‘‘the applicable date’’; 

16 (2) by inserting ‘‘(or third, if applicable)’’ after 

17 ‘‘second’’ in the first sentence; 

18 (3) by inserting ‘‘(or third)’’ after ‘‘second’’ in 

19 the second sentence; 

20 (4) by striking ‘‘BUILDING.—For purposes of’’ 

21 and inserting ‘‘BUILDING.— 

22 ‘‘(I) IN GENERAL.—For purposes 

23 of’’; and 

24 (5) by adding at the end the following new sub25 clause: 


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1 ‘‘(II) APPLICABLE DATE.—For 

2 purposes of subclause (I), the applica3 ble date is 1 year after the date that 

4 the allocation was made with respect 

5 to the building (2 years, in the case of 

6 allocations made before January 1, 

7 2023).’’. 

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

9 this section shall apply to buildings receiving an allocation 

10 of housing credit dollar amount after December 31, 2017. 

11 SEC. 203. TAX-EXEMPT BOND FINANCING REQUIREMENT. 

12 (a) IN GENERAL.—Subparagraph (B) of section 

13 42(h)(4) of the Internal Revenue Code of 1986 is amended 

14 by adding at the end the following: ‘‘The preceding sen15 tence shall be applied by substituting ‘25 percent’ for ‘50 

16 percent’ in the case of any building which is financed by 

17 any obligation issued in calendar year 2021, 2022, 2023, 

18 or 2024 (and not by any previously issued obligation).’’. 

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

20 this section shall apply to buildings placed in service in 

21 taxable years beginning after December 31, 2021. 

22 SEC. 204. INCREASES IN STATE ALLOCATIONS. 

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

24 of the Internal Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘$1.75’’ in subclause (I) and in2 serting ‘‘$4.92 ($3.88 in the case of calendar year 

3 2021)’’; and 

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

5 and inserting ‘‘$5,670,462 ($4,462,734 in the case 

6 of calendar year 2021)’’. 

7 (b) COST-OF-LIVING ADJUSTMENT.—Subparagraph 

8 (H) of section 42(h)(3) of such Code is amended— 

9 (1) by striking ‘‘2002’’ in clause (i) and insert10 ing ‘‘2022’’; 

11 (2) by striking ‘‘the $2,000,000 and $1.75 

12 amounts in subparagraph (C)’’ in clause (i) and in13 serting ‘‘the dollar amounts applicable to such cal14 endar year under subclauses (I) and (II) of subpara15 graph (C)(ii)’’; 

16 (3) by striking ‘‘2001’’ in clause (i)(II) and in17 serting ‘‘2021’’; 

18 (4) by striking ‘‘$2,000,000 amount’’ in clause 

19 (ii)(I) and inserting ‘‘amount under subparagraph 

20 (C)(ii)(II)’’; and 

21 (5) by striking ‘‘$1.75 amount’’ in clause 

22 (ii)(II) and inserting ‘‘amount under subparagraph 

23 (C)(ii)(I)’’. 


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

2 this section shall apply to calendar years beginning after 

3 December 31, 2020. 

4 SEC. 205. BUILDINGS DESIGNATED TO SERVE EXTREMELY 

5 LOW-INCOME HOUSEHOLDS. 

6 (a) RESERVED STATE ALLOCATION.— 

7 (1) IN GENERAL.—Subsection (h) of section 42 

8 of the Internal Revenue Code of 1986 is amended— 

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

10 and (8) as paragraphs (7), (8), and (9), respec11 tively; and 

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

13 following new paragraph: 

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

15 FOR PROJECTS DESIGNATED TO SERVE EXTREMELY

16 LOW-INCOME HOUSEHOLDS.— 

17 ‘‘(A) IN GENERAL.—Not more than 90 

18 percent of the State housing credit ceiling for 

19 any State for any calendar year shall be allo20 cated to buildings other than buildings de21 scribed in subparagraph (B). 

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

23 is described in this subparagraph if 20 percent 

24 or more of the residential units in such building 

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1 puted income limitation applicable to such units 

2 were 30 percent of area median gross income) 

3 and are designated by the taxpayer for occu4 pancy by households the aggregate household 

5 income of which does not exceed the greater 

6 of— 

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

8 income, or 

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

10 to the Federal poverty line (within the 

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

12 ‘‘(C) STATE MAY NOT OVERRIDE SET13 ASIDE.—Nothing in subparagraph (F) of para14 graph (3) shall be construed to permit a State 

15 not to comply with subparagraph (A) of this 

16 paragraph.’’. 

17 (2) CONFORMING AMENDMENT.—Section 

18 42(b)(4)(C) of the Internal Revenue Code of 1986 is 

19 amended by striking ‘‘(h)(7)’’ and inserting 

20 ‘‘(h)(8)’’. 

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

22 42(d) of the Internal Revenue Code of 1986 is amended 

23 by adding at the end the following new subparagraph: 

24 ‘‘(C) INCREASE IN CREDIT FOR PROJECTS

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1 COME HOUSEHOLDS.—In the case of any build2 ing— 

3 ‘‘(i) which is described in subsection 

4 (h)(6)(B), and 

5 ‘‘(ii) which is designated by the hous6 ing credit agency as requiring the increase 

7 in credit under this subparagraph in order 

8 for such building to be financially feasible 

9 as part of a qualified low-income housing 

10 project, 

11 subparagraph (B) shall not apply to the portion 

12 of such building which is comprised of such 

13 units, and the eligible basis of such portion of 

14 the building shall be 150 percent of such basis 

15 determined without regard to this subpara16 graph.’’. 

17 (c) EFFECTIVE DATE.—The amendments 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 bonds as described in sec21 tion 42(h)(4) of the Internal Revenue Code of 1986, which 

22 receive a determination of housing credit dollar amount, 

23 after the date of the enactment of this Act. 


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1 SEC. 206. INCLUSION OF INDIAN AREAS AS DIFFICULT DE2 VELOPMENT AREAS FOR PURPOSES OF CER3 TAIN BUILDINGS. 

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

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

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

7 and any Indian area’’. 

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

9 42(d)(5)(B) of the Internal Revenue Code of 1986 is 

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

11 and by inserting after subclause (I) the following new sub12 clauses: 

13 ‘‘(II) INDIAN AREA.—For pur14 poses of subclause (I), the term ‘In15 dian area’ means any Indian area (as 

16 defined in section 4(11) of the Native 

17 American Housing Assistance and 

18 Self Determination Act of 1996 (25 

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

20 ‘‘(III) SPECIAL RULE FOR

21 BUILDINGS IN INDIAN AREAS.—In the 

22 case of an area which is a difficult de23 velopment area solely because it is an 

24 Indian area, a building shall not be 

25 treated as located in such area unless 

26 such building is assisted or financed 


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1 under the Native American Housing 

2 Assistance and Self Determination 

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

4 or the project sponsor is an Indian 

5 tribe (as defined in section 

6 45A(c)(6)), a tribally designated hous7 ing entity (as defined in section 4(22) 

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

9 wholly owned or controlled by such an 

10 Indian tribe or tribally designated 

11 housing entity.’’. 

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

13 this section shall apply to buildings placed in service after 

14 December 31, 2021. 

15 SEC. 207. INCLUSION OF RURAL AREAS AS DIFFICULT DE16 VELOPMENT AREAS. 

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

18 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986, as 

19 amended by section 206, is further amended by inserting 

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

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

22 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

23 amended by section 206, is further amended by redesig24 nating subclause (IV) as subclause (V) and by inserting 

25 after subclause (III) the following new subclause: 


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1 ‘‘(IV) RURAL AREA.—For pur2 poses of subclause (I), the term ‘rural 

3 area’ means any non-metropolitan 

4 area, or any rural area as defined by 

5 section 520 of the Housing Act of 

6 1949, which is identified by the quali7 fied allocation plan under subsection 

8 (m)(1)(B).’’. 

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

10 this section shall apply to buildings placed in service after 

11 December 31, 2021. 

12 SEC. 208. INCREASE IN CREDIT FOR BOND-FINANCED 

13 PROJECTS DESIGNATED BY HOUSING CREDIT 

14 AGENCY. 

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

16 of the Internal Revenue Code of 1986 is amended by strik17 ing the second sentence. 

18 (b) TECHNICAL AMENDMENTS.—Clause (v) of sec19 tion 42(d)(5)(B) of the Internal Revenue Code of 1986, 

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

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

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

23 and inserting ‘‘housing credit agency’’. 

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

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1 mination of housing credit dollar amount after the date 

2 of the enactment of this Act. 

3 SEC. 209. REPEAL OF QUALIFIED CONTRACT OPTION. 

4 (a) TERMINATION OF OPTION FOR CERTAIN BUILD5 INGS.— 

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

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

8 1986, as redesignated by section 205, is amended by 

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

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

11 (2) BUILDINGS DESCRIBED.—Subparagraph 

12 (E) of section 42(h)(7) of such Code, as so redesig13 nated, is amended by adding at the end the following 

14 new clause: 

15 ‘‘(iii) BUILDINGS DESCRIBED.—A 

16 building described in this clause is a build17 ing— 

18 ‘‘(I) which received its allocation 

19 of housing credit dollar amount before 

20 January 1, 2021, or 

21 ‘‘(II) in the case of a building 

22 any portion of which is financed as 

23 described in paragraph (4), which re24 ceived before January 1, 2021, a de25 termination from the issuer of the 


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1 tax-exempt bonds or the housing cred2 it agency that the building is eligible 

3 to receive an allocation of housing 

4 credit dollar amount under the rules 

5 of paragraphs (1) and (2) of sub6 section (m).’’. 

7 (b) RULES RELATING TO EXISTING PROJECTS.— 

8 Subparagraph (F) of section 42(h)(7) of the Internal Rev9 enue Code of 1986, as redesignated by section 205, is 

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

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

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

13 value (determined by the housing credit agency by taking 

14 into account the rent restrictions required for the low-in15 come portion of the building to continue to meet the stand16 ards of paragraphs (1) and (2) of subsection (g)). The 

17 Secretary shall prescribe such regulations as may be nec18 essary or appropriate to carry out this paragraph.’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Paragraph (7) of section 42(h) of the Inter21 nal Revenue Code of 1986, as redesignated by sec22 tion 205, is amended by striking subparagraph (G) 

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

24 and (K) as subparagraphs (G), (H), (I), and (J), re25 spectively. 


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

2 such Code, as so redesignated and as amended by 

3 subsection (a), is further amended by striking ‘‘sub4 paragraph (I)’’ and inserting ‘‘subparagraph (H)’’. 

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

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

7 as redesignated by section 205 and subsection (c), is 

8 amended by striking ‘‘agreement’’ and inserting ‘‘commit9 ment’’. 

10 (e) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to buildings with respect to which 

12 a written request described in section 42(h)(7)(H) of the 

13 Internal Revenue Code of 1986, as redesignated by section 

14 205 and subsection (c), is submitted after the date of the 

15 enactment of this Act. 

16 SEC. 210. MODIFICATION AND CLARIFICATION OF RIGHTS 

17 RELATING TO BUILDING PURCHASE. 

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

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

20 42(i)(7) of the Internal Revenue Code of 1986 is 

21 amended by striking ‘‘a right of 1st refusal’’ and in22 serting ‘‘an option’’. 

23 (2) CONFORMING AMENDMENT.—The heading 

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


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

2 inserting ‘‘OPTION’’. 

3 (b) CLARIFICATION WITH RESPECT TO RIGHT OF

4 FIRST REFUSAL AND PURCHASE OPTIONS.— 

5 (1) PURCHASE OF PARTNERSHIP INTEREST.— 

6 Subparagraph (A) of section 42(i)(7) of the Internal 

7 Revenue Code of 1986, as amended by subsection 

8 (a), is amended by striking ‘‘the property’’ and in9 serting ‘‘the property or all of the partnership inter10 ests (other than interests of the person exercising 

11 such option or a related party thereto (within the 

12 meaning of section 267(b) or 707(b)(1))) relating to 

13 the property’’. 

14 (2) PROPERTY INCLUDES ASSETS RELATING TO

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

16 the Internal Revenue Code of 1986 is amended by 

17 adding at the end the following new subparagraph: 

18 ‘‘(C) PROPERTY.—For purposes of sub19 paragraph (A), the term ‘property’ may include 

20 all or any of the assets held for the develop21 ment, operation, or maintenance of a build22 ing.’’. 

23 (3) EXERCISE OF RIGHT OF FIRST REFUSAL

24 AND PURCHASE OPTIONS.—Subparagraph (A) of 

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


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1 1986, as amended by subsection (a) and paragraph 

2 (1)(A), is amended by adding at the end the fol3 lowing: ‘‘For purposes of determining whether an 

4 option, including a right of first refusal, to purchase 

5 property or partnership interests holding (directly or 

6 indirectly) such property is described in the pre7 ceding sentence— 

8 ‘‘(i) such option or right of first re9 fusal shall be exercisable with or without 

10 the approval of any owner of the project 

11 (including any partner, member, or affili12 ated organization of such an owner), and 

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

14 exercisable in response to any offer to pur15 chase the property or partnership interests, 

16 including an offer by a related party.’’. 

17 (c) CONFORMING AMENDMENTS.—Subparagraph (B) 

18 of section 42(i)(7) of the Internal Revenue Code of 1986 

19 is amended by striking ‘‘the sum of’’ and all that follows 

20 and inserting ‘‘the principal amount of outstanding in21 debtedness secured by the building (other than indebted22 ness incurred within the 5-year period ending on the date 

23 of the sale to the tenants). In the case of a purchase of 

24 a partnership interest, the minimum purchase price is an 

25 amount not less than such interest’s ratable share of the 


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1 amount determined under the first sentence of this sub2 paragraph.’’. 

3 (d) EFFECTIVE DATES.— 

4 (1) MODIFICATION OF RIGHT OF FIRST RE5 FUSAL.—The amendment made by subsection (a) 

6 shall apply to agreements entered into or amended 

7 after the date of the enactment of this Act. 

8 (2) CLARIFICATION.—The amendments made 

9 by subsections (b) and (c) shall apply to agreements 

10 among the owners of the project (including partners, 

11 members, and their affiliated organizations) and per12 sons described in section 42(i)(7)(A) of the Internal 

13 Revenue Code of 1986 entered into before, on, or 

14 after the date of the enactment of this Act. 

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

16 amendments made by this section is intended to su17 persede express language in any agreement with re18 spect to the terms of a right of first refusal or op19 tion permitted by section 42(i)(7) of the Internal 

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

21 enactment of this Act. 

22 SEC. 211. PROHIBITION OF LOCAL APPROVAL AND CON23 TRIBUTION REQUIREMENTS. 

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

25 of the Internal Revenue Code of 1986 is amended— 


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

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

3 clauses (ii) and (iii); and 

4 (2) by adding at the end the following new sub5 paragraph: 

6 ‘‘(E) LOCAL APPROVAL OR CONTRIBUTION

7 NOT TAKEN INTO ACCOUNT.—The selection cri8 teria under a qualified allocation plan shall not 

9 include consideration of— 

10 ‘‘(i) any support or opposition with re11 spect to the project from local or elected 

12 officials, or 

13 ‘‘(ii) any local government contribu14 tion to the project, except to the extent 

15 such contribution is taken into account as 

16 part of a broader consideration of the 

17 project’s ability to leverage outside funding 

18 sources, and is not prioritized over any 

19 other source of outside funding.’’. 

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

21 this section shall apply to allocations of housing credit dol22 lar amounts made after December 31, 2021. 


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1 SEC. 212. ADJUSTMENT OF CREDIT TO PROVIDE RELIEF 

2 DURING COVID–19 OUTBREAK. 

3 (a) IN GENERAL.—At the election of a taxpayer who 

4 is an owner of an eligible low-income building— 

5 (1) the credit determined under section 42 of 

6 the Internal Revenue Code of 1986 for the first or 

7 second taxable year of such building’s credit period 

8 ending on or after July 1, 2020, shall be 150 per9 cent of the amount which would (but for this sub10 section) be so allowable with respect to such building 

11 for such taxable year; and 

12 (2) the aggregate credits allowable under such 

13 section with respect to such building shall be re14 duced, on a pro rata basis for each subsequent tax15 able year in the credit period, by the increase in the 

16 credit allowed by reason of paragraph (1) with re17 spect to such first or second taxable year. 

18 The preceding sentence shall not be construed to affect 

19 whether any taxable year is part of the credit, compliance, 

20 or extended use periods for purposes of such section 42. 

21 (b) ELIGIBLE LOW-INCOME BUILDING.—For pur22 poses of this section, the term ‘‘eligible low-income build23 ing’’ means a qualified low-income building with respect 

24 to which— 

25 (1) the first year in the credit period ends on 

26 or after July 1, 2020, and before July 1, 2022; and 


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1 (2) construction or leasing delays have occurred 

2 after January 31, 2020, due to the outbreak of 

3 coronavirus disease 2019 (COVID–19) in the United 

4 States. 

5 (c) ELECTION.— 

6 (1) IN GENERAL.—The election under sub7 section (a) shall be made at such time and in such 

8 manner as shall be prescribed by the Secretary of 

9 the Treasury (or the Secretary’s delegate) and, once 

10 made, shall be irrevocable by the taxpayer and any 

11 successor in ownership. 

12 (2) PARTNERSHIPS.—In the case of an eligible 

13 low-income building owned by a partnership or S 

14 corporation, such election shall be made at the entity 

15 level. 

16 (3) CERTIFICATION.—An owner making such 

17 election shall provide to the housing credit agency, 

18 at the same time and in addition to such other infor19 mation as may be required under section 42(l)(1) of 

20 the Internal Revenue Code of 1986 with respect to 

21 the building, a certification that the purpose of mak22 ing such election is to offset any reductions in cap23 ital or additional costs arising by reason of the out24 break of coronavirus disease 2019 (COVID–19) in 

25 the United States. Such certification shall include 


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1 any documentation which the housing credit agency 

2 may request. 

3 (d) DEFINITIONS.—Any term used in this section 

4 which is also used in section 42 of the Internal Revenue 

5 Code of 1986 shall have the same meaning as when used 

6 in such section. 

7 SEC. 213. INCREASE IN CREDIT FOR LOW-INCOME HOUSING 

8 SUPPORTIVE SERVICES. 

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

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

11 205, is further amended by adding at the end the following 

12 new subparagraphs: 

13 ‘‘(D) INCREASE IN CREDIT FOR PROVIDING

14 SUPPORTIVE SERVICES.— 

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

16 building which includes common areas, or 

17 property used therein, dedicated to the 

18 provision of on-site qualified supportive 

19 services, except as provided in subpara20 graphs (E) and (F), the eligible basis of 

21 the portion of the building which is com22 prised of such areas or property (after the 

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

24 shall be increased by an amount equal to 

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1 out regard to this subparagraph and sub2 paragraphs (B) and (C). 

3 ‘‘(ii) QUALIFIED SUPPORTIVE SERV4 ICES.—For purposes of clause (i), the term 

5 ‘qualified supportive services’ means serv6 ices— 

7 ‘‘(I) provided by the owner of a 

8 building (directly or through contracts 

9 with third-party service providers) pri10 marily to tenants of the building, 

11 ‘‘(II) which are intended to pro12 mote economic self-sufficiency and 

13 physical and mental health and well14 being in pursuit of retaining perma15 nent housing, including childcare or 

16 eldercare services, health services, co17 ordination of tenant benefits, job 

18 training, financial counseling, resident 

19 engagement services, or such other 

20 similar services as may be defined by 

21 the allocating agency in the qualified 

22 allocation plan, 

23 ‘‘(III) which are provided to ten24 ants and other beneficiaries as may be 

25 specified by the housing credit agency, 


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1 including specifications as to which 

2 services may be provided to non-ten3 ants, 

4 ‘‘(IV) which are provided at no 

5 cost to beneficiaries other than any 

6 fee, copay, or coinsurance customarily 

7 charged by service providers for simi8 lar services, and 

9 ‘‘(V) usage of or participation in 

10 which is not a condition of tenancy in 

11 the building. 

12 Such term includes reasonable and nec13 essary measures for the provision of such 

14 services, including measures to engage ten15 ants and other beneficiaries in and coordi16 nate such services, and measures required 

17 to obtain the certification described in sub18 paragraph (E)(ii)(III). 

19 ‘‘(E) EXTENDED SUPPORTIVE SERVICES

20 COMMITMENT.— 

21 ‘‘(i) IN GENERAL.—Subparagraph 

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

23 taxable year unless an extended supportive 

24 services commitment is in effect for such 

25 taxable year. 


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1 ‘‘(ii) EXTENDED SUPPORTIVE SERV2 ICES COMMITMENT.—The term ‘extended 

3 supportive services commitment’ means 

4 any agreement between the owner of a 

5 building and the housing credit agency 

6 which— 

7 ‘‘(I) provides estimates of the 

8 amounts to be spent, updated at least 

9 once every 5 years, on the provision of 

10 qualified supportive services to ten11 ants of such building and other bene12 ficiaries for each taxable year remain13 ing in the credit period, 

14 ‘‘(II) requires the designation of 

15 one or more individuals to engage ten16 ants regarding and coordinate delivery 

17 of qualified supportive services, 

18 ‘‘(III) requires the maintenance 

19 of an appropriate certification, as de20 termined by the Secretary in consulta21 tion with the housing credit agencies, 

22 for qualified supportive services, sub23 ject to recertification at least once 

24 every 5 years, 


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1 ‘‘(IV) requires appropriate an2 nual reporting to the housing credit 

3 agency on expenditures and outcomes, 

4 as determined by such agency, and 

5 ‘‘(V) is binding on all successors 

6 in ownership of such building. 

7 ‘‘(iii) EXCEPTIONS IF FORECLOSURE

8 OR IF NO BUYER WILLING TO MAINTAIN

9 SERVICES.—The requirement of clause 

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

11 the date the building is acquired by fore12 closure (or instrument in lieu of fore13 closure) unless the housing credit agency 

14 determines that such acquisition is part of 

15 an arrangement with the taxpayer a pur16 pose of which is to terminate such require17 ment. 

18 ‘‘(iv) EFFECT OF NONCOMPLIANCE.— 

19 If, during a taxable year, there is a deter20 mination by the housing credit agency that 

21 an extended supportive services commit22 ment was not in effect as of the beginning 

23 of such year or that there is evidence of 

24 other noncompliance as determined by the 


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1 housing credit agency (including failure to 

2 provide qualified supportive services)— 

3 ‘‘(I) such determination shall not 

4 apply to any period before such year 

5 and subparagraph (D)(i) shall apply 

6 to such taxable year without regard to 

7 such determination if the failure is 

8 corrected within 1 year from the date 

9 of the determination, and 

10 ‘‘(II) in the case of any year to 

11 which such determination does apply, 

12 if the failure is not corrected within 1 

13 year from the date of the determina14 tion, the credit recapture amount 

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

16 which such 1 year period expires shall 

17 be increased by the amount of any in18 crease in the credit under this section 

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

20 the year to which the determination 

21 applies. 

22 ‘‘(v) PROJECTS WHICH CONSIST OF

23 MORE THAN 1 BUILDING.—Rules similar to 

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

25 apply. 


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1 ‘‘(F) RESPONSIBILITIES OF HOUSING

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

3 not apply to a building for any taxable year un4 less— 

5 ‘‘(i) the housing credit agency sets 

6 forth criteria— 

7 ‘‘(I) to determine appropriate, 

8 evidence-based supportive services, 

9 ‘‘(II) for the selection of appro10 priate and competent service pro11 viders, and 

12 ‘‘(III) which common areas or 

13 property described in subparagraph 

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

15 for the increase in credit under sub16 paragraph (D), 

17 ‘‘(ii) the housing credit agency pro18 vides a procedure that the agency (or an 

19 agent or other private contractor of such 

20 agency) shall follow in monitoring for non21 compliance with the provisions of this sub22 paragraph and subparagraphs (D) and (E) 

23 and in reporting such noncompliance to the 

24 Secretary, and 


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1 ‘‘(iii) appropriate books and records 

2 for expenditures with respect to the quali3 fied supportive services are maintained on 

4 an annual basis, and are available for in5 spection upon request by the housing cred6 it agency.’’. 

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

8 this section shall apply to buildings which receive alloca9 tions of housing credit dollar amount or, in the case of 

10 projects financed by tax-exempt obligations as described 

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

12 which are first taken into account under section 146 of 

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

14 SEC. 214. STUDY OF TAX INCENTIVES FOR THE CONVER15 SION OF COMMERCIAL PROPERTY TO AF16 FORDABLE HOUSING. 

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

18 Act, the Secretary of the Treasury, the Secretary of Hous19 ing and Urban Development, the Deputy Under Secretary 

20 for Rural Development of the Department of Agriculture, 

21 and the Director of the Office of Management and Budget 

22 shall collaborate to produce a cost-benefit analysis of pro23 viding tax incentives, including the non-recognition of cap24 ital gains, to the owners of vacant or under-utilized com25 mercial real estate in exchange for selling these properties 


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1 to State, local, or tribal housing finance agencies for con2 version to affordable rental housing for low-income resi3 dents, including shelters for the homeless. 

4 SEC. 215. RENTERS CREDIT. 

5 (a) IN GENERAL.—Subpart C of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of 

7 1986 is amended by inserting after section 36B the fol8 lowing new section: 

9 ‘‘SEC. 36C. RENTERS CREDIT. 

10 ‘‘(a) ALLOWANCE OF CREDIT.— 

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

12 credit against the tax imposed by this subtitle for 

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

14 amounts determined under paragraph (2) for all 

15 qualified buildings with a credit period which in16 cludes months occurring during the taxable year. 

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

18 amount determined under this paragraph with re19 spect to any qualified building for any taxable year 

20 shall be an amount equal to the lesser of— 

21 ‘‘(A) the aggregate qualified rental reduc22 tion amounts for all eligible units within such 

23 building for months occurring during the tax24 able year which are within the credit period for 

25 such building, or 


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1 ‘‘(B) the rental reduction credit amount al2 located to such building for such months. 

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

4 this section— 

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

6 building’ means any building which is residen7 tial rental property (as defined in section 

8 168(e)(2)(A)) of the taxpayer with respect to 

9 which— 

10 ‘‘(i) a rental reduction credit amount 

11 has been allocated by a rental reduction 

12 credit agency of a State, and 

13 ‘‘(ii) a qualified rental reduction 

14 agreement is in effect. 

15 ‘‘(B) BUILDING NOT DISQUALIFIED BY

16 OTHER ASSISTANCE.—A building shall not fail 

17 to be treated as a qualified building merely be18 cause— 

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

20 42 with respect to such building or there 

21 was any other Federal assistance in the 

22 construction or rehabilitation of such 

23 building, 


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1 ‘‘(ii) the rehabilitation credit deter2 mined under section 47 was allowed under 

3 section 38 with respect to such building, or 

4 ‘‘(iii) Federal rental assistance was 

5 provided for such building during any pe6 riod preceding the credit period. 

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

8 For purposes of this section— 

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

10 reduction amount’ means, with respect to any eligi11 ble unit for any month, an amount equal to the ap12 plicable percentage (as determined under subsection 

13 (e)(1)) of the excess of— 

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

15 ‘‘(B) the family rental payment required 

16 for such unit. 

17 ‘‘(2) APPLICABLE RENT.— 

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

19 rent’ means, with respect to any eligible unit 

20 for any month, the lesser of— 

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

22 be charged for a substantially similar unit 

23 with the same number of bedrooms in the 

24 same building which is not an eligible unit, 

25 or 


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

2 rent standard for such unit. 

3 ‘‘(B) MARKET RENT STANDARD.— 

4 ‘‘(i) IN GENERAL.—The market rent 

5 standard with respect to any eligible unit 

6 is— 

7 ‘‘(I) the small area fair market 

8 rent determined by the Secretary of 

9 Housing and Urban Development for 

10 units with the same number of bed11 rooms in the same zip code tabulation 

12 area, or 

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

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

15 market rent determined by such Sec16 retary for units with the same number 

17 of bedrooms in the same county. 

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

19 its rental reduction allocation plan provide 

20 that the market rent standard for all (or 

21 any part) of a zip code tabulation area or 

22 county within the State shall be equal to a 

23 percentage (not less than 75 nor more 

24 than 125) of the amount determined under 


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

2 for such area or county. 

3 ‘‘(iii) MINIMUM AMOUNT.—Notwith4 standing clause (i), the market rent stand5 ard with respect to any eligible unit for 

6 any year in the credit period after the first 

7 year in the credit period for such unit shall 

8 not be less than the market rent standard 

9 determined for such first year. 

10 ‘‘(3) FAMILY RENTAL PAYMENT REQUIRE11 MENTS.— 

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

13 reduction agreement with respect to any quali14 fied building shall require that the family rental 

15 payment for an eligible unit within such build16 ing for any month shall be equal to the lesser 

17 of— 

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

19 income of the residents of the unit (as de20 termined under subsection (e)(5)), or 

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

22 ‘‘(B) UTILITY COSTS.—Any utility allow23 ance (determined by the Secretary in the same 

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

25 by residents of an eligible unit shall be taken 


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1 into account as rent in determining the family 

2 rental payment for such unit for purposes of 

3 this paragraph. 

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

5 purposes of this section— 

6 ‘‘(1) DETERMINATION OF AMOUNT.— 

7 ‘‘(A) IN GENERAL.—The term ‘rental re8 duction credit amount’ means, with respect to 

9 any qualified building, the dollar amount which 

10 is allocated to such building (and to eligible 

11 units within such building) under this sub12 section. Such dollar amount shall be allocated 

13 to months in the credit period with respect to 

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

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

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

17 the case of a project which includes (or will in18 clude) more than 1 building, the rental reduc19 tion credit amount shall be the dollar amount 

20 which is allocated to such project for all build21 ings included in such project. Subject to the 

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

23 amount shall be allocated among such buildings 

24 in the manner specified by the taxpayer unless 

25 the qualified rental reduction agreement with 


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1 respect to such project provides for such alloca2 tion. 

3 ‘‘(2) STATE ALLOCATION.— 

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

5 subparagraph (C), each rental reduction credit 

6 agency of a State shall each calendar year allo7 cate its portion of the State rental reduction 

8 credit ceiling to qualified buildings (and to eligi9 ble units within each such building) in accord10 ance with the State rental reduction allocation 

11 plan. 

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

13 The rental reduction credit amount allocated to 

14 any qualified building shall not exceed the ag15 gregate qualified rental reduction amounts 

16 which such agency estimates will occur over the 

17 credit period for eligible units within such 

18 building, based on reasonable estimates of 

19 rents, family incomes, and vacancies in accord20 ance with procedures established by the State 

21 as part of its State rental reduction allocation 

22 plan. 

23 ‘‘(C) SPECIFIC ALLOCATIONS.— 

24 ‘‘(i) NONPROFIT ORGANIZATIONS.—At 

25 least 25 percent of the State rental reducVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00110 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 tion credit ceiling for any State for any 

2 calendar year shall be allocated to qualified 

3 buildings in which a qualified nonprofit or4 ganization (as defined in section 

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

6 or more partnerships) an interest and ma7 terially participates (within the meaning of 

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

9 building throughout the credit period. A 

10 State may waive or lower the requirement 

11 under this clause for any calendar year if 

12 it determines that meeting such require13 ment is not feasible. 

14 ‘‘(ii) RURAL AREAS.— 

15 ‘‘(I) IN GENERAL.—The State 

16 rental reduction credit ceiling for any 

17 State for any calendar year shall be 

18 allocated to buildings in rural areas 

19 (as defined in section 520 of the 

20 Housing Act of 1949) in an amount 

21 which, as determined by the Secretary 

22 of Housing and Urban Development, 

23 bears the same ratio to such ceiling as 

24 the number of extremely low-income 

25 households with severe rent burdens 


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1 in such rural areas bears to the total 

2 number of such households in the 

3 State. 

4 ‘‘(II) ALTERNATIVE 5-YEAR

5 TESTING PERIOD.—In the case of the 

6 5-calendar year period beginning in 

7 2021, a State shall not be treated as 

8 failing to meet the requirements of 

9 subclause (I) for any calendar year in 

10 such period if, as determined by the 

11 Secretary, the average annual amount 

12 allocated to such rural areas during 

13 such period meets such requirements. 

14 ‘‘(3) APPLICATION OF ALLOCATED CREDIT

15 AMOUNT.— 

16 ‘‘(A) AMOUNT AVAILABLE TO TAXPAYER

17 FOR ALL MONTHS IN CREDIT PERIOD.—Any 

18 rental reduction credit amount allocated to any 

19 qualified building out of the State rental reduc20 tion credit ceiling for any calendar year shall 

21 apply to such building for all months in the 

22 credit period ending during or after such cal23 endar year. 

24 ‘‘(B) CEILING FOR ALLOCATION YEAR RE25 DUCED BY ENTIRE CREDIT AMOUNT.—Any 


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1 rental reduction credit amount allocated to any 

2 qualified building out of an allocating agency’s 

3 State rental reduction credit ceiling for any cal4 endar year shall reduce such ceiling for such 

5 calendar year by the entire amount so allocated 

6 for all months in the credit period (as deter7 mined on the basis of the estimates under para8 graph (2)(B)) and no reduction shall be made 

9 in such agency’s State rental reduction credit 

10 ceiling for any subsequent calendar year by rea11 son of such allocation. 

12 ‘‘(4) STATE RENTAL REDUCTION CREDIT CEIL13 ING.— 

14 ‘‘(A) IN GENERAL.—The State rental re15 duction credit ceiling applicable to any State for 

16 any calendar year shall be an amount equal to 

17 the sum of— 

18 ‘‘(i) the greater of— 

19 ‘‘(I) the per capita dollar amount 

20 multiplied by the State population, or 

21 ‘‘(II) the minimum ceiling 

22 amount, plus 

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

24 reduction credit ceiling returned in the cal25 endar year. 


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1 ‘‘(B) RETURN OF STATE CEILING

2 AMOUNTS.—For purposes of subparagraph 

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

4 the amount of the State rental reduction credit 

5 ceiling returned in a calendar year equals the 

6 amount of the rental reduction credit amount 

7 allocated to any building which, after the close 

8 of the calendar year for which the allocation is 

9 made— 

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

11 the rental reduction credit agency and the 

12 taxpayer because the estimates made under 

13 paragraph (2)(B) were substantially incor14 rect, or 

15 ‘‘(ii) is canceled by the rental reduc16 tion credit agency because the taxpayer 

17 violates the qualified rental reduction 

18 agreement and, under the terms of the 

19 agreement, the rental reduction credit 

20 agency is authorized to cancel all (or any 

21 portion) of the allocation by reason of the 

22 violation. 

23 ‘‘(C) PER CAPITA DOLLAR AMOUNT; MIN24 IMUM CEILING AMOUNT.—For purposes of this 

25 paragraph— 


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1 ‘‘(i) PER CAPITA DOLLAR AMOUNT.— 

2 The per capita dollar amount is— 

3 ‘‘(I) for calendar year 2021, 

4 $12.30, 

5 ‘‘(II) for calendar year 2022, 

6 $24.50, and 

7 ‘‘(III) for calendar years 2023 

8 and thereafter, $36.75. 

9 ‘‘(ii) MINIMUM CEILING AMOUNT.— 

10 The minimum ceiling amount is— 

11 ‘‘(I) for calendar year 2021, 

12 $14,000,000, 

13 ‘‘(II) for calendar year 2022, 

14 $28,000,000, and 

15 ‘‘(III) for calendar years 2023 

16 and thereafter, $42,000,000. 

17 ‘‘(iii) COST-OF-LIVING ADJUST18 MENT.—In the case of a calendar year be19 ginning after 2023, the $36.75 and 

20 $42,000,000 amounts in clauses (i)(III) 

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

22 amount equal to— 

23 ‘‘(I) such dollar amount, multi24 plied by 


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1 ‘‘(II) the cost-of-living adjust2 ment determined under section 1(f)(3) 

3 for such calendar year by substituting 

4 ‘calendar year 2022’ for ‘calendar 

5 year 2016’ in subparagraph (A)(ii) 

6 thereof. 

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

8 any increase under this clause which is not 

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

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

11 the case of the $36.75 amount, any in12 crease under this clause which is not a 

13 multiple of 5 cents shall be rounded to the 

14 next lowest multiple of 5 cents. 

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

16 paragraph, population shall be determined in 

17 accordance with section 146(j). 

18 ‘‘(E) UNUSED RENTAL REDUCTION CREDIT

19 ALLOCATED AMONG CERTAIN STATES.— 

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

21 reduction credit of a State for any cal22 endar year shall be assigned to the Sec23 retary for allocation among qualified 

24 States for the succeeding calendar year. 


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•S 2820 IS

1 ‘‘(ii) UNUSED RENTAL REDUCTION

2 CREDIT.—For purposes of this subpara3 graph, the unused rental reduction credit 

4 of a State for any calendar year is the ex5 cess (if any) of— 

6 ‘‘(I) the State rental reduction 

7 credit ceiling for the year preceding 

8 such year, over 

9 ‘‘(II) the aggregate rental reduc10 tion credit amounts allocated for such 

11 year. 

12 ‘‘(iii) FORMULA FOR ALLOCATION OF

13 UNUSED CREDIT AMONG QUALIFIED

14 STATES.—The amount allocated under this 

15 subparagraph to a qualified State for any 

16 calendar year shall be the amount deter17 mined by the Secretary to bear the same 

18 ratio to the aggregate unused rental reduc19 tion credits of all States for the preceding 

20 calendar year as such State’s population 

21 for the calendar year bears to the popu22 lation of all qualified States for the cal23 endar year. For purposes of the preceding 

24 sentence, population shall be determined in 

25 accordance with section 146(j). 


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1 ‘‘(iv) QUALIFIED STATE.—For pur2 poses of this subparagraph, the term 

3 ‘qualified State’ means, with respect to a 

4 calendar year, any State— 

5 ‘‘(I) which allocated its entire 

6 State rental reduction credit ceiling 

7 for the preceding calendar year, and 

8 ‘‘(II) for which a request is made 

9 (at such time and in such manner as 

10 the Secretary may prescribe) to re11 ceive an allocation under clause (iii). 

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

13 this section— 

14 ‘‘(A) RENTAL REDUCTION CREDIT AGEN15 CY.—The term ‘rental reduction credit agency’ 

16 means any agency authorized by a State to 

17 carry out this section. Such authorization shall 

18 include the jurisdictions within the State where 

19 the agency may allocate rental reduction credit 

20 amounts. 

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

22 The term ‘State’ includes a possession of the 

23 United States. 


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

2 same meaning as when used in the United 

3 States Housing Act of 1937. 

4 ‘‘(d) MODIFICATIONS TO CORRECT INACCURATE

5 AMOUNTS DUE TO INCORRECT ESTIMATES.— 

6 ‘‘(1) ESTABLISHMENT OF RESERVES.— 

7 ‘‘(A) IN GENERAL.—Each rental reduction 

8 credit agency of a State shall establish a reserve 

9 for the transfer and reallocation of amounts 

10 pursuant to this paragraph, and notwith11 standing any other provision of this section, the 

12 rental reduction credit amount allocated to any 

13 building by such agency shall be zero unless 

14 such agency has in effect such a reserve at the 

15 time of the allocation of such credit amount. 

16 ‘‘(B) TRANSFERS TO RESERVE.— 

17 ‘‘(i) IN GENERAL.—If, for any taxable 

18 year, a taxpayer would (but for this sub19 paragraph) not be able to use the entire 

20 rental reduction credit amount allocated to 

21 a qualified building by a rental reduction 

22 credit agency of a State for the taxable 

23 year because of a rental reduction short24 fall, then the taxpayer shall for the taxable 

25 year transfer to the reserve established by 


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•S 2820 IS

1 such agency under subparagraph (A) an 

2 amount equal to such rental reduction 

3 shortfall. 

4 ‘‘(ii) RENTAL REDUCTION SHORT5 FALL.—For purposes of this subpara6 graph, the rental reduction shortfall for 

7 any qualified building for any taxable year 

8 is the amount by which the aggregate 

9 amount of the excesses determined under 

10 subsection (b)(1) for all eligible units with11 in such building are less than such aggre12 gate amount estimated under subsection 

13 (c)(2)(B) for the taxable year. 

14 ‘‘(iii) TREATMENT OF TRANSFERRED

15 AMOUNT.—For purposes of subsection 

16 (a)(2)(A), the aggregate qualified rental 

17 reduction amounts for all eligible units 

18 within a qualified building with respect to 

19 which clause (i) applies for any taxable 

20 year shall be increased by an amount equal 

21 to the applicable percentage (determined 

22 under subsection (e)(1) for the building) of 

23 the amount of the transfer to the reserve 

24 under clause (i) with respect to such build25 ing for such taxable year. 


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1 ‘‘(C) REALLOCATION OF AMOUNTS TRANS2 FERRED.— 

3 ‘‘(i) IN GENERAL.—If, for any taxable 

4 year— 

5 ‘‘(I) the aggregate qualified rent6 al reduction amounts for all eligible 

7 units within a qualified building for 

8 the taxable year, exceed 

9 ‘‘(II) the rental reduction credit 

10 amount allocated to such building by 

11 a rental reduction credit agency of a 

12 State for the taxable year (determined 

13 after any increase under paragraph 

14 (2)), 

15 the rental reduction credit agency shall, 

16 upon application of the taxpayer, pay to 

17 the taxpayer from the reserve established 

18 by such agency under subparagraph (A) 

19 the amount which, when multiplied by the 

20 applicable percentage (determined under 

21 subsection (e)(1) for the building), equals 

22 such excess. If the amount in the reserve 

23 is less than the amounts requested by all 

24 taxpayers for taxable years ending within 

25 the same calendar year, the agency shall 


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•S 2820 IS

1 ratably reduce the amount of each pay2 ment otherwise required to be made. 

3 ‘‘(ii) EXCESS RESERVE AMOUNTS.—If 

4 a rental reduction credit agency of a State 

5 determines that the balance in its reserve 

6 is in excess of the amounts reasonably 

7 needed over the following 5 calendar years 

8 to make payments under clause (i), the 

9 agency may withdraw such excess but only 

10 to— 

11 ‘‘(I) reduce the rental payments 

12 of eligible tenants in a qualified build13 ing in units other than eligible units, 

14 or of eligible tenants in units in a 

15 building other than a qualified build16 ing, to amounts no higher than the 

17 sum of rental payments required for 

18 eligible tenants in qualified buildings 

19 under subsection (b)(3) and any rent20 al charges to such tenants in excess of 

21 the market rent standard; or 

22 ‘‘(II) address maintenance and 

23 repair needs in qualified buildings 

24 that cannot reasonably be met using 


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•S 2820 IS

1 other resources available to the own2 ers of such buildings. 

3 ‘‘(D) ADMINISTRATION.—Each rental re4 duction credit agency of a State shall establish 

5 procedures for the timing and manner of trans6 fers and payments made under this paragraph. 

7 ‘‘(E) SPECIAL RULE FOR PROJECTS.—In 

8 the case of a rental reduction credit allocated to 

9 a project consisting of more than 1 qualified 

10 building, a taxpayer may elect to have this 

11 paragraph apply as if all such buildings were 1 

12 qualified building if the applicable percentage 

13 for each such building is the same. 

14 ‘‘(F) ALTERNATIVE METHODS OF TRANS15 FER AND REALLOCATION.—Upon request to, 

16 and approval by, the Secretary, a State may es17 tablish an alternative method for the transfer 

18 and reallocation of amounts otherwise required 

19 to be transferred to, and allocated from, a re20 serve under this paragraph. Any State adopting 

21 an alternative method under this subparagraph 

22 shall, at such time and in such manner as the 

23 Secretary prescribes, provide to the Secretary 

24 and the Secretary of Housing and Urban Devel25 opment detailed reports on the operation of 


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•S 2820 IS

1 such method, including providing such informa2 tion as such Secretaries may require. 

3 ‘‘(2) ALLOCATION OF RETURNED STATE CEIL4 ING AMOUNTS.—In the case of any rental reduction 

5 credit amount allocated to a qualified building which 

6 is canceled as provided in subsection (c)(4)(B)(i), 

7 the rental reduction credit agency may, in lieu of 

8 treating such allocation as a returned credit amount 

9 under subsection (c)(4)(A)(ii), elect to allocate, upon 

10 the request of the taxpayer, such amount to any 

11 other qualified building for which the credit amount 

12 allocated in any preceding calendar year was too 

13 small because the estimates made under subsection 

14 (c)(2)(B) were substantially incorrect. 

15 ‘‘(3) RENTING TO NONELIGIBLE TENANTS.—If, 

16 after the application of paragraphs (1)(C) (or any 

17 similar reallocation under paragraph (1)(F)) and 

18 (2), a rental reduction credit agency of a State de19 termines that, because of the incorrect estimates 

20 under subsection (c)(2)(B), the aggregate qualified 

21 rental reduction amounts for all eligible units within 

22 a qualified building will (on an ongoing basis) exceed 

23 the rental reduction credit amount allocated to such 

24 building, a taxpayer may elect, subject to subsection 

25 (g)(2) and only to the extent necessary to eliminate 


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•S 2820 IS

1 such excess, rent vacant eligible units without regard 

2 to the requirements that such units be rented only 

3 to eligible tenants and at the rental rate determined 

4 under subsection (b)(3). 

5 ‘‘(e) TERMS RELATING TO RENTAL REDUCTION

6 CREDIT AND REQUIREMENTS.—For purposes of this sec7 tion— 

8 ‘‘(1) APPLICABLE PERCENTAGE.— 

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

10 percentage’ means, with respect to any qualified 

11 building, the percentage (not greater than 110 

12 percent) set by the rental reduction credit agen13 cy at the time it allocates the rental reduction 

14 dollar amount to such building. 

15 ‘‘(B) HIGHER PERCENTAGE FOR HIGH-OP16 PORTUNITY AREAS.—The rental reduction cred17 it agency may set a percentage under subpara18 graph (A) up to 120 percent for any qualified 

19 building which— 

20 ‘‘(i) targets its eligible units for rental 

21 to families with children, and 

22 ‘‘(ii) is located in a neighborhood 

23 which has a poverty rate of no more than 

24 10 percent. 

25 ‘‘(2) CREDIT PERIOD.— 


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1 ‘‘(A) IN GENERAL.—The term ‘credit pe2 riod’ means, with respect to any qualified build3 ing, the 15-year period beginning with the first 

4 month for which the qualified rental reduction 

5 agreement is in effect with respect to such 

6 building. 

7 ‘‘(B) STATE OPTION TO REDUCE PE8 RIOD.—A rental reduction credit agency may 

9 provide a credit period for any qualified build10 ing which is less than 15 years. 

11 ‘‘(3) ELIGIBLE UNIT.— 

12 ‘‘(A) IN GENERAL.—The term ‘eligible 

13 unit’ means, with respect to any qualified build14 ing, a unit— 

15 ‘‘(i) which is occupied by an eligible 

16 tenant, 

17 ‘‘(ii) the rent of which for any month 

18 equals 30 percent of the monthly family in19 come of the residents of such unit (as de20 termined under paragraph (5)), 

21 ‘‘(iii) with respect to which the tenant 

22 is not concurrently receiving rental assist23 ance under any other Federal program, 

24 and 


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1 ‘‘(iv) which is certified to the rental 

2 reduction credit agency as an eligible unit 

3 for purposes of this section and the quali4 fied rental reduction agreement. 

5 Notwithstanding clause (iii), a State may pro6 vide in its State rental reduction allocation plan 

7 that an eligible unit shall also not include a unit 

8 with respect to which any resident is receiving 

9 rental assistance under a State or local pro10 gram. 

11 ‘‘(B) LIMITATION ON NUMBER OF

12 UNITS.— 

13 ‘‘(i) IN GENERAL.—The number of 

14 units which may be certified as eligible 

15 units with respect to any qualified building 

16 under subparagraph (A)(iv) at any time 

17 shall not exceed the greater of— 

18 ‘‘(I) 40 percent of the total units 

19 in such building, or 

20 ‘‘(II) 25 units. 

21 In the case of an allocation to a project 

22 under subsection (c)(1)(B), the limitation 

23 under the preceding sentence shall be ap24 plied on a project basis and the certifi25 cation of such eligible units shall be alloVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00127 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 cated to each building in the project, ex2 cept that if buildings in such project are 

3 on non-contiguous tracts of land, buildings 

4 on each such tract shall be treated as a 

5 separate project for purposes of applying 

6 this sentence. 

7 ‘‘(ii) BUILDINGS RECEIVING PREVIOUS

8 FEDERAL RENTAL ASSISTANCE.—If, at any 

9 time prior to the entering into of a quali10 fied rental reduction agreement with re11 spect to a qualified building, tenants in 

12 units within such building had been receiv13 ing project-based rental assistance under 

14 any other Federal program, then, notwith15 standing clause (i), the maximum number 

16 of units which may be certified as eligible 

17 units with respect to the building under 

18 subparagraph (A)(iv) shall not be less than 

19 the sum of— 

20 ‘‘(I) the maximum number of 

21 units in the building previously receiv22 ing such assistance at any time before 

23 the agreement takes effect, plus 

24 ‘‘(II) the amount determined 

25 under clause (i) without taking into 


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1 account the units described in sub2 clause (I). 

3 ‘‘(4) ELIGIBLE TENANT.— 

4 ‘‘(A) IN GENERAL.—The term ‘eligible ten5 ant’ means any individual if the individual’s 

6 family income does not exceed the greater of— 

7 ‘‘(i) 30 percent of the area median 

8 gross income (as determined under section 

9 42(g)(1)), or 

10 ‘‘(ii) the applicable poverty line for a 

11 family of the size involved. 

12 ‘‘(B) TREATMENT OF INDIVIDUALS WHOSE

13 INCOMES RISE ABOVE LIMIT.— 

14 ‘‘(i) IN GENERAL.—Notwithstanding 

15 an increase in the family income of resi16 dents of a unit above the income limitation 

17 applicable under subparagraph (A), such 

18 residents shall continue to be treated as el19 igible tenants if the family income of such 

20 residents initially met such income limita21 tion and such unit continues to be certified 

22 as an eligible unit under this section. 

23 ‘‘(ii) NO RENTAL REDUCTION FOR AT

24 LEAST 2 YEARS.—A qualified rental reduc25 tion agreement with respect to a qualified 


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1 building shall provide that if, by reason of 

2 an increase in family income described in 

3 clause (i), there is no qualified rental re4 duction amount with respect to the dwell5 ing unit for 2 consecutive years, the tax6 payer shall rent the next available unit to 

7 an eligible tenant (without regard to 

8 whether such unit is an eligible unit under 

9 this section). 

10 ‘‘(C) APPLICABLE POVERTY LINE.—The 

11 term ‘applicable poverty line’ means the most 

12 recently published poverty line (within the 

13 meaning of section 2110(c)(5) of the Social Se14 curity Act (42 U.S.C. 1397jj(c)(5))) as of the 

15 time of the determination as to whether an in16 dividual is an eligible tenant. 

17 ‘‘(5) FAMILY INCOME.— 

18 ‘‘(A) IN GENERAL.—Family income shall 

19 be determined in the same manner as under 

20 section 8 of the United States Housing Act of 

21 1937. 

22 ‘‘(B) TIME FOR DETERMINING INCOME.— 

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in this subparagraph, family income 

25 shall be determined at least annually on 


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1 the basis of income for the preceding cal2 endar year. 

3 ‘‘(ii) FAMILIES ON FIXED INCOME.—If 

4 at least 90 percent of the family income of 

5 the residents of a unit at the time of any 

6 determination under clause (i) is derived 

7 from payments under title II or XVI of the 

8 Social Security Act (or any similar fixed 

9 income amounts specified by the Sec10 retary), the taxpayer may elect to treat 

11 such payments (or amounts) as the family 

12 income of such residents for the year of 

13 the determination and the 2 succeeding 

14 years, except that the taxpayer shall, in 

15 such manner as the Secretary may pre16 scribe, adjust such amount for increases in 

17 the cost of living. 

18 ‘‘(iii) INITIAL INCOME.—The Sec19 retary may allow a State to provide that 

20 the family income of residents at the time 

21 such residents first rent a unit in a quali22 fied building may be determined on the 

23 basis of current or anticipated income. 

24 ‘‘(iv) SPECIAL RULES WHERE FAMILY

25 INCOME IS REDUCED.—If residents of a 


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1 unit establish (in such manner as the rent2 al reduction credit agency provides) that 

3 their family income has been reduced by at 

4 least 10 percent below such income for the 

5 determination year— 

6 ‘‘(I) such residents may elect, at 

7 such time and in such manner as such 

8 agency may prescribe, to have their 

9 family income redetermined, and 

10 ‘‘(II) clause (ii) shall not apply to 

11 any of the 2 succeeding years de12 scribed in such clause which are speci13 fied in the election. 

14 ‘‘(f) STATE RENTAL REDUCTION ALLOCATION

15 PLAN.— 

16 ‘‘(1) ADOPTION OF PLAN REQUIRED.— 

17 ‘‘(A) IN GENERAL.—For purposes of this 

18 section— 

19 ‘‘(i) each State shall, before the allo20 cation of its State rental reduction credit 

21 ceiling, establish and have in effect a State 

22 rental reduction allocation plan, and 

23 ‘‘(ii) notwithstanding any other provi24 sion of this section, the rental reduction 

25 credit amount allocated to any building 


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1 shall be zero unless such amount was allo2 cated pursuant to a State rental reduction 

3 allocation plan. 

4 Such plan shall only be adopted after such plan 

5 is made public and at least 60 days has been 

6 allowed for public comment. 

7 ‘‘(B) STATE RENTAL REDUCTION ALLOCA8 TION PLAN.—For purposes of this section, the 

9 term ‘State rental reduction allocation plan’ 

10 means, with respect to any State, any plan of 

11 the State meeting the requirements of para12 graphs (2) and (3). 

13 ‘‘(2) GENERAL PLAN REQUIREMENTS.—A plan 

14 shall meet the requirements of this paragraph only 

15 if— 

16 ‘‘(A) the plan sets forth the criteria and 

17 priorities which a rental reduction credit agency 

18 of the State shall use in allocating the State 

19 rental reduction credit ceiling to eligible units 

20 within a building, 

21 ‘‘(B) the plan provides that no credit allo22 cation shall be made which is not in accordance 

23 with the criteria and priorities set forth under 

24 subparagraph (A) unless such agency provides 

25 a written explanation to the general public for 


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1 any credit allocation which is not so made and 

2 the reasons why such allocation is necessary, 

3 and 

4 ‘‘(C) the plan provides that such agency is 

5 required to prioritize the renewal of existing 

6 credit allocations at the time of the expiration 

7 of the qualified rental reduction agreement with 

8 respect to the allocation, including, where ap9 propriate, a commitment within a qualified 

10 rental reduction agreement that the credit allo11 cation will be renewed if the terms of the agree12 ment have been met and sufficient new credit 

13 authority is available. 

14 ‘‘(3) SPECIFIC REQUIREMENTS.—A plan shall 

15 meet the requirements of this paragraph only if— 

16 ‘‘(A) the plan provides methods for deter17 mining— 

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

19 be charged for a substantially similar unit 

20 in the same building which is not an eligi21 ble unit for purposes of subsection 

22 (b)(2)(A)(i), including whether such deter23 mination may be made by self-certification 

24 or by undertaking rent reasonableness as25 sessments similar to assessments required 


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•S 2820 IS

1 under section 8(o)(10) of the United 

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

3 1437f(o)(10)), 

4 ‘‘(ii) the qualified rental reduction 

5 amounts under subsection (c)(2)(B), and 

6 ‘‘(iii) the applicable percentage under 

7 subsection (e)(1), 

8 ‘‘(B) the plan provides a procedure that 

9 the rental reduction credit agency (or an agent 

10 or other private contractor of such agency) will 

11 follow in monitoring for— 

12 ‘‘(i) noncompliance with the provisions 

13 of this section and the qualified rental re14 duction agreement and in notifying the In15 ternal Revenue Service of any such non16 compliance of which such agency becomes 

17 aware, and 

18 ‘‘(ii) noncompliance with habitability 

19 standards through regular site visits, 

20 ‘‘(C) the plan requires a person receiving a 

21 credit allocation to report to the rental reduc22 tion credit agency such information as is nec23 essary to ensure compliance with the provisions 

24 of this section and the qualified rental reduction 

25 agreement, and 


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1 ‘‘(D) the plan provides methods by which 

2 any excess reserve amounts which become avail3 able under subsection (d)(1)(C)(ii) will be used 

4 to reduce rental payments of eligible tenants or 

5 to address maintenance and repair needs in 

6 qualified buildings, including how such assist7 ance will be allocated among eligible tenants 

8 and qualified buildings. 

9 ‘‘(g) QUALIFIED RENTAL REDUCTION AGREE10 MENT.—For purposes of this section— 

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

12 reduction agreement’ means, with respect to any 

13 building which is residential rental property (as de14 fined in section 168(e)(2)(A)), a written, binding 

15 agreement between a rental reduction credit agency 

16 and the taxpayer which specifies— 

17 ‘‘(A) the number of eligible units within 

18 such building for which a rental reduction cred19 it amount is being allocated, 

20 ‘‘(B) the credit period for such building, 

21 ‘‘(C) the rental reduction credit amount al22 located to such building (and dwelling units 

23 within such building) and the portion of such 

24 amount allocated to each month within the 

25 credit period under subsection (c)(2)(B), 


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1 ‘‘(D) the applicable percentage to be used 

2 in computing the qualified rental reduction 

3 amounts with respect to the building, 

4 ‘‘(E) the method for determining the 

5 amount of rent which may be charged for eligi6 ble units within the building, and 

7 ‘‘(F) whether— 

8 ‘‘(i) the agency commits to entering 

9 into a new agreement with the taxpayer if 

10 the terms of the agreement have been met 

11 and sufficient new credit authority is avail12 able for such new agreement, and 

13 ‘‘(ii) the taxpayer is required to accept 

14 such new agreement. 

15 ‘‘(2) TENANT PROTECTIONS.—A qualified rent16 al reduction agreement shall provide the following: 

17 ‘‘(A) NON-DISPLACEMENT OF NON-ELIGI18 BLE TENANTS.—A taxpayer receiving a rental 

19 reduction credit amount may not refuse to 

20 renew the lease of or evict (other than for good 

21 cause) a tenant of a unit who is not an eligible 

22 tenant at any time during the credit period and 

23 such unit shall not be treated as an eligible unit 

24 while such tenant resides there. 


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1 ‘‘(B) ONLY GOOD CAUSE EVICTIONS OF

2 ELIGIBLE TENANTS.—A taxpayer receiving a 

3 rental reduction credit amount may not refuse 

4 to renew the lease of or evict (other than for 

5 good cause) an eligible tenant of an eligible 

6 unit. 

7 ‘‘(C) MOBILITY.—A taxpayer receiving a 

8 rental reduction credit amount shall— 

9 ‘‘(i) give priority to rent any available 

10 unit of suitable size to tenants who are eli11 gible tenants who are moving from another 

12 qualified building where such tenants had 

13 lived at least 1 year and were in good 

14 standing, and 

15 ‘‘(ii) inform eligible tenants within the 

16 building of their right to move after 1 year 

17 and provide a list maintained by the State 

18 of qualified buildings where such tenants 

19 might move. 

20 ‘‘(iii) FAIR HOUSING AND CIVIL

21 RIGHTS.—If a taxpayer receives a rental 

22 reduction credit amount— 

23 ‘‘(I) such taxpayer shall comply 

24 with the Fair Housing Act with re25 spect to the building, and 


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•S 2820 IS

1 ‘‘(II) the receipt of such amount 

2 shall be treated as the receipt of Fed3 eral financial assistance for purposes 

4 of applying any Federal civil rights 

5 laws. 

6 ‘‘(iv) ADMISSIONS PREFERENCES.—A 

7 taxpayer receiving a rental reduction credit 

8 amount shall comply with any admissions 

9 preferences established by the State for 

10 tenants within particular demographic 

11 groups eligible for health or social services. 

12 ‘‘(3) COMPLIANCE REQUIREMENTS.—A quali13 fied rental reduction agreement shall provide that a 

14 taxpayer receiving a rental reduction credit amount 

15 shall comply with all reporting and other procedures 

16 established by the State to ensure compliance with 

17 this section and such agreement. 

18 ‘‘(4) PROJECTS.—In the case of a rental reduc19 tion credit allocated to a project consisting of more 

20 than 1 building, the rental reduction credit agency 

21 may provide for a single qualified rental reduction 

22 agreement which applies to all buildings which are 

23 part of such project. 

24 ‘‘(h) CERTIFICATIONS AND OTHER REPORTS TO SEC25 RETARY.— 


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

2 YEAR OF CREDIT PERIOD.—Following the close of 

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

4 to any qualified building, the taxpayer shall certify 

5 to the Secretary (at such time and in such form and 

6 in such manner as the Secretary prescribes)— 

7 ‘‘(A) the information described in sub8 section (g)(1) required to be contained in the 

9 qualified rental reduction agreement with re10 spect to the building, and 

11 ‘‘(B) such other information as the Sec12 retary may require. 

13 In the case of a failure to make the certification re14 quired by the preceding sentence on the date pre15 scribed therefor, unless it is shown that such failure 

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

17 no credit shall be allowable by reason of subsection 

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

19 year ending before such certification is made. 

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

21 The Secretary may require taxpayers to submit an 

22 information return (at such time and in such form 

23 and manner as the Secretary prescribes) for each 

24 taxable year setting forth— 


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1 ‘‘(A) the information described in para2 graph (1)(A) for the taxable year, and 

3 ‘‘(B) such other information as the Sec4 retary may require. 

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

6 failure to submit the return required by the Sec7 retary under the preceding sentence on the date pre8 scribed therefor. 

9 ‘‘(3) ANNUAL REPORTS FROM RENTAL REDUC10 TION CREDIT AGENCY.— 

11 ‘‘(A) REPORTS.—Each rental reduction 

12 credit agency which allocates any rental reduc13 tion credit amount to 1 or more buildings for 

14 any calendar year shall submit to the Secretary 

15 (at such time and in such manner as the Sec16 retary shall prescribe) an annual report speci17 fying— 

18 ‘‘(i) the amount of rental reduction 

19 credit amounts allocated to each such 

20 building for such year, 

21 ‘‘(ii) sufficient information to identify 

22 each such building and the taxpayer with 

23 respect thereto, 

24 ‘‘(iii) information as to the demo25 graphic and income characteristics of eligiVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00141 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 ble tenants of all such buildings to which 

2 such amounts were allocated, and 

3 ‘‘(iv) such other information as the 

4 Secretary may require. 

5 ‘‘(B) PENALTY.—The penalty under sec6 tion 6652(j) shall apply to any failure to submit 

7 the report required by subparagraph (A) on the 

8 date prescribed therefor. 

9 ‘‘(C) INFORMATION MADE PUBLIC.—The 

10 Secretary shall, in consultation with Secretary 

11 of Housing and Urban Development, make in12 formation reported under this paragraph for 

13 each qualified building available to the public 

14 annually to the greatest degree possible without 

15 disclosing personal information about individual 

16 tenants. 

17 ‘‘(i) SPECIAL RULE FOR PAYMENTS TO PARTNER18 SHIPS AND S CORPORATIONS.—For purposes of this sub19 title, in the case of any qualified building directly held by 

20 any partnership or S corporation, the payment under sec21 tion 6433 shall be made in lieu of the credit determined 

22 under this section with respect to such building. 

23 ‘‘(j) REGULATIONS AND GUIDANCE.—The Secretary 

24 shall prescribe such regulations or guidance as may be 


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•S 2820 IS

1 necessary to carry out the purposes of this section, includ2 ing— 

3 ‘‘(1) providing necessary forms and instruc4 tions, and 

5 ‘‘(2) providing for proper treatment of projects 

6 for which a credit is allowed both under this section 

7 and section 42.’’. 

8 (b) PAYMENT TO PARTNERSHIPS AND S CORPORA9 TIONS IN LIEU OF CREDIT.— 

10 (1) IN GENERAL.—Subchapter B of chapter 65 

11 of the Internal Revenue Code of 1986 is amended by 

12 adding at the end the following new section: 

13 ‘‘SEC. 6433. PAYMENTS IN LIEU OF RENTERS CREDIT FOR 

14 PARTNERSHIPS AND S CORPORATIONS. 

15 ‘‘(a) IN GENERAL.—In the case of any qualified 

16 building (as defined in section 36C(a)(3)) directly held by 

17 any partnership or S corporation, the Secretary shall pay 

18 to such partnership or S corporation for any taxable year 

19 an amount equal to the amount of the credit which, but 

20 for section 36C(i), would be allowed under section 36C 

21 with respect to such building. 

22 ‘‘(b) REGULATORY AUTHORITY.—The Secretary shall 

23 prescribe such regulations, rules, and guidance as may be 

24 necessary to carry out section 36C(i), section 92, and this 


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•S 2820 IS

1 section, including regulations, rules, and guidance pro2 viding for— 

3 ‘‘(1) the application of the rules under section 

4 36C with respect to payments under this section in 

5 the same manner as such rules apply for purposes 

6 of the credit under section 36C, 

7 ‘‘(2) the time and manner of payments under 

8 subsection (a), and 

9 ‘‘(3) the determination of a partner’s distribu10 tive share, or an S corporation shareholder’s pro 

11 rata share, of any payment under subsection (a).’’. 

12 (2) CONFORMING AMENDMENT.—The table of 

13 sections for subchapter B of chapter 65 of the Inter14 nal Revenue Code of 1986 is amended by adding at 

15 the end the following new item: 

‘‘Sec. 6433. Payments in lieu of renters credit for partnerships and S corporations.’’. 

16 (c) CREDIT INCLUDIBLE IN GROSS INCOME.— 

17 (1) IN GENERAL.—Part II of subchapter B of 

18 chapter 1 of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following new sec20 tion: 

21 ‘‘SEC. 92. INCLUSION IN INCOME OF RENTERS CREDIT AND 

22 PAYMENTS. 

23 ‘‘Gross income includes the amount of the credit al24 lowed to the taxpayer under section 36C for the taxable 


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•S 2820 IS

1 year and the amount of any payment in lieu of such credit 

2 under section 6433.’’. 

3 (2) INCOME DISREGARDED FOR ALTERNATIVE

4 MINIMUM TAXABLE INCOME.—Section 56(a) of such 

5 Code is amended by adding at the end the following: 

6 ‘‘(8) SECTION 92 NOT APPLICABLE.—Section 92 

7 (relating to inclusion in income of renters credit) 

8 shall not apply.’’. 

9 (3) CONFORMING AMENDMENT.—The table of 

10 sections for part II of subchapter B of chapter 1 of 

11 such Code is amended by adding at the end the fol12 lowing new item: 

‘‘Sec. 92. Inclusion in income of renters credit and payments.’’. 

13 (d) ADMINISTRATIVE FEES.—No provision of, or 

14 amendment made by, this Act shall be construed to pre15 vent a rental reduction credit agency of a State from im16 posing fees to cover its costs or from levying any such fee 

17 on a taxpayer applying for or receiving a rental reduction 

18 credit amount. 

19 (e) OTHER CONFORMING AMENDMENTS.— 

20 (1) Section 6211(b)(4) of the Internal Revenue 

21 Code of 1986 is amended by inserting ‘‘36C (includ22 ing any related payment under section 6433),’’ after 

23 ‘‘36B,’’. 

24 (2) Paragraph (2) of section 1324(b) of title 

25 31, United States Code, is amended by inserting 


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•S 2820 IS

1 ‘‘36C (including any related payment under section 

2 6433),’’ after ‘‘36B,’’. 

3 (3) The table of sections for subpart C of part 

4 IV of subchapter A of chapter 1 of the Internal Rev5 enue Code of 1986 is amended by inserting after the 

6 item relating to section 36B the following new item: 

‘‘Sec. 36C. Renters credit.’’. 

7 (f) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 December 31, 2020. 

10 SEC. 216. MIDDLE-INCOME HOUSING TAX CREDIT. 

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

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

15 ‘‘SEC. 42A. MIDDLE-INCOME HOUSING CREDIT. 

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

17 amount of the middle-income housing credit determined 

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

19 shall be an amount equal to— 

20 ‘‘(1) the applicable percentage, of 

21 ‘‘(2) the qualified basis of each qualified mid22 dle-income building. 

23 ‘‘(b) APPLICABLE PERCENTAGE.— 

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


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•S 2820 IS

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

2 percentage’ means, with respect to any building, 

3 the appropriate percentage prescribed by the 

4 Secretary for the earlier of— 

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

6 is placed in service, or 

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

8 the month in which the taxpayer and the 

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

11 is binding on such agency, the taxpayer, 

12 and all successors in interest) as to the 

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

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

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

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

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

22 will yield over a 15-year period amounts of 

23 credit under subsection (a) which have a 

24 present value equal to— 


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•S 2820 IS

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

2 of a new building which is not Federally 

3 subsidized for the taxable year, and 

4 ‘‘(ii) 20 percent of the qualified basis 

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

6 ‘‘(C) METHOD OF DISCOUNTING.—The 

7 present value under subparagraph (B) shall be 

8 determined— 

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

10 of the 15-year period referred to in sub11 paragraph (B), 

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

13 72 percent of the average of the annual 

14 Federal mid-term rate and the annual 

15 Federal long-term rate applicable under 

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

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

18 (A) and compounded annually, and 

19 ‘‘(iii) by assuming that the credit al20 lowable under this section for any year is 

21 received on the last day of such year. 

22 ‘‘(2) MINIMUM CREDIT RATE.— 

23 ‘‘(A) IN GENERAL.—The applicable per24 centage for any building which is not Federally 


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•S 2820 IS

1 subsidized for the taxable year shall not be less 

2 than 5 percent. 

3 ‘‘(B) MINIMUM CREDIT RATE FOR FEDER4 ALLY SUBSIDIZED BUILDINGS.—In the case of 

5 any building to which subparagraph (A) does 

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

7 the applicable percentage shall not be less than 

8 2 percent. 

9 ‘‘(3) EXCEPTION FOR CERTAIN FEDERALLY

10 SUBSIDIZED BUILDINGS.—In the case of any build11 ing to which paragraph (2)(A) does not apply, the 

12 applicable percentage is zero unless— 

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

14 with respect to such building for the taxable 

15 year, and 

16 ‘‘(B) such building is financed by tax-ex17 empt bonds as described in section 42(h)(4). 

18 ‘‘(4) CROSS REFERENCES.— 

19 ‘‘(A) For treatment of certain rehabilita20 tion expenditures as separate new buildings, see 

21 subsection (e). 

22 ‘‘(B) For determination of applicable per23 centage for increases in qualified basis after the 

24 1st year of the credit period, see subsection 

25 (f)(3). 


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•S 2820 IS

1 ‘‘(C) For authority of housing credit agen2 cy to limit applicable percentage and qualified 

3 basis which may be taken into account under 

4 this section with respect to any building, see 

5 subsection (h)(6). 

6 ‘‘(c) QUALIFIED BASIS; QUALIFIED MIDDLE-INCOME

7 BUILDING.—For purposes of this section— 

8 ‘‘(1) QUALIFIED BASIS.— 

9 ‘‘(A) DETERMINATION.—The qualified 

10 basis of any qualified middle-income building 

11 for any taxable year is an amount equal to— 

12 ‘‘(i) the applicable fraction (deter13 mined as of the close of such taxable year) 

14 of 

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

16 (determined under subsection (d)). 

17 ‘‘(B) APPLICABLE FRACTION.—For pur18 poses of subparagraph (A), the term ‘applicable 

19 fraction’ means the smaller of the unit fraction 

20 or the floor space fraction. 

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

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

23 means the fraction— 


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•S 2820 IS

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

2 number of middle-income units in the 

3 building, and 

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

5 number of residential rental units (whether 

6 or not occupied) in such building. 

7 ‘‘(D) FLOOR SPACE FRACTION.—For pur8 poses of subparagraph (B), the term ‘floor 

9 space fraction’ means the fraction— 

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

11 total floor space of the middle-income units 

12 in such building, and 

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

14 total floor space of the residential rental 

15 units (whether or not occupied) in such 

16 building. 

17 ‘‘(2) QUALIFIED MIDDLE-INCOME BUILDING.— 

18 The term ‘qualified middle-income building’ means 

19 any building which is part of a qualified middle-in20 come housing project at all times during the pe21 riod— 

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

23 period on which such building is part of such a 

24 project, and 


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

2 period with respect to such building. 

3 ‘‘(d) ELIGIBLE BASIS.—For purposes of this sec4 tion— 

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

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

7 the 1st taxable year of the credit period. 

8 ‘‘(2) EXISTING BUILDINGS.— 

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

10 an existing building is— 

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

12 meets the requirements of subparagraph 

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

14 the 1st taxable year of the credit period, 

15 and 

16 ‘‘(ii) zero in any other case. 

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

18 the requirements of this subparagraph if— 

19 ‘‘(i) the building is acquired by pur20 chase (as defined in section 179(d)(2)), 

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

22 years between the date of its acquisition by 

23 the taxpayer and the date the building was 

24 last placed in service, 


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1 ‘‘(iii) the building was not previously 

2 placed in service by the taxpayer or by any 

3 person who was a related person with re4 spect to the taxpayer as of the time pre5 viously placed in service, and 

6 ‘‘(iv) except as provided in subsection 

7 (f)(5), a credit is allowable under sub8 section (a) by reason of subsection (e) with 

9 respect to the building. 

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

11 subparagraph (A), the adjusted basis of any 

12 building shall not include so much of the basis 

13 of such building as is determined by reference 

14 to the basis of other property held at any time 

15 by the person acquiring the building. 

16 ‘‘(D) SPECIAL RULES.— 

17 ‘‘(i) SPECIAL RULES FOR CERTAIN

18 TRANSFERS.—For purposes of determining 

19 under subparagraph (B)(ii) when a build20 ing was last placed in service, there shall 

21 not be taken into account any placement in 

22 service— 

23 ‘‘(I) in connection with the acqui24 sition of the building in a transaction 

25 in which the basis of the building in 


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•S 2820 IS

1 the hands of the person acquiring it is 

2 determined in whole or in part by ref3 erence to the adjusted basis of such 

4 building in the hands of the person 

5 from whom acquired, 

6 ‘‘(II) by a person whose basis in 

7 such building is determined under sec8 tion 1014(a) (relating to property ac9 quired from a decedent), 

10 ‘‘(III) by any governmental unit 

11 or qualified nonprofit organization if 

12 the requirements of subparagraph 

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

14 placement in service by such unit or 

15 organization and all the income from 

16 such property is exempt from Federal 

17 income taxation, 

18 ‘‘(IV) by any person who ac19 quired such building by foreclosure 

20 (or by instrument in lieu of fore21 closure) of any purchase-money secu22 rity interest held by such person if the 

23 requirements of subparagraph (B)(ii) 

24 are met with respect to the placement 

25 in service by such person and such 


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1 building is resold within 12 months 

2 after the date such building is placed 

3 in service by such person after such 

4 foreclosure, or 

5 ‘‘(V) of a single-family residence 

6 by any individual who owned and used 

7 such residence for no other purpose 

8 than as his principal residence. 

9 ‘‘(ii) RELATED PERSON.—For pur10 poses of subparagraph (B)(iii), a person 

11 (hereinafter in this subclause referred to as 

12 the ‘related person’) is related to any per13 son if the related person bears a relation14 ship to such person specified in section 

15 267(b) or 707(b)(1), or the related person 

16 and such person are engaged in trades or 

17 businesses under common control (within 

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

19 section 52). 

20 ‘‘(3) SPECIAL RULES RELATING TO DETER21 MINATION OF ADJUSTED BASIS.—For purposes of 

22 this subsection— 

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

24 subparagraph (B), the adjusted basis of any 

25 building shall be determined without regard to 


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1 the adjusted basis of any property which is not 

2 residential rental property. 

3 ‘‘(B) BASIS OF PROPERTY IN COMMON

4 AREAS, ETC., INCLUDED.— 

5 ‘‘(i) IN GENERAL.—Except as pro6 vided in clause (ii), the adjusted basis of 

7 any building shall be determined by taking 

8 into account the adjusted basis of property 

9 (of a character subject to the allowance for 

10 depreciation) used in common areas or 

11 provided as comparable amenities to all 

12 residential rental units in such building. 

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

14 any building for which the low-income 

15 housing tax credit is allowable under sec16 tion 42, the adjusted basis of the building 

17 under this section shall be determined 

18 without regard to property used in com19 mon areas or provided as comparable 

20 amenities to all residential rental units in 

21 such building. 

22 ‘‘(C) NO REDUCTION FOR DEPRECIA23 TION.—The adjusted basis of any building shall 

24 be determined without regard to paragraphs (2) 

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


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1 ‘‘(4) FEDERAL GRANTS NOT TAKEN INTO AC2 COUNT IN DETERMINING ELIGIBLE BASIS.—The eli3 gible basis of a building shall not include any costs 

4 financed with the proceeds of a Federally funded 

5 grant. 

6 ‘‘(5) CREDIT ALLOWABLE FOR CERTAIN BUILD7 INGS ACQUIRED DURING 10-YEAR PERIOD.—On ap8 plication by the taxpayer, the Secretary may waive 

9 paragraph (2)(B)(ii) with respect to any building ac10 quired from an insured depository institution in de11 fault (as defined in section 3 of the Federal Deposit 

12 Insurance Act) or from a receiver or conservator of 

13 such an institution. 

14 ‘‘(6) ACQUISITION OF BUILDING BEFORE END

15 OF PRIOR CREDIT PERIOD.— 

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

17 prescribed by the Secretary, in the case of a 

18 building described in subparagraph (B) (or in19 terest therein) which is acquired by the tax20 payer— 

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

22 but 

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

24 subsection (a) to the taxpayer for any pe25 riod after such acquisition shall be equal to 


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1 the amount of credit which would have 

2 been allowable under subsection (a) for 

3 such period to the prior owner referred to 

4 in subparagraph (B) had such owner not 

5 disposed of the building. 

6 ‘‘(B) DESCRIPTION OF BUILDING.—A 

7 building is described in this subparagraph if— 

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

9 subsection (a) to any prior owner of such 

10 building, and 

11 ‘‘(ii) the taxpayer acquired such build12 ing before the end of the credit period for 

13 such building with respect to such prior 

14 owner (determined without regard to any 

15 disposition by such prior owner). 

16 ‘‘(e) REHABILITATION EXPENDITURES TREATED AS

17 SEPARATE NEW BUILDING.— 

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

19 paid or incurred by the taxpayer with respect to any 

20 building shall be treated for purposes of this section 

21 as a separate new building. 

22 ‘‘(2) REHABILITATION EXPENDITURES.—For 

23 purposes of paragraph (1)— 

24 ‘‘(A) IN GENERAL.—The term ‘rehabilita25 tion expenditures’ means amounts chargeable to 


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1 capital account and incurred for property (or 

2 additions or improvements to property) of a 

3 character subject to the allowance for deprecia4 tion in connection with the rehabilitation of a 

5 building. 

6 ‘‘(B) COST OF ACQUISITION, ETC., NOT IN7 CLUDED.—Such term does not include the cost 

8 of acquiring any building (or interest therein) 

9 or any amount not permitted to be taken into 

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

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

12 the case of a rehabilitation of a building to 

13 which section 280B does not apply, costs relat14 ing to the relocation of occupants, including— 

15 ‘‘(i) amounts paid to occupants, 

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

17 services relating to such relocation, and 

18 ‘‘(iii) amounts paid for temporary 

19 housing for occupants, 

20 shall be treated as chargeable to capital account 

21 and taken into account as rehabilitation ex22 penditures. 

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


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

2 apply to rehabilitation expenditures with respect 

3 to any building only if— 

4 ‘‘(i) the expenditures are allocable to 

5 1 or more middle-income units or substan6 tially benefit such units, and 

7 ‘‘(ii) the amount of such expenditures 

8 during any 24-month period meets the re9 quirements of whichever of the following 

10 subclauses requires the greater amount of 

11 such expenditures: 

12 ‘‘(I) The requirement of this sub13 clause is met if such amount is not 

14 less than 20 percent of the adjusted 

15 basis of the building (determined as of 

16 the 1st day of such period and with17 out regard to paragraphs (2) and (3) 

18 of section 1016(a)). 

19 ‘‘(II) The requirement of this 

20 subclause is met if the qualified basis 

21 attributable to such amount, when di22 vided by the number of middle-income 

23 units in the building, is equal to or 

24 greater than the dollar amount in ef25 fect under section 42(e)(3)(A)(ii)(II) 


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1 for the calendar year in which such 

2 expenditures are treated as placed in 

3 service under paragraph (4). 

4 ‘‘(B) DATE OF DETERMINATION.—The de5 termination under subparagraph (A) shall be 

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

7 the credit period with respect to such expendi8 tures. 

9 ‘‘(4) SPECIAL RULES.—For purposes of apply10 ing this section with respect to expenditures which 

11 are treated as a separate building by reason of this 

12 subsection— 

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

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

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

16 ‘‘(B) the applicable fraction under sub17 section (c)(1) shall be the applicable fraction for 

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

19 with respect to which the expenditures were in20 curred. 

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

22 from being allowed by reason of this subsection. 

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

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

25 taken into account under this subsection or subVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00161 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 section (d)(2)(A)(i) but not under both such sub2 sections. 

3 ‘‘(6) REGULATIONS TO APPLY SUBSECTION

4 WITH RESPECT TO GROUP OF UNITS IN BUILDING.— 

5 The Secretary may prescribe regulations, consistent 

6 with the purposes of this subsection, treating a 

7 group of units with respect to which rehabilitation 

8 expenditures are incurred as a separate new build9 ing. 

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

11 CREDIT PERIOD.— 

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

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

14 respect to any building, the period of 15 taxable 

15 years beginning with— 

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

17 is placed in service, or 

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

19 succeeding taxable year, 

20 but only if the building is a qualified middle-income 

21 building as of the close of the 1st year of such pe22 riod. The election under subparagraph (B), once 

23 made, shall be irrevocable. 

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

25 PERIOD.— 


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

2 under subsection (a) with respect to any build3 ing for the 1st taxable year of the credit period 

4 shall be determined by substituting for the ap5 plicable fraction under subsection (c)(1) the 

6 fraction— 

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

8 sum of the applicable fractions determined 

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

10 each full month of such year during which 

11 such building was in service, and 

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

13 ‘‘(B) DISALLOWED 1ST-YEAR CREDIT AL14 LOWED IN 16TH YEAR.—Any reduction by rea15 son of subparagraph (A) in the credit allowable 

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

17 1st taxable year of the credit period shall be al18 lowable under subsection (a) for the 1st taxable 

19 year following the credit period. 

20 ‘‘(3) DETERMINATION OF APPLICABLE PER21 CENTAGE WITH RESPECT TO INCREASES IN QUALI22 FIED BASIS AFTER 1ST YEAR OF CREDIT PERIOD.— 

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

24 building which was a qualified middle-income 


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•S 2820 IS

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

2 credit period, if— 

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

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

5 such period) the qualified basis of such 

6 building, exceeds 

7 ‘‘(ii) the qualified basis of such build8 ing as of the close of the 1st year of the 

9 credit period, 

10 the applicable percentage which shall apply 

11 under subsection (a) for the taxable year to 

such excess shall be the percentage equal to 2 12 ⁄3

13 of the applicable percentage which (after the 

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

15 paragraph apply to such basis. 

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

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

18 shall apply to any increase in qualified basis to 

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

20 of such increase. 

21 ‘‘(4) DISPOSITIONS OF PROPERTY.—If a build22 ing (or an interest therein) is disposed of during any 

23 year for which credit is allowable under subsection 

24 (a), such credit shall be allocated between the parVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00164 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 ties on the basis of the number of days during such 

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

3 ‘‘(5) CREDIT PERIOD FOR EXISTING BUILDINGS

4 NOT TO BEGIN BEFORE REHABILITATION CREDIT

5 ALLOWED.— 

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

7 an existing building shall not begin before the 

8 1st taxable year of the credit period for reha9 bilitation expenditures with respect to the build10 ing. 

11 ‘‘(B) ACQUISITION CREDIT ALLOWED FOR

12 CERTAIN BUILDINGS NOT ALLOWED A REHA13 BILITATION CREDIT.— 

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

15 building described in clause (ii)— 

16 ‘‘(I) subsection (d)(2)(B)(iv) 

17 shall not apply, and 

18 ‘‘(II) the credit period for such 

19 building shall not begin before the 

20 taxable year which would be the 1st 

21 taxable year of the credit period for 

22 rehabilitation expenditures with re23 spect to the building under the modi24 fications described in clause (ii)(II). 


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1 ‘‘(ii) BUILDING DESCRIBED.—A build2 ing is described in this clause if— 

3 ‘‘(I) a waiver is granted under 

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

5 acquisition of the building, and 

6 ‘‘(II) a credit would be allowed 

7 for rehabilitation expenditures with 

8 respect to such building if subsection 

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

10 the dollar amount in effect under sub11 section (e)(3)(A)(ii)(II) were two12 thirds of such amount. 

13 ‘‘(g) QUALIFIED MIDDLE-INCOME HOUSING

14 PROJECT.—For purposes of this section— 

15 ‘‘(1) IN GENERAL.—The term ‘qualified middle16 income housing project’ means any project for resi17 dential rental property if 60 percent or more of the 

18 residential units in such project are both rent-re19 stricted and occupied by individuals whose income is 

20 100 percent or less of area median gross income. 

21 For purposes of the preceding sentence, residential 

22 units in a building which is not a qualified middle23 income building by reason of subsection (c)(2)(B) 

24 shall not be taken into account. 

25 ‘‘(2) RENT-RESTRICTED UNITS.— 


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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1), a residential unit is rent-restricted if 

3 the gross rent with respect to such unit does 

4 not exceed 30 percent of the imputed income 

5 limitation applicable to such unit. For purposes 

6 of the preceding sentence, the amount of the in7 come limitation under paragraph (1) applicable 

8 for any period shall not be less than such limi9 tation applicable for the earliest period the 

10 building (which contains the unit) was included 

11 in the determination of whether the project is 

12 a qualified middle-income housing project. 

13 ‘‘(B) GROSS RENT.—For purposes of sub14 paragraph (A), gross rent— 

15 ‘‘(i) includes any utility allowance de16 termined by the Secretary after taking into 

17 account such determinations under section 

18 8 of the United States Housing Act of 

19 1937, 

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

21 supportive service which is paid to the 

22 owner of the unit (on the basis of the mid23 dle-income status of the tenant of the unit) 

24 by any governmental program of assistance 

25 (or by an organization described in section 


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•S 2820 IS

1 501(c)(3) and exempt from tax under sec2 tion 501(a)) if such program (or organiza3 tion) provides assistance for rent and the 

4 amount of assistance provided for rent is 

5 not separable from the amount of assist6 ance provided for supportive services, and 

7 ‘‘(iii) does not include any rental pay8 ment to the owner of the unit to the extent 

9 such owner pays an equivalent amount to 

10 the Farmers’ Home Administration under 

11 section 515 of the Housing Act of 1949. 

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

13 service’ means any service provided under a 

14 planned program of services designed to enable 

15 residents of a residential rental property to re16 main independent and avoid placement in a 

17 hospital, nursing home, or intermediate care fa18 cility for the mentally or physically handi19 capped. 

20 ‘‘(C) IMPUTED INCOME LIMITATION APPLI21 CABLE TO UNIT.—For purposes of this para22 graph, the imputed income limitation applicable 

23 to a unit is the income limitation which would 

24 apply under paragraph (1) to individuals occuVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00168 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 pying the unit if the number of individuals oc2 cupying the unit were as follows: 

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

4 not have a separate bedroom, 1 individual. 

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

6 1 or more separate bedrooms, 1.5 individ7 uals for each separate bedroom. 

8 In the case of a project with respect to which 

9 a credit is allowable by reason of this section 

10 and for which financing is provided by a bond 

11 described in section 142(a)(7), the imputed in12 come limitation shall apply in lieu of the other13 wise applicable income limitation for purposes 

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

15 ‘‘(D) TREATMENT OF UNITS OCCUPIED BY

16 INDIVIDUALS WHOSE INCOMES RISE ABOVE

17 LIMIT.— 

18 ‘‘(i) IN GENERAL.—Except as pro19 vided in clause (ii), notwithstanding an in20 crease in the income of the occupants of a 

21 middle-income unit above the income limi22 tation applicable under paragraph (1), 

23 such unit shall continue to be treated as a 

24 middle-income unit if the income of such 

25 occupants initially met such income limitaVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00169 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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1 tion and such unit continues to be rent-re2 stricted. 

3 ‘‘(ii) NEXT AVAILABLE UNIT MUST BE

4 RENTED TO MIDDLE-INCOME TENANT IF

5 INCOME RISES ABOVE 140 PERCENT OF IN6 COME LIMIT.—If the income of the occu7 pants of the unit increases above 140 per8 cent of the income limitation applicable 

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

10 to apply to such unit if any residential 

11 rental unit in the building (of a size com12 parable to, or smaller than, such unit) is 

13 occupied by a new resident whose income 

14 exceeds such income limitation. 

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

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

17 provided in this paragraph, a building shall be 

18 treated as a qualified middle-income building 

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

20 part) meets the requirements of paragraph (1) 

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

22 credit period for such building. 

23 ‘‘(B) BUILDINGS WHICH RELY ON LATER

24 BUILDINGS FOR QUALIFICATION.— 


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1 ‘‘(i) IN GENERAL.—In determining 

2 whether a building (hereinafter in this sub3 paragraph referred to as the ‘prior build4 ing’) is a qualified middle-income building, 

5 the taxpayer may take into account 1 or 

6 more additional buildings placed in service 

7 during the 12-month period described in 

8 subparagraph (A) with respect to the prior 

9 building only if the taxpayer elects to apply 

10 clause (ii) with respect to each additional 

11 building taken into account. 

12 ‘‘(ii) TREATMENT OF ELECTED

13 BUILDINGS.—In the case of a building 

14 which the taxpayer elects to take into ac15 count under clause (i), the period under 

16 subparagraph (A) for such building shall 

17 end at the close of the 12-month period ap18 plicable to the prior building. 

19 ‘‘(iii) DATE PRIOR BUILDING IS

20 TREATED AS PLACED IN SERVICE.—For 

21 purposes of determining the credit period 

22 for the prior building, the prior building 

23 shall be treated for purposes of this section 

24 as placed in service on the most recent 

25 date any additional building elected by the 


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•S 2820 IS

1 taxpayer (with respect to such prior build2 ing) was placed in service. 

3 ‘‘(C) SPECIAL RULE.—A building— 

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

5 in service as part of a project, and 

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

7 placed in service during the 12-month pe8 riod described in subparagraph (A) with 

9 respect to a prior building which becomes 

10 a qualified middle-income building, 

11 shall in no event be treated as a qualified mid12 dle-income building unless the project is a 

13 qualified middle-income housing project (with14 out regard to such building) on the date such 

15 building is placed in service. 

16 ‘‘(D) PROJECTS WITH MORE THAN 1

17 BUILDING MUST BE IDENTIFIED.—For pur18 poses of this section, a project shall be treated 

19 as consisting of only 1 building unless, before 

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

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

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

23 project is identified in such form and manner 

24 as the Secretary may provide. 


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•S 2820 IS

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

2 Paragraphs (2) (other than subparagraph (A) there3 of), (3), and (7) of section 142(d), and section 

4 6652(j), shall apply for purposes of determining 

5 whether any project is a qualified middle-income 

6 housing project and whether any unit is a middle-in7 come unit; except that, in applying such provisions 

8 for such purposes— 

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

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

11 of this subsection, and 

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

13 means the limitation under paragraph (1) of 

14 this subsection. 

15 ‘‘(5) ELECTION TO TREAT BUILDING AFTER

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

17 purposes of this section, the taxpayer may elect to 

18 treat any building as not part of a qualified middle19 income housing project for any period beginning 

20 after the credit period for such building. 

21 ‘‘(6) SPECIAL RULE WHERE DE MINIMIS EQ22 UITY CONTRIBUTION.—Property shall not be treated 

23 as failing to be residential rental property for pur24 poses of this section merely because the occupant of 

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


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•S 2820 IS

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

2 toward the purchase by such occupant of a residen3 tial unit in such project if— 

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

5 the occupant on the cessation of his occupancy 

6 of a unit in the project, and 

7 ‘‘(B) the purchase of the unit is not per8 mitted until after the close of the credit period 

9 with respect to the building in which the unit 

10 is located. 

11 Any amount paid to the lessor as described in the 

12 preceding sentence shall be included in gross rent 

13 under paragraph (2) for purposes of determining 

14 whether the unit is rent-restricted. 

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

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

17 treated as a project for purposes of this section shall 

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

19 the buildings are rent-restricted (within the meaning 

20 of paragraph (2)) residential rental units. 

21 ‘‘(8) WAIVER OF CERTAIN RECERTIFI22 CATIONS.—On application by the taxpayer, the Sec23 retary may waive any annual recertification of ten24 ant income for purposes of this subsection, if the en25 tire building is occupied by middle-income tenants. 


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•S 2820 IS

1 ‘‘(9) CLARIFICATION OF GENERAL PUBLIC USE

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

3 general public use requirement solely because of oc4 cupancy restrictions or preferences that favor ten5 ants— 

6 ‘‘(A) with special needs, or 

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

8 under a Federal program or State program or 

9 policy that supports housing for such a speci10 fied group. 

11 ‘‘(h) LIMITATION ON AGGREGATE CREDIT ALLOW12 ABLE WITH RESPECT TO PROJECTS LOCATED IN A

13 STATE.— 

14 ‘‘(1) CREDIT MAY NOT EXCEED CREDIT

15 AMOUNT ALLOCATED TO BUILDING.— 

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

17 credit determined under this section for any 

18 taxable year with respect to any building shall 

19 not exceed the housing credit dollar amount al20 located to such building under this subsection. 

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

22 Except in the case of an allocation which meets 

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

24 (E), or (F), an allocation shall be taken into ac25 count under subparagraph (A) only if it is 


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•S 2820 IS

1 made not later than the close of the calendar 

2 year in which the building is placed in service. 

3 ‘‘(C) EXCEPTION WHERE BINDING COM4 MITMENT.—An allocation meets the require5 ments of this subparagraph if there is a binding 

6 commitment (not later than the close of the cal7 endar year in which the building is placed in 

8 service) by the housing credit agency to allocate 

9 a specified housing credit dollar amount to such 

10 building beginning in a specified later taxable 

11 year. 

12 ‘‘(D) EXCEPTION WHERE INCREASE IN

13 QUALIFIED BASIS.— 

14 ‘‘(i) IN GENERAL.—An allocation 

15 meets the requirements of this subpara16 graph if such allocation is made not later 

17 than the close of the calendar year in 

18 which ends the taxable year to which it will 

19 1st apply but only to the extent the 

20 amount of such allocation does not exceed 

21 the limitation under clause (ii). 

22 ‘‘(ii) LIMITATION.—The limitation 

23 under this clause is the amount of credit 

24 allowable under this section (without re25 gard to this subsection) for a taxable year 


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•S 2820 IS

1 with respect to an increase in the qualified 

2 basis of the building equal to the excess 

3 of— 

4 ‘‘(I) the qualified basis of such 

5 building as of the close of the 1st tax6 able year to which such allocation will 

7 apply, over 

8 ‘‘(II) the qualified basis of such 

9 building as of the close of the 1st tax10 able year to which the most recent 

11 prior housing credit allocation with re12 spect to such building applied. 

13 ‘‘(iii) HOUSING CREDIT DOLLAR

14 AMOUNT REDUCED BY FULL ALLOCA15 TION.—Notwithstanding clause (i), the full 

16 amount of the allocation shall be taken 

17 into account under paragraph (2). 

18 ‘‘(E) EXCEPTION WHERE 10 PERCENT OF

19 COST INCURRED.— 

20 ‘‘(i) IN GENERAL.—An allocation 

21 meets the requirements of this subpara22 graph if such allocation is made with re23 spect to a qualified building which is 

24 placed in service not later than the close of 


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•S 2820 IS

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

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

5 building’ means any building which is part 

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

7 project (as of the date which is 1 year 

8 after the date that the allocation was 

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

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

13 term does not include any existing building 

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

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

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

20 year. 

21 ‘‘(F) ALLOCATION OF CREDIT ON A

22 PROJECT BASIS.— 

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

24 project which includes (or will include) 


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•S 2820 IS

1 more than 1 building, an allocation meets 

2 the requirements of this subparagraph if— 

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

4 project for a calendar year during the 

5 project period, 

6 ‘‘(II) the allocation only applies 

7 to buildings placed in service during 

8 or after the calendar year for which 

9 the allocation is made, and 

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

12 in such project is specified not later 

13 than the close of the calendar year in 

14 which the building is placed in service. 

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

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

20 may be made for the 1st building 

21 placed in service as part of such 

22 project, and 

23 ‘‘(II) ending with the calendar 

24 year the last building is placed in 

25 service as part of such project. 


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•S 2820 IS

1 ‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY

2 TO ALL TAXABLE YEARS ENDING DURING OR AFTER

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

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

7 taxable years in the credit period ending during 

8 or after such calendar year, and 

9 ‘‘(B) shall reduce the aggregate housing 

10 credit dollar amount of the allocating agency 

11 only for such calendar year. 

12 ‘‘(3) HOUSING CREDIT DOLLAR AMOUNT FOR

13 AGENCIES.— 

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

16 agency may allocate for any calendar year is 

17 the portion of the State housing credit ceiling 

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

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

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

24 calendar year shall be allocated to the housing 

25 credit agency of such State. If there is more 


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•S 2820 IS

1 than 1 housing credit agency of a State, all 

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

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

5 The State housing credit ceiling applicable to 

6 any State for any calendar year shall be an 

7 amount equal to the sum of— 

8 ‘‘(i) the greater of— 

9 ‘‘(I) $1.00 multiplied by the 

10 State population, or 

11 ‘‘(II) $1,140,000, plus 

12 ‘‘(ii) the amount of State housing 

13 credit ceiling returned in the calendar year. 

14 For purposes of clause (ii), the amount of State 

15 housing credit ceiling returned in the calendar 

16 year equals the housing credit dollar amount 

17 previously allocated within the State to any 

18 project which fails to meet the 10 percent test 

19 under paragraph (1)(E)(ii) on a date after the 

20 close of the calendar year in which the alloca21 tion was made or which does not become a 

22 qualified middle-income housing project within 

23 the period required by this section or the terms 

24 of the allocation or to any project with respect 

25 to which an allocation is cancelled by mutual 


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•S 2820 IS

1 consent of the housing credit agency and the al2 location recipient. 

3 ‘‘(D) STATE MAY PROVIDE FOR DIF4 FERENT ALLOCATION.—Rules similar to the 

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

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

7 paragraph. 

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

9 paragraph, population shall be determined in 

10 accordance with section 146(j). 

11 ‘‘(F) COST-OF-LIVING ADJUSTMENT.— 

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

13 calendar year after 2022, the $1,140,000 

14 and $1.00 amounts in subparagraph (C) 

15 shall each be increased by an amount equal 

16 to— 

17 ‘‘(I) such dollar amount, multi18 plied by 

19 ‘‘(II) the cost-of-living adjust20 ment determined under section 1(f)(3) 

21 for such calendar year by substituting 

22 ‘calendar year 2021’ for ‘calendar 

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

24 thereof. 

25 ‘‘(ii) ROUNDING.— 


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•S 2820 IS

1 ‘‘(I) In the case of the 

2 $1,140,000 amount, any increase 

3 under clause (i) which is not a mul4 tiple of $5,000 shall be rounded to the 

5 next lowest multiple of $5,000. 

6 ‘‘(II) In the case of the $1.00 

7 amount, any increase under clause (i) 

8 which is not a multiple of 5 cents 

9 shall be rounded to the next lowest 

10 multiple of 5 cents. 

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

12 FOR CERTAIN PROJECTS INVOLVING QUALIFIED

13 NONPROFIT ORGANIZATIONS.— 

14 ‘‘(A) IN GENERAL.—Not more than 90 

15 percent of the State housing credit ceiling (de16 termined without regard to paragraph (7)) for 

17 any State for any calendar year shall be allo18 cated to projects other than qualified middle-in19 come housing projects described in subpara20 graph (B). 

21 ‘‘(B) PROJECTS INVOLVING QUALIFIED

22 NONPROFIT ORGANIZATIONS.—For purposes of 

23 subparagraph (A), a qualified middle-income 

24 housing project is described in this subpara25 graph if a qualified nonprofit organization is to 


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•S 2820 IS

1 own an interest in the project (directly or 

2 through a partnership) and materially partici3 pate (within the meaning of section 469(h)) in 

4 the development and operation of the project 

5 throughout the credit period. 

6 ‘‘(C) QUALIFIED NONPROFIT ORGANIZA7 TION.—For purposes of this paragraph, the 

8 term ‘qualified nonprofit organization’ means 

9 any organization if— 

10 ‘‘(i) such organization is described in 

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

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

13 ‘‘(ii) such organization is determined 

14 by the State housing credit agency not to 

15 be affiliated with or controlled by a for16 profit organization; and 

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

18 such organization includes the fostering of 

19 middle-income housing. 

20 ‘‘(D) TREATMENT OF CERTAIN SUBSIDI21 ARIES.— 

22 ‘‘(i) IN GENERAL.—For purposes of 

23 this paragraph, a qualified nonprofit orga24 nization shall be treated as satisfying the 

25 ownership and material participation test 


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•S 2820 IS

1 of subparagraph (B) if any qualified cor2 poration in which such organization holds 

3 stock satisfies such test. 

4 ‘‘(ii) QUALIFIED CORPORATION.—For 

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

6 corporation’ means any corporation if 100 

7 percent of the stock of such corporation is 

8 held by 1 or more qualified nonprofit orga9 nizations at all times during the period 

10 such corporation is in existence. 

11 ‘‘(E) STATE MAY NOT OVERRIDE SET12 ASIDE.—Nothing in subparagraph (E) of para13 graph (3) shall be construed to permit a State 

14 not to comply with subparagraph (A) of this 

15 paragraph. 

16 ‘‘(5) BUILDINGS ELIGIBLE FOR CREDIT ONLY

17 IF MINIMUM LONG-TERM COMMITMENT TO MIDDLE18 INCOME HOUSING.— 

19 ‘‘(A) IN GENERAL.—No credit shall be al20 lowed by reason of this section with respect to 

21 any building for the taxable year unless an ex22 tended middle-income housing commitment is in 

23 effect as of the end of such taxable year. 

24 ‘‘(B) EXTENDED MIDDLE-INCOME HOUS25 ING COMMITMENT.—For purposes of this paraVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00185 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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•S 2820 IS

1 graph, the term ‘extended middle-income hous2 ing commitment’ means any agreement between 

3 the taxpayer and the housing credit agency— 

4 ‘‘(i) which requires that the applicable 

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

6 for the building for each taxable year in 

7 the extended use period will not be less 

8 than the applicable fraction specified in 

9 such agreement and which prohibits the 

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

11 of subparagraph (E)(ii), 

12 ‘‘(ii) which allows individuals who 

13 meet the income limitation applicable to 

14 the building under subsection (g) (whether 

15 prospective, present, or former occupants 

16 of the building) the right to enforce in any 

17 State court the requirement and prohibi18 tions of clause (i), 

19 ‘‘(iii) which prohibits the disposition 

20 to any person of any portion of the build21 ing to which such agreement applies unless 

22 all of the building to which such agreement 

23 applies is disposed of to such person, 

24 ‘‘(iv) which prohibits the refusal to 

25 lease to a holder of a voucher or certificate 


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•S 2820 IS

1 of eligibility under section 8 of the United 

2 States Housing Act of 1937 because of the 

3 status of the prospective tenant as such a 

4 holder, 

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

6 of the taxpayer, and 

7 ‘‘(vi) which, with respect to the prop8 erty, is recorded pursuant to State law as 

9 a restrictive covenant. 

10 ‘‘(C) ALLOCATION OF CREDIT MAY NOT

11 EXCEED AMOUNT NECESSARY TO SUPPORT

12 COMMITMENT.—The housing credit dollar 

13 amount allocated to any building may not ex14 ceed the amount necessary to support the appli15 cable fraction specified in the extended middle16 income housing commitment for such building, 

17 including any increase in such fraction pursu18 ant to the application of subsection (f)(3) if 

19 such increase is reflected in an amended mid20 dle-income housing commitment. 

21 ‘‘(D) EXTENDED USE PERIOD.—For pur22 poses of this paragraph, the term ‘extended use 

23 period’ means the period— 

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

25 credit period on which such building is 


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•S 2820 IS

1 part of a qualified middle-income housing 

2 project, and 

3 ‘‘(ii) ending on the later of— 

4 ‘‘(I) the date specified by such 

5 agency in such agreement, or 

6 ‘‘(II) the date which is 15 years 

7 after the close of the credit period. 

8 ‘‘(E) EXCEPTIONS IF FORECLOSURE OR IF

9 NO BUYER WILLING TO MAINTAIN MIDDLE-IN10 COME STATUS.— 

11 ‘‘(i) IN GENERAL.—The extended use 

12 period for any building shall terminate on 

13 the date the building is acquired by fore14 closure (or instrument in lieu of fore15 closure) unless the Secretary determines 

16 that such acquisition is part of an arrange17 ment with the taxpayer a purpose of which 

18 is to terminate such period. 

19 ‘‘(ii) EVICTION, ETC., OF EXISTING

20 MIDDLE-INCOME TENANTS NOT PER21 MITTED.—The termination of an extended 

22 use period under clause (i) shall not be 

23 construed to permit before the close of the 

24 3-year period following such termination— 


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•S 2820 IS

1 ‘‘(I) the eviction or the termi2 nation of tenancy (other than for good 

3 cause) of an existing tenant of any 

4 middle-income unit, or 

5 ‘‘(II) any increase in the gross 

6 rent with respect to such unit not oth7 erwise permitted under this section. 

8 ‘‘(F) EFFECT OF NONCOMPLIANCE.—If, 

9 during a taxable year, there is a determination 

10 that an extended middle-income housing agree11 ment was not in effect as of the beginning of 

12 such year, such determination shall not apply to 

13 any period before such year and subparagraph 

14 (A) shall be applied without regard to such de15 termination if the failure is corrected within 1 

16 year from the date of the determination. 

17 ‘‘(G) PROJECTS WHICH CONSIST OF MORE

18 THAN 1 BUILDING.—The application of this 

19 paragraph to projects which consist of more 

20 than 1 building shall be made under regulations 

21 prescribed by the Secretary. 

22 ‘‘(6) SPECIAL RULES.— 

23 ‘‘(A) BUILDING MUST BE LOCATED WITH24 IN JURISDICTION OF CREDIT AGENCY.—A hous25 ing credit agency may allocate its aggregate 


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•S 2820 IS

1 housing credit dollar amount only to buildings 

2 located in the jurisdiction of the governmental 

3 unit of which such agency is a part. 

4 ‘‘(B) AGENCY ALLOCATIONS IN EXCESS OF

5 LIMIT.—If the aggregate housing credit dollar 

6 amounts allocated by a housing credit agency 

7 for any calendar year exceed the portion of the 

8 State housing credit ceiling allocated to such 

9 agency for such calendar year, the housing 

10 credit dollar amounts so allocated shall be re11 duced (to the extent of such excess) for build12 ings in the reverse of the order in which the al13 locations of such amounts were made. 

14 ‘‘(C) CREDIT REDUCED IF ALLOCATED

15 CREDIT DOLLAR AMOUNT IS LESS THAN CREDIT

16 WHICH WOULD BE ALLOWABLE WITHOUT RE17 GARD TO PLACED IN SERVICE CONVENTION, 

18 ETC.— 

19 ‘‘(i) IN GENERAL.—The amount of 

20 the credit determined under this section 

21 with respect to any building shall not ex22 ceed the clause (ii) percentage of the 

23 amount of the credit which would (but for 

24 this subparagraph) be determined under 

25 this section with respect to such building. 


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•S 2820 IS

1 ‘‘(ii) DETERMINATION OF PERCENT2 AGE.—For purposes of clause (i), the 

3 clause (ii) percentage with respect to any 

4 building is the percentage which— 

5 ‘‘(I) the housing credit dollar 

6 amount allocated to such building, 

7 bears to 

8 ‘‘(II) the credit amount deter9 mined in accordance with clause (iii). 

10 ‘‘(iii) DETERMINATION OF CREDIT

11 AMOUNT.—The credit amount determined 

12 in accordance with this clause is the 

13 amount of the credit which would (but for 

14 this subparagraph) be determined under 

15 this section with respect to the building 

16 if— 

17 ‘‘(I) this section were applied 

18 without regard to paragraphs (2)(A) 

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

20 ‘‘(II) subsection (f)(3)(A) were 

21 applied without regard to ‘the percentage equal to 2 22 ⁄3 of’. 

23 ‘‘(D) HOUSING CREDIT AGENCY TO SPECI24 FY APPLICABLE PERCENTAGE AND MAXIMUM

25 QUALIFIED BASIS.—In allocating a housing 


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•S 2820 IS

1 credit dollar amount to any building, the hous2 ing credit agency shall specify the applicable 

3 percentage and the maximum qualified basis 

4 which may be taken into account under this 

5 section with respect to such building. The appli6 cable percentage and maximum qualified basis 

7 so specified shall not exceed the applicable per8 centage and qualified basis determined under 

9 this section without regard to this subsection. 

10 ‘‘(7) INCREASE IN STATE CEILING DEDICATED

11 TO CERTAIN RURAL DEVELOPMENT PROJECTS.— 

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

13 credit ceiling for any calendar year shall be in14 creased by an amount equal to 5 percent of the 

15 amount determined under paragraph (3)(C)(i). 

16 ‘‘(B) USE OF INCREASED AMOUNT.—The 

17 amount of the increase under subparagraph (A) 

18 for any calendar year may only be allocated to 

19 buildings located in a rural area (as defined in 

20 section 42(d)(5)(B)(iii)(IV)). 

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

22 this subsection— 

23 ‘‘(A) HOUSING CREDIT AGENCY.—The 

24 term ‘housing credit agency’ means any agency 

25 authorized to carry out this subsection. 


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•S 2820 IS

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 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00193 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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•S 2820 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 2820 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 2820 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 2820 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 2820 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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•S 2820 IS

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 2820 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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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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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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•S 2820 IS

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 (32), by striking the period at the end of paragraph 

2 (33) and inserting ‘‘, plus’’, and by adding at the end the 

3 following new paragraph: 

4 ‘‘(34) 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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•S 2820 IS

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’’. 

25 (e) CONFORMING AMENDMENTS.— 


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1 (1) Section 55(c)(1) of the Internal Revenue 

2 Code of 1986 is amended by inserting ‘‘42A(j),’’ be3 fore ‘‘45(e)(11)(C)’’. 

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

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

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

7 (3) The table of sections for subpart D of part 

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

9 amended by inserting after the item relating to sec10 tion 42 the following new item: 

‘‘Sec. 42A. Middle-income housing credit.’’. 

11 (f) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years ending after the 

13 date of the enactment of this Act. 

14 SEC. 217. NEIGHBORHOOD HOMES CREDIT. 

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986, as amended by section 216, is further amended by 

18 inserting after section 42A the following new section: 

19 ‘‘SEC. 42B. NEIGHBORHOOD HOMES CREDIT. 

20 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec21 tion 38, the amount of the neighborhood homes credit de22 termined under this section for a taxable year for a quali23 fied project shall be, with respect to each qualified resi24 dence that is part of such qualified project and with reVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00217 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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•S 2820 IS

1 spect to which there is a qualified completion event during 

2 such taxable year, an amount equal to— 

3 ‘‘(1) in the case of an affordable sale, with re4 spect to the seller, the excess of— 

5 ‘‘(A) the qualified development cost in6 curred by such seller for such qualified resi7 dence, over 

8 ‘‘(B) the sale price of such qualified resi9 dence, or 

10 ‘‘(2) in the case of any rehabilitation described 

11 in subsection (f)(5)(B), with respect to a taxpayer 

12 other than the owner of the qualified residence (or 

13 a related person with respect to such owner), the ex14 cess of— 

15 ‘‘(A) the qualified development cost in16 curred by such taxpayer for such qualified resi17 dence, over 

18 ‘‘(B) the amount received by such taxpayer 

19 as payment for such rehabilitation. 

20 ‘‘(b) LIMITATIONS.— 

21 ‘‘(1) AMOUNT.—The amount determined under 

22 subsection (a) with respect to a qualified residence 

23 shall not exceed 35 percent of the lesser of— 

24 ‘‘(A) the qualified development cost, re25 duced by so much of the amount described in 


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•S 2820 IS

1 subsection (c)(2)(B) as exceeds an amount 

2 equal to 75 percent of the costs described in 

3 subsection (c)(2)(A), or 

4 ‘‘(B) 80 percent of the national median 

5 sale price for new homes (as determined pursu6 ant to the most recent census data available as 

7 of the date on which the neighborhood homes 

8 credit agency makes an allocation for the quali9 fied project). 

10 ‘‘(2) ALLOCATIONS.— 

11 ‘‘(A) IN GENERAL.—The amount deter12 mined under subsection (a) with respect to a 

13 qualified residence that is part of a qualified 

14 project and with respect to which there is a 

15 qualified completion event shall not exceed the 

16 excess of— 

17 ‘‘(i) the amount determined under 

18 subparagraph (B), over 

19 ‘‘(ii) the amounts previously deter20 mined under subsection (a) with respect to 

21 such qualified project. 

22 ‘‘(B) ALLOCATION AMOUNT.—The amount 

23 determined under this paragraph with respect 

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•S 2820 IS

1 fied project and with respect to which there is 

2 a qualified completion event is the least of— 

3 ‘‘(i) the amount allocated to such 

4 project by the neighborhood homes credit 

5 agency under this section, 

6 ‘‘(ii) pursuant to subparagraph (C), 

7 the amount such agency determines at the 

8 time of the qualified completion event is 

9 necessary to ensure the financial feasibility 

10 of the project, or 

11 ‘‘(iii) in the case of a qualified com12 pletion event that occurs after the 5-year 

13 period beginning on the date of the alloca14 tion referred to in clause (i), $0. 

15 ‘‘(C) FINANCIAL FEASIBILITY.—For pur16 poses of subparagraph (B)(ii), the neighborhood 

17 homes credit agency shall consider— 

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

19 the total financing planned for the quali20 fied project, 

21 ‘‘(ii) any proceeds or receipts expected 

22 to be generated by reason of tax benefits, 

23 ‘‘(iii) the percentage of the amount al24 located to such project under this section 


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•S 2820 IS

1 used for project costs other than the cost 

2 of intermediaries, and 

3 ‘‘(iv) the reasonableness of the quali4 fied development cost of the qualified 

5 project. 

6 ‘‘(c) QUALIFIED DEVELOPMENT COST.—For pur7 poses of this section— 

8 ‘‘(1) IN GENERAL.—The term ‘qualified devel9 opment cost’ means, with respect to a qualified resi10 dence, so much of the allowable development cost as 

11 the neighborhood homes credit agency certifies, at 

12 the time of the completion event, meets the stand13 ards promulgated under subsection (h)(1)(C). 

14 ‘‘(2) ALLOWABLE DEVELOPMENT COST.—The 

15 term ‘allowable development cost’ means— 

16 ‘‘(A) any costs and fees relating to con17 struction, substantial rehabilitation, demolition 

18 of any structure, or environmental remediation, 

19 and 

20 ‘‘(B) in the case of an affordable sale, the 

21 adjusted basis of buildings and land, deter22 mined as of the date of acquisition. 

23 ‘‘(3) CONDOMINIUM AND COOPERATIVE HOUS24 ING UNITS.—In the case of a qualified residence de25 scribed in subparagraph (B) or (C) of subsection 


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•S 2820 IS

1 (f)(1), the allowable development cost of such quali2 fied residence shall be an amount equal to the total 

3 allowable development cost of the entire condo4 minium or cooperative housing property in which 

5 such qualified residence is located, multiplied by a 

6 fraction— 

7 ‘‘(A) the numerator of which is the total 

8 floor space of such qualified residence, and 

9 ‘‘(B) the denominator of which is the total 

10 floor space of all residences within such prop11 erty. 

12 ‘‘(d) QUALIFIED PROJECT.—For purposes of this 

13 section, the term ‘qualified project’ means a project that— 

14 ‘‘(1) a neighborhood homes credit agency cer15 tifies will build or substantially rehabilitate one or 

16 more qualified residences located in one or more 

17 qualified census tracts, and 

18 ‘‘(2) is designated by such agency as a qualified 

19 project under this section and is allocated (before 

20 such building or substantial rehabilitation begins) a 

21 portion of the amount allocated to such agency 

22 under subsection (g). 

23 ‘‘(e) QUALIFIED CENSUS TRACT.—For purposes of 

24 this section— 


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•S 2820 IS

1 ‘‘(1) IN GENERAL.—The term ‘qualified census 

2 tract’ means a census tract— 

3 ‘‘(A) with— 

4 ‘‘(i) a median gross income which 

5 does not exceed 80 percent of the applica6 ble area median gross income, 

7 ‘‘(ii) a poverty rate that is not less 

8 than 130 percent of the applicable area 

9 poverty rate, and 

10 ‘‘(iii) a median value for owner-occu11 pied homes that does not exceed applicable 

12 area median value for owner-occupied 

13 homes, 

14 ‘‘(B) which is located in a city with a pop15 ulation of not less than 50,000 and a poverty 

16 rate that is not less than 150 percent of the ap17 plicable area poverty rate, and which has— 

18 ‘‘(i) a median gross income which 

19 does not exceed the applicable area median 

20 gross income, and 

21 ‘‘(ii) a median value for owner-occu22 pied homes that does not exceed 80 per23 cent of the applicable area median value 

24 for owner-occupied homes, or 


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•S 2820 IS

1 ‘‘(C) which is located in a nonmetropolitan 

2 county and which has— 

3 ‘‘(i) a median gross income which 

4 does not exceed the applicable area median 

5 gross income, and 

6 ‘‘(ii) been designated by a neighbor7 hood homes credit agency under this 

8 clause. 

9 ‘‘(2) ADDITIONAL CENSUS TRACTS FOR SUB10 STANTIAL REHABILITATION.—In the case of a quali11 fied residence that is intended for substantial reha12 bilitation described in subsection (f)(5)(B), the term 

13 ‘qualified census tract’ includes a census tract which 

14 is located within an area— 

15 ‘‘(A) with respect to which a major dis16 aster has been declared by the President, not 

17 more than 3 years before the date on which the 

18 neighborhood homes credit agency makes an al19 location for a qualified project within such cen20 sus tract, under section 401 of the Robert T. 

21 Stafford Disaster Relief and Emergency Assist22 ance Act, and 

23 ‘‘(B) which contains qualified residences 

24 for which there are qualified development costs 

25 related to such major disaster. 


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1 ‘‘(3) LIST OF QUALIFIED CENSUS TRACTS.— 

2 The Secretary of Housing and Urban Development 

3 shall, for each year, make publicly available a list of 

4 qualified census tracts under— 

5 ‘‘(A) on a combined basis, subparagraphs 

6 (A) and (B) of paragraph (1), 

7 ‘‘(B) subparagraph (C) of such paragraph, 

8 and 

9 ‘‘(C) paragraph (2). 

10 ‘‘(f) OTHER DEFINITIONS.—For purposes of this sec11 tion— 

12 ‘‘(1) QUALIFIED RESIDENCE.—The term ‘quali13 fied residence’ means a residence that consists of— 

14 ‘‘(A) a single-family home, including man15 ufactured homes or similar housing units, con16 taining 4 or fewer residential units, 

17 ‘‘(B) a condominium unit, or 

18 ‘‘(C) a house or an apartment owned by a 

19 cooperative housing corporation (as defined in 

20 section 216(b)(1)). 

21 ‘‘(2) AFFORDABLE SALE.— 

22 ‘‘(A) IN GENERAL.— 

23 ‘‘(i) IN GENERAL.—The term ‘afford24 able sale’ means a sale to a qualified home25 owner of a qualified residence that the 


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•S 2820 IS

1 neighborhood homes credit agency certifies 

2 as meeting the standards promulgated 

3 under subsection (h)(1)(D) for a price that 

4 does not exceed— 

5 ‘‘(I) in the case of any qualified 

6 residence not described in subclause 

7 (II), (III), or (IV), the amount equal 

8 to the product of 4 multiplied by the 

9 applicable area median gross income, 

10 ‘‘(II) in the case of a single-fam11 ily home containing two residential 

12 units, 125 percent of the amount de13 scribed in subclause (I), 

14 ‘‘(III) in the case of a single-fam15 ily home containing three residential 

16 units, 150 percent of the amount de17 scribed in subclause (I), or 

18 ‘‘(IV) in the case of a single-fam19 ily home containing four residential 

20 units, 175 percent of the amount de21 scribed in subclause (I). 

22 ‘‘(ii) RELATED PERSONS.— 

23 ‘‘(I) IN GENERAL.—A sale be24 tween related persons shall not be 

25 treated as an affordable sale. 


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•S 2820 IS

1 ‘‘(II) DEFINITION.—For pur2 poses of this section, a person (in this 

3 clause referred to as the ‘related per4 son’) is related to any person if the 

5 related person bears a relationship to 

6 such person specified in section 

7 267(b) or 707(b)(1), or the related 

8 person and such person are engaged 

9 in trades or businesses under common 

10 control (within the meaning of sub11 sections (a) and (b) of section 52). 

12 For purposes of the preceding sen13 tence, in applying section 267(b) or 

14 707(b)(1), ‘10 percent’ shall be sub15 stituted for ‘50 percent’. 

16 ‘‘(3) APPLICABLE AREA.—The term ‘applicable 

17 area’ means— 

18 ‘‘(A) in the case of a metropolitan census 

19 tract, the metropolitan area in which such cen20 sus tract is located, and 

21 ‘‘(B) in the case of a census tract other 

22 than a census tract described in subparagraph 

23 (A), the State. 

24 ‘‘(4) SUBSTANTIAL REHABILITATION.—The 

25 term ‘substantial rehabilitation’ means rehabilitation 


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•S 2820 IS

1 efforts involving qualified development costs that are 

2 not less than the greater of— 

3 ‘‘(A) $20,000, or 

4 ‘‘(B) 20 percent of the adjusted basis of 

5 the buildings and land, determined as of the 

6 date of acquisition. 

7 ‘‘(5) QUALIFIED COMPLETION EVENT.—The 

8 term ‘qualified completion event’ means— 

9 ‘‘(A) in the case of a qualified residence 

10 that is built or substantially rehabilitated as 

11 part of a qualified project and sold, an afford12 able sale, or 

13 ‘‘(B) in the case of a qualified residence 

14 that is substantially rehabilitated as part of a 

15 qualified project and owned by the same quali16 fied homeowner throughout such rehabilitation, 

17 the completion of such rehabilitation (as deter18 mined by the neighborhood homes credit agen19 cy) to the standards promulgated under sub20 section (h)(1)(D). 

21 ‘‘(6) QUALIFIED HOMEOWNER.— 

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

23 homeowner’ means, with respect to a qualified 

24 residence, an individual— 


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•S 2820 IS

1 ‘‘(i) who owns and uses such qualified 

2 residence as the principal residence of such 

3 individual, and 

4 ‘‘(ii) whose income is 140 percent or 

5 less of the applicable area median gross in6 come for the location of the qualified resi7 dence. 

8 ‘‘(B) OWNERSHIP.—For purposes of a co9 operative housing corporation (as such term is 

10 defined in section 216(b)), a tenant-stockholder 

11 shall be treated as owning the house or apart12 ment which such person is entitled to occupy. 

13 ‘‘(C) INCOME.—For purposes of this para14 graph, income shall be a determined in accord15 ance with section 143(f)(2) and 143(f)(4). 

16 ‘‘(D) TIMING.—For purposes of this para17 graph, the income of a taxpayer shall be deter18 mined— 

19 ‘‘(i) in the case of a qualified resi20 dence that is built or substantially rehabili21 tated as part of a qualified project and 

22 sold, at the time a binding contract for 

23 purchase is made, or 

24 ‘‘(ii) in the case of a qualified resi25 dence that is occupied by a qualified homeVerDate Sep 11 2014 20:42 Sep 27, 2021 Jkt 019200 PO 00000 Frm 00229 Fmt 6652 Sfmt 6201 E:\BILLS\S2820.IS S2820

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•S 2820 IS

1 owner and intended to be substantially re2 habilitated as part of a qualified project, at 

3 the time a binding contract to undertake 

4 such rehabilitation is made. 

5 ‘‘(7) NEIGHBORHOOD HOMES CREDIT AGEN6 CY.—The term ‘neighborhood homes credit agency’ 

7 means the agency designated by the State as the 

8 neighborhood homes credit agency of the State. 

9 ‘‘(g) ALLOCATION.— 

10 ‘‘(1) STATE NEIGHBORHOOD HOMES CREDIT

11 CEILING.—The State neighborhood homes credit 

12 amount for a State for a calendar year is an amount 

13 equal to the greater of— 

14 ‘‘(A) the product of $6, multiplied by the 

15 State population (determined in accordance 

16 with section 146(j)), or 

17 ‘‘(B) $8,000,000. 

18 ‘‘(2) UNUSED AMOUNT.—The State neighbor19 hood homes credit amount for a calendar year shall 

20 be increased by the sum of— 

21 ‘‘(A) any amount certified by the neighbor22 hood homes credit agency of the State as hav23 ing been previously allocated to a qualified 

24 project and not used during the 5-year period 

25 described in subsection (b)(2)(B)(iii), plus 


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•S 2820 IS

1 ‘‘(B) sum of the amount by which the 

2 amount determined under paragraph (1) (with3 out application of this paragraph) exceeded the 

4 amount allocated to qualified projects in each of 

5 the three immediately preceding calendar years. 

6 ‘‘(3) PORTION OF STATE CREDIT CEILING FOR

7 CERTAIN PROJECTS INVOLVING QUALIFIED NON8 PROFIT ORGANIZATIONS.—Rules similar to the rules 

9 of section 42(h)(5) shall apply. 

10 ‘‘(h) RESPONSIBILITIES OF NEIGHBORHOOD HOMES

11 CREDIT AGENCIES.— 

12 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

13 (g), 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 such amount for the previous year to projects 

21 with respect to qualified residences in census 

22 tracts under subsection (e)(1)(C) or (e)(2), 

23 ‘‘(C) promulgates standards with respect 

24 to reasonable qualified development costs and 

25 fees, 


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•S 2820 IS

1 ‘‘(D) promulgates standards with respect 

2 to construction quality, and 

3 ‘‘(E) submits to the Secretary (at such 

4 time and in such manner as the Secretary may 

5 prescribe) an annual report specifying— 

6 ‘‘(i) the amount of the neighborhood 

7 homes credits allocated to each qualified 

8 project for the previous year, 

9 ‘‘(ii) with respect to each qualified 

10 residence completed in the preceding cal11 endar year— 

12 ‘‘(I) the census tract in which 

13 such qualified residence is located, 

14 ‘‘(II) with respect to the qualified 

15 project that includes such qualified 

16 residence, the year in which such 

17 project received an allocation under 

18 this section, 

19 ‘‘(III) whether such qualified res20 idence was new or substantially reha21 bilitated, 

22 ‘‘(IV) the eligible basis of such 

23 qualified residence, 


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•S 2820 IS

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 or, in the case of a 

6 qualified residence that is substan7 tially rehabilitated as part of a quali8 fied project and is owned by the same 

9 qualified homeowner during the en10 tirety of such rehabilitation, the cost 

11 of the substantial rehabilitation, and 

12 ‘‘(VII) the income of the quali13 fied homeowner (expressed as a per14 centage of the applicable area median 

15 gross income for the location of the 

16 qualified residence), and 

17 ‘‘(iii) such other information as the 

18 Secretary may require. 

19 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur20 poses of this subsection, the term ‘qualified alloca21 tion plan’ means any plan which— 

22 ‘‘(A) sets forth the selection criteria to be 

23 used to prioritize qualified projects for alloca24 tions of State neighborhood homes credit dollar 

25 amounts, including— 


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•S 2820 IS

1 ‘‘(i) the need for new or substantially 

2 rehabilitated owner-occupied homes in the 

3 area addressed by the project, 

4 ‘‘(ii) the expected contribution of the 

5 project to neighborhood stability and revi6 talization, 

7 ‘‘(iii) the capability of the project 

8 sponsor, and 

9 ‘‘(iv) the likelihood the project will re10 sult in long-term homeownership, 

11 ‘‘(B) has been made available for public 

12 comment, and 

13 ‘‘(C) provides a procedure that the neigh14 borhood homes credit agency (or any agent or 

15 contractor of such agency) shall follow for pur16 poses of— 

17 ‘‘(i) identifying noncompliance with 

18 any provisions of this section, and 

19 ‘‘(ii) notifying the Secretary of any 

20 such noncompliance of which the agency 

21 becomes aware. 

22 ‘‘(i) POSSESSIONS TREATED AS STATES.—For pur23 poses of this section, the term ‘State’ includes the District 

24 of Columbia and a possession of the United States. 

25 ‘‘(j) REPAYMENT.— 


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•S 2820 IS

1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) SOLD DURING 5-YEAR PERIOD.—If a 

3 qualified residence is sold during the 5-year pe4 riod beginning on the date of the qualified com5 pletion event described in subsection (a) with 

6 respect to such qualified residence, the seller 

7 shall transfer an amount equal to the repay8 ment amount from the amount realized on such 

9 sale to the relevant neighborhood homes credit 

10 agency. 

11 ‘‘(B) USE OF REPAYMENTS.—A neighbor12 hood homes credit agency shall use any amount 

13 received pursuant to subparagraph (A) only for 

14 purposes of qualified projects. 

15 ‘‘(2) REPAYMENT AMOUNT.—For purposes of 

16 paragraph (1)(A), the repayment amount is an 

17 amount equal to 50 percent of the gain from such 

18 resale, reduced by 20 percent for each year of the 

19 5-year period referred to in paragraph (1)(A) which 

20 ends before the date of the sale referred to in such 

21 paragraph. 

22 ‘‘(3) LIEN FOR REPAYMENT AMOUNT.—A 

23 neighborhood homes credit agency receiving an allo24 cation under this section shall place a lien on each 

25 qualified residence that is built or rehabilitated as 


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•S 2820 IS

1 part of a qualified project for an amount such agen2 cy deems necessary to ensure potential repayment 

3 pursuant to paragraph (1)(A). 

4 ‘‘(4) DENIAL OF DEDUCTIONS IF CONVERTED

5 TO RENTAL HOUSING.—If, during the 5-year period 

6 beginning on the date of the qualified completion 

7 event described in subsection (a), an individual who 

8 owns a qualified residence fails to use such qualified 

9 residence as such individual’s principal residence for 

10 any period of time, no deduction shall be allowed for 

11 expenses paid or incurred by such individual with re12 spect to renting, during such period of time, such 

13 qualified residence. 

14 ‘‘(5) WAIVER.—The neighborhood homes credit 

15 agency may waive the repayment required under 

16 paragraph (1)(A) in the case of a homeowner experi17 encing a hardship. 

18 ‘‘(k) REPORT.— 

19 ‘‘(1) IN GENERAL.—The Secretary shall annu20 ally issue a report, to be made available to the pub21 lic, which contains the information submitted pursu22 ant to subsection (h)(1)(E). 

23 ‘‘(2) DE-IDENTIFICATION.—The Secretary shall 

24 ensure that any information made public pursuant 

25 to paragraph (1) excludes any information that 


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•S 2820 IS

1 would allow for the identification of qualified home2 owners. 

3 ‘‘(l) INFLATION ADJUSTMENT.— 

4 ‘‘(1) IN GENERAL.—In the case of a calendar 

5 year after 2022, the dollar amounts in this section 

6 shall each be increased by an amount equal to— 

7 ‘‘(A) such dollar amount, multiplied by 

8 ‘‘(B) the cost-of-living adjustment deter9 mined under section 1(f)(3) for such calendar 

10 year by substituting ‘calendar year 2021’ for 

11 ‘calendar year 2016’ in subparagraph (A)(ii) 

12 thereof. 

13 ‘‘(2) ROUNDING.— 

14 ‘‘(A) SUBSTANTIAL REHABILITATION.—In 

15 the case of the dollar amount in subsection 

16 (f)(4), any increase under the preceding sen17 tence which is not a multiple of $1,000 shall be 

18 rounded to the nearest multiple of $1,000. 

19 ‘‘(B) In the case of the dollar amount in 

20 subsection (g)(1)(A), any increase under the 

21 preceding sentence which is not a multiple of 

22 $0.01 shall be rounded to the nearest multiple 

23 of $0.01. 

24 ‘‘(C) In the case of the dollar amount in 

25 subsection (g)(1)(B), any increase under the 


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•S 2820 IS

1 preceding sentence which is not a multiple of 

2 $100,000 shall be rounded to the nearest mul3 tiple of $100,000.’’. 

4 (b) CURRENT YEAR BUSINESS CREDIT CALCULA5 TION.—Section 38(b) of the Internal Revenue Code of 

6 1986, as amended by section 216, is further amended by 

7 redesignating paragraphs (6) through (34) as paragraphs 

8 (7) through (35), respectively, and by inserting after para9 graph (5) the following new paragraph: 

10 ‘‘(6) the neighborhood homes credit determined 

11 under section 42B(a),’’. 

12 (c) LIMITATION ON CARRYBACK.—Section 39 of the 

13 Internal Revenue Code of 1986 is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(e) NO CARRYBACK OF NEIGHBORHOOD HOMES

16 CREDIT BEFORE EFFECTIVE DATE.—No amount of the 

17 unused credit attributable to section 42B may be taken 

18 into account under section 38(a)(3) for any taxable year 

19 beginning before the date of the enactment of this sub20 section.’’. 

21 (d) CONFORMING AMENDMENTS.—Subsections 

22 (i)(3)(C), (i)(6)(B)(i), and (k)(1) of section 469 of the In23 ternal Revenue Code of 1986, as amended by section 216, 

24 are each further amended by striking ‘‘42 or 42A’’ and 

25 inserting ‘‘42, 42A, or 42B’’. 


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•S 2820 IS

1 (e) CLERICAL AMENDMENT.—The table of sections 

2 for subpart D of part IV of subchapter A of chapter 1 

3 of the Internal Revenue Code of 1986, as amended by sec4 tion 216, is further amended by inserting after the item 

5 relating to section 42A the following: 

‘‘Sec. 42B. Neighborhood homes credit.’’. 

6 (f) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to calendar years beginning after 

8 December 31, 2021. 

9 SEC. 218. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

10 (a) IN GENERAL.—Section 36 of the Internal Rev11 enue Code of 1986 is amended to read as follows: 

12 ‘‘SEC. 36. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

13 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in14 dividual who is a first-time homebuyer of a principal resi15 dence in the United States during a taxable year, there 

16 shall be allowed as a credit against the tax imposed by 

17 this subtitle for such taxable year an amount equal to 20 

18 percent of the purchase price of the residence. 

19 ‘‘(b) LIMITATIONS; SPECIAL RULES BASED ON MAR20 ITAL AND FILING STATUS.— 

21 ‘‘(1) DOLLAR LIMITATION.—The credit allowed 

22 under subsection (a) shall not exceed $15,000. 

23 ‘‘(2) LIMITATION BASED ON PURCHASE

24 PRICE.—The amount allowable as a credit under 

25 subsection (a) (determined without regard to this 


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•S 2820 IS

1 paragraph and paragraph (3), and after the applica2 tion of paragraph (1)) for the taxable year shall be 

3 reduced (but not below zero) by the amount which 

4 bears the same ratio to the amount which is so al5 lowable as— 

6 ‘‘(A) the excess (if any) of— 

7 ‘‘(i) the purchase price of the resi8 dence, over 

9 ‘‘(ii) an amount equal to 110 percent 

10 of the conforming loan limit applicable to 

11 the residence, bears to 

12 ‘‘(B) $100,000. 

13 For purposes of the preceding sentence, the term 

14 ‘conforming loan limit’ with respect to any residence 

15 means the applicable limitation governing the max16 imum original principal obligation for a mortgage se17 cured by a residence of the same type, as determined 

18 and adjusted annually under section 302(b)(2) of 

19 the Federal National Mortgage Association Charter 

20 Act and section 305(a)(2) of the Federal Home 

21 Loan Mortgage Corporation Act. 

22 ‘‘(3) LIMITATION BASED ON MODIFIED AD23 JUSTED GROSS INCOME.— 

24 ‘‘(A) IN GENERAL.—The amount allowable 

25 as a credit under subsection (a) (determined 


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•S 2820 IS

1 without regard to this paragraph and after the 

2 application of paragraphs (1) and (2)) for the 

3 taxable year shall be reduced (but not below 

4 zero) by the amount which bears the same ratio 

5 to the amount which is so allowable as— 

6 ‘‘(i) the excess (if any) of— 

7 ‘‘(I) the taxpayer’s modified ad8 justed gross income for the preceding 

9 taxable year, over 

10 ‘‘(II) the applicable threshold, 

11 bears to 

12 ‘‘(ii) $50,000. 

13 ‘‘(B) MODIFIED ADJUSTED GROSS IN14 COME.—For purposes of subparagraph (A), the 

15 term ‘modified adjusted gross income’ with re16 spect to any taxable year means the adjusted 

17 gross income of the taxpayer for such taxable 

18 year increased by any amount excluded from 

19 gross income under section 911, 931, or 933 

20 for such taxable year. 

21 ‘‘(C) APPLICABLE THRESHOLD.—For pur22 poses of subparagraph (A), the applicable 

23 threshold is— 

24 ‘‘(i) except as provided in clauses (ii) 

25 and (iii), $100,000, 


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•S 2820 IS

1 ‘‘(ii) an amount equal to 150 percent 

2 of the amount in effect under clause (i), in 

3 the case of a head of household (as defined 

4 in section 2(b)), and 

5 ‘‘(iii) an amount equal to 200 percent 

6 of the amount in effect under clause (i), in 

7 the case of a joint return. 

8 ‘‘(4) ADDITIONAL LIMITATIONS.—No credit 

9 shall be allowed under subsection (a) with respect to 

10 the purchase of any residence for a taxable year— 

11 ‘‘(A) if the taxpayer is a nonresident alien, 

12 or 

13 ‘‘(B) if— 

14 ‘‘(i) the taxpayer has not attained age 

15 18 as of the date of such purchase, or 

16 ‘‘(ii) a deduction under section 151 

17 with respect to the taxpayer is allowable to 

18 another taxpayer for the taxable year. 

19 In the case of a taxpayer who is married, the tax20 payer shall be treated as meeting the age require21 ment of subparagraph (B)(i) if the taxpayer or the 

22 taxpayer’s spouse meets such age requirement. 

23 ‘‘(5) MULTIPLE PURCHASERS.—If 2 or more in24 dividuals who are not married purchase a principal 

25 residence, the amount of the credit under subsection 


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•S 2820 IS

1 (a) shall be allocated among such individuals in such 

2 manner as the Secretary may prescribe by taking 

3 into account the requirements of paragraphs (2) and 

4 (3), except that the total amount of the credits al5 lowed to all such individuals shall not exceed the 

6 limitation under paragraph (1) (as modified by para7 graph (7)). 

8 ‘‘(6) MARRIED COUPLES MUST FILE JOINT RE9 TURN.—If an individual is married at the close of 

10 the taxable year, the credit shall be allowed under 

11 subsection (a) only if the individual and the individ12 ual’s spouse file a joint return for the taxable year. 

13 ‘‘(7) ADJUSTMENT FOR INFLATION.—In the 

14 case of any taxable year beginning after December 

15 31, 2022, each of the dollar amounts in paragraphs 

16 (1), (2)(A)(ii), and (3)(C)(i) shall be increased by an 

17 amount equal to— 

18 ‘‘(A) such dollar amount, multiplied by 

19 ‘‘(B) the cost-of-living adjustment deter20 mined under section 1(f)(3) for the calendar 

21 year in which the taxable year begins, deter22 mined by substituting ‘calendar year 2021’ for 

23 ‘calendar year 2016’ in subparagraph (A)(ii) 

24 thereof. 


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•S 2820 IS

1 Any increase determined under the preceding sen2 tence shall be rounded to the next lowest multiple of 

3 $50. 

4 ‘‘(c) DEFINITIONS.—For purposes of this section— 

5 ‘‘(1) FIRST-TIME HOMEBUYER.— 

6 ‘‘(A) IN GENERAL.—The term ‘first-time 

7 homebuyer’ means any individual who acquires 

8 a principal residence located in the United 

9 States by purchase if such individual (and, if 

10 married, such individual’s spouse)— 

11 ‘‘(i) has not claimed any credit or de12 duction under this title for any previous 

13 taxable year with respect to the purchase 

14 or ownership of any residence or residen15 tial real estate (including for any expendi16 tures relating to the placing in service of 

17 any property on, in connection with, or for 

18 use in such a residence or real estate), and 

19 ‘‘(ii) attests under penalty of perjury 

20 that— 

21 ‘‘(I) the individual (and, if mar22 ried, the individual’s spouse) has not 

23 owned a principal residence at any 

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•S 2820 IS

1 cipal residence to which this section 

2 applies, and 

3 ‘‘(II) the principal residence to 

4 which this section applies was not ac5 quired from a person related to such 

6 individual or spouse. 

7 ‘‘(B) WAIVER IN CASE OF CERTAIN

8 CHANGES IN STATUS.—The Secretary may, in 

9 such manner as the Secretary may prescribe, 

10 waive the requirements of subparagraph (A) for 

11 a taxable year in the case of an individual who 

12 is not eligible to file a joint return for the tax13 able year, and who was married at the time the 

14 individual or the individual’s former spouse pur15 chased a previous residence. 

16 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin17 cipal residence’ has the same meaning as when used 

18 in section 121. 

19 ‘‘(3) PURCHASE.— 

20 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

21 means any acquisition, but only if— 

22 ‘‘(i) the property is not acquired from 

23 a person related to the person acquiring 

24 such property (or, if either such person is 

25 married, such individual’s spouse), and 


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•S 2820 IS

1 ‘‘(ii) the basis of the property in the 

2 hands of the person acquiring such prop3 erty is not determined— 

4 ‘‘(I) in whole or in part by ref5 erence to the adjusted basis of such 

6 property in the hands of the person 

7 from whom acquired, or 

8 ‘‘(II) under section 1014(a). 

9 ‘‘(B) CONSTRUCTION.—A residence which 

10 is constructed by the taxpayer shall be treated 

11 as purchased by the taxpayer on the date the 

12 taxpayer first occupies such residence. 

13 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

14 price’ means the adjusted basis (without regard to 

15 any reduction under section 1016(a)(38)) of the 

16 principal residence on the date such residence is pur17 chased. 

18 ‘‘(5) RELATED PERSONS.—A person shall be 

19 treated as related to another person if the relation20 ship between such persons would result in the dis21 allowance of losses under section 267 or 707(b) (but, 

22 in applying subsections (b) and (c) of section 267 

23 for purposes of this section, paragraph (4) of section 

24 267(c) shall be treated as providing that the family 

25 of an individual shall include only the individual’s 


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•S 2820 IS

1 spouse, ancestors, lineal descendants, and spouse’s 

2 ancestors and lineal descendants). 

3 ‘‘(6) MARITAL STATUS.—An individual’s mar4 ital status shall be determined in accordance with 

5 section 7703. 

6 ‘‘(d) DENIAL AND RECAPTURE RULES IN CASE OF

7 DISPOSAL OF RESIDENCE WITHIN 6 TAXABLE YEARS.— 

8 ‘‘(1) DENIAL OF CREDIT IN CASE OF DISPOSAL

9 WITHIN TAXABLE YEAR.—No credit under sub10 section (a) shall be allowed to any taxpayer for any 

11 taxable year with respect to the purchase of a resi12 dence if the taxpayer disposes of such residence (or 

13 such residence ceases to be the principal residence of 

14 the taxpayer (and, if married, the taxpayer’s 

15 spouse)) before the close of such taxable year. 

16 ‘‘(2) PHASED-OUT RECAPTURE.— 

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

18 subparagraph (D), if the taxpayer disposes of 

19 the residence with respect to which a credit was 

20 allowed under subsection (a) (or such residence 

21 ceases to be the principal residence of the tax22 payer (and, if married, the taxpayer’s spouse)) 

23 during the 5-taxable-year period beginning with 

24 the taxable year immediately following the cred25 it year, the tax imposed by this chapter for the 


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•S 2820 IS

1 taxable year in which such disposal (or ces2 sation) occurs shall be increased by an amount 

3 equal to the recapture percentage of the 

4 amount of the credit so allowed. 

5 ‘‘(B) CREDIT YEAR.—For purposes of sub6 paragraph (A), the term ‘credit year’ means the 

7 taxable year in which the credit under sub8 section (a) was allowed. 

9 ‘‘(C) RECAPTURE PERCENTAGE.—For pur10 poses of subparagraph (A), the recapture per11 centage with respect to any disposal or ces12 sation described in such subparagraph shall be 

13 determined in accordance with the following 

14 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. 

15 ‘‘(D) EXCEPTIONS.—This paragraph shall 

16 not apply in the case of a disposal or cessation 

17 described in subparagraph (A) which occurs 

18 after or incident to any of the following: 

19 ‘‘(i) Death of the taxpayer or the tax20 payer’s spouse. 

21 ‘‘(ii) Divorce of the taxpayer. 


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•S 2820 IS

1 ‘‘(iii) Involuntary conversion of the 

2 residence (within the meaning of section 

3 121(d)(5)(A)). 

4 ‘‘(iv) Relocation of duty station or 

5 qualified official extended duty (as defined 

6 in section 121(d)(9)(C)) of the taxpayer or 

7 the taxpayer’s spouse who is a member of 

8 the uniformed services (as defined in sec9 tion 121(d)(9)(C)(ii)), a member of the 

10 Foreign Service of the United States (as 

11 defined in section 121(d)(9)(C)(iii)), or an 

12 employee of the intelligence community (as 

13 defined in section 121(d)(9)(C)(iv)). 

14 ‘‘(v) Change of employment of the 

15 taxpayer or the taxpayer’s spouse which 

16 meets the conditions of section 217(c). 

17 ‘‘(vi) Loss of employment, health con18 ditions, or such other unforeseen cir19 cumstances as may be specified by the Sec20 retary. 

21 ‘‘(e) ADJUSTMENT TO BASIS.—For purposes of this 

22 subtitle, if a credit is allowed under this section with re23 spect to any property, the taxpayer’s basis in such prop24 erty shall be reduced by the amount of the credit so al25 lowed. 


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•S 2820 IS

1 ‘‘(f) REPORTING.— 

2 ‘‘(1) IN GENERAL.—A credit shall be allowed 

3 under this section only if the following are included 

4 on the return of tax: 

5 ‘‘(A) The individual’s (and, if married, the 

6 individual’s spouse’s) social security number 

7 issued by the Social Security Administration. 

8 ‘‘(B) The street address (not including a 

9 post office box) of the principal residence pur10 chased. 

11 ‘‘(C) The purchase price of the principal 

12 residence. 

13 ‘‘(D) The date of purchase of the principal 

14 residence. 

15 ‘‘(E) The closing disclosure relating to the 

16 purchase (in the case of a purchase financed by 

17 a mortgage). 

18 ‘‘(2) REPORTING OF REAL ESTATE TRANS19 ACTIONS.—If the Secretary requires information re20 porting under section 6045 by a person described in 

21 subsection (e)(2) thereof to verify the eligibility of 

22 taxpayers for the credit allowable by this section, the 

23 exception provided by section 6045(e)(5) shall not 

24 apply.’’. 


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•S 2820 IS

1 (b) CONFORMING AMENDMENT RELATING TO BASIS

2 ADJUSTMENT.—Subsection (a) of section 1016 of the In3 ternal Revenue Code of 1986, as amended by section 216, 

4 is further amended— 

5 (1) by redesignating paragraphs (38) and (39) 

6 as paragraphs (39) and (40), respectively; and 

7 (2) by inserting after paragraph (37) the fol8 lowing new paragraph: 

9 ‘‘(38) to the extent provided in section 36(e).’’. 

10 (c) CONFORMING AMENDMENT.—Section 26(b)(2) of 

11 the Internal Revenue Code of 1986 is amended by striking 

12 subparagraph (W) and by redesignating subparagraphs 

13 (X) and (Y) as subparagraphs (W) and (X), respectively. 

14 (d) CLERICAL AMENDMENT.—The item relating to 

15 section 36 in the table of sections for subpart C of part 

16 IV of subchapter A of chapter 1 of the Internal Revenue 

17 Code of 1986 is amended to read as follows: 

‘‘Sec. 36. First-time homebuyer refundable credit.’’. 

18 (e) AUTHORITY TO TREAT CLAIM OF CREDIT AS

19 ERROR, ETC.—Subparagraph (N) of section 6213(g)(2) of 

20 the Internal Revenue Code of 1986 is amended to read 

21 as follows: 

22 ‘‘(N) in the case of a return claiming the 

23 credit under section 36— 

24 ‘‘(i) the omission of a social security 

25 number required under section 36(f)(1)(A), 


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•S 2820 IS

1 ‘‘(ii) the inclusion of a social security 

2 number so required if— 

3 ‘‘(I) the claim of the credit on 

4 the return reflects the treatment of 

5 such individual as being of an age dif6 ferent from the individual’s age based 

7 on such social security number, or 

8 ‘‘(II) except as provided in sec9 tion 36(c)(1)(B), such social security 

10 number has been included (other than 

11 as a dependent for purposes of section 

12 151) on a return for any previous tax13 able year claiming any credit or de14 duction described in section 

15 36(c)(1)(A)(i), 

16 ‘‘(iii) the omission of any other re17 quired information or documentation de18 scribed in section 36(f)(1), including the 

19 inclusion of a post office box instead of a 

20 street address for the purchased residence, 

21 ‘‘(iv) the inclusion of any information 

22 or documentation described in clause (iii) 

23 if such information or documentation does 

24 not support a valid claim for the credit, or 


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1 ‘‘(v) a claim of such credit for a tax2 able year with respect to the purchase of 

3 a residence made after the last day of such 

4 taxable year,’’. 

5 (f) IRS RECORDKEEPING.—Notwithstanding the lim6 itations on assessment and collection under section 6501 

7 of the Internal Revenue Code of 1986, the Commissioner 

8 of Internal Revenue shall maintain records of returns and 

9 return information (as defined in section 6103(b)(2) of 

10 such Code) of any taxpayer claiming the credit under sec11 tion 36 of such Code (as amended by this section) for the 

12 taxable year in which such credit is claimed and suc13 ceeding taxable years in the individual master files of the 

14 Internal Revenue Service. 

Æ 


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