I 

118TH CONGRESS 

2D SESSION H. R. 6970 

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

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 11, 2024 

Ms. HOYLE of Oregon (for herself and Mr. CARBAJAL) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committee on Financial Services, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To 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. 


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TITLE I—HOUSING ASSISTANCE 

Subtitle A—General Housing Assistance 

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. 

TITLE II—REVENUE PROVISIONS 

Sec. 201. Tax-exempt bond financing requirement. 

Sec. 202. Increases in State allocations. 

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

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

of certain buildings. 

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

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

credit agency. 

Sec. 207. Repeal of qualified contract option. 

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

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

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

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

affordable housing. 

Sec. 212. Renters credit. 

Sec. 213. Middle-income housing tax credit. 

Sec. 214. Neighborhood homes credit. 

Sec. 215. First-time homebuyer refundable credit. 


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1 TITLE I—HOUSING ASSISTANCE 

2 Subtitle A—General Housing 

3 Assistance 

4 SEC. 111. RENTAL VOUCHERS FOR THE HOMELESS. 

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

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

7 by adding at the end the following: 

8 ‘‘(22) RENTAL VOUCHERS FOR THE HOME9 LESS.— 

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

11 ‘‘(i) AT RISK OF HOMELESSNESS.— 

12 The term ‘at risk of homelessness’ has the 

13 meaning given the term in section 401(1) 

14 of the McKinney-Vento Homeless Assist15 ance Act (42 U.S.C. 11360), except that 

16 ‘50 percent’ shall be substituted for ‘30 

17 percent’ in subparagraph (A) of that sec18 tion. 

19 ‘‘(ii) CAPACITY-BUILDING PERIOD.— 

20 The term ‘capacity-building period’ means 

21 the 2-year period beginning on the date on 

22 which the formula is established under 

23 subparagraph (E)(ii). 

24 ‘‘(iii) CONTINUUM OF CARE.—The 

25 term ‘continuum of care’ has the meaning 


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1 given the term in section 578.3 of title 24, 

2 Code of Federal Regulations, or any suc3 cessor regulation. 

4 ‘‘(iv) ELIGIBLE PUBLIC HOUSING

5 AGENCY.—The term ‘eligible public hous6 ing agency’ means a public housing agency 

7 that— 

8 ‘‘(I) administers assistance under 

9 this subsection through a contract for 

10 annual contributions entered into with 

11 the Secretary; 

12 ‘‘(II) has a partnership with a 

13 public child welfare agency and a con14 tinuum of care that— 

15 ‘‘(aa) has a system for iden16 tifying and referring eligible re17 cipients for assistance under this 

18 paragraph from the public hous19 ing agency, including by pro20 viding a written certification that 

21 the eligible recipient is eligible to 

22 receive the assistance; and 

23 ‘‘(bb) will, to the greatest 

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1 portive services to those eligible 

2 recipients; and 

3 ‘‘(III) submits to the Secretary a 

4 statement describing— 

5 ‘‘(aa) how the public hous6 ing agency will connect eligible 

7 recipients with local community 

8 resources, to the extent available; 

9 and 

10 ‘‘(bb) the plan for use of ca11 pacity-building funding under 

12 subparagraph (E), including— 

13 ‘‘(AA) a timeline for 

14 the use of that funding with15 in the capacity-building pe16 riod; 

17 ‘‘(BB) hiring and per18 sonnel needs; 

19 ‘‘(CC) physical infra20 structure needs; and 

21 ‘‘(DD) technological in22 frastructure needs, including 

23 upgrades to the HMIS, and 

24 any other capacity-related 

25 investments that are necVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 essary to administer assist2 ance under this paragraph. 

3 ‘‘(v) ELIGIBLE RECIPIENT.—The term 

4 ‘eligible recipient’ means any individual or 

5 family experiencing homelessness or at risk 

6 of homelessness with an income that is less 

7 than 50 percent of the area median in8 come. 

9 ‘‘(vi) EXPERIENCING HOMELESSNESS; 

10 HOMELESS.—The terms ‘experiencing 

11 homelessness’ and ‘homeless’ means an in12 dividual or family who is— 

13 ‘‘(I) living in a place not meant 

14 for human habitation or in an emer15 gency shelter; 

16 ‘‘(II) living in transitional hous17 ing for homeless persons and was 

18 homeless before entering transitional 

19 housing or an emergency shelter; 

20 ‘‘(III) fleeing domestic violence; 

21 or 

22 ‘‘(IV) at risk of homelessness. 

23 ‘‘(vii) HMIS.—The term ‘HMIS’ 

24 means the community-wide homeless man25 agement information system described in 


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1 section 402(f)(3)(D) of the McKinney2 Vento Homeless Assistance Act (42 U.S.C. 

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

4 ‘‘(viii) PUBLIC HOUSING AGENCY.— 

5 The term ‘public housing agency’ includes 

6 a tribally designated housing entity. 

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

8 means an affirmative connection between 

9 the voucher recipient and the organization 

10 providing services to the voucher recipient. 

11 ‘‘(x) SERVICE COORDINATOR.—The 

12 term ‘service coordinator’ means an indi13 vidual employed directly by a public hous14 ing agency who provides general case man15 agement and referral services to each 

16 voucher recipient served by the public 

17 housing agency, which shall include— 

18 ‘‘(I) an individual intake screen19 ing of each voucher recipient to evalu20 ate the voucher recipient’s need for 

21 supportive services; and 

22 ‘‘(II) referral to outside services, 

23 including cooperation and collabora24 tion with a continuum of care. 


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1 ‘‘(xi) SOURCE OF INCOME.—The term 

2 ‘source of income’ means income from any 

3 lawful source, including— 

4 ‘‘(I) income from any legal em5 ployment; and 

6 ‘‘(II) any assistance, benefit, or 

7 subsidy through any Federal, State, 

8 or local program, whether the pro9 gram is administered by a govern10 mental or nongovernmental entity. 

11 ‘‘(xii) TRIBALLY DESIGNATED HOUS12 ING ENTITY.—The term ‘tribally des13 ignated housing entity’ has the meaning 

14 given the term in section 4 of the Native 

15 American Housing Assistance and Self-De16 termination Act of 1996 (25 U.S.C. 4103). 

17 ‘‘(xiii) VOUCHER RECIPIENT.—The 

18 term ‘voucher recipient’ means an indi19 vidual or family receiving a voucher under 

20 this paragraph. 

21 ‘‘(xiv) YOUTH.—The term ‘youth’ 

22 means an individual under the age of 25. 

23 ‘‘(B) VOUCHERS.— 

24 ‘‘(i) PROVISION OF VOUCHERS.— 


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1 ‘‘(I) IN GENERAL.—The Sec2 retary shall provide vouchers for rent3 al assistance on behalf of each eligible 

4 recipient in accordance with this para5 graph. 

6 ‘‘(II) DIRECT APPROPRIATION.— 

7 Subject to subclause (III), there is ap8 propriated, out of any money in the 

9 Treasury not otherwise appropriated, 

10 for providing rental voucher assistance 

11 under this paragraph for fiscal year 

12 2023 and each fiscal year thereafter— 

13 ‘‘(aa) the amount necessary 

14 to fund the provision of a vouch15 er for rental assistance under 

16 this paragraph on behalf of each 

17 eligible recipient; 

18 ‘‘(bb) the amount necessary 

19 to provide administrative fees 

20 under clause (ii) in connection to 

21 each voucher for rental assistance 

22 provided under this paragraph; 

23 and 

24 ‘‘(cc) the amount necessary 

25 to fund annual renewals of the 


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1 vouchers provided under this 

2 paragraph. 

3 ‘‘(III) NUMBER OF VOUCHERS.— 

4 The Secretary shall provide— 

5 ‘‘(aa) 250,000 vouchers 

6 under this paragraph in fiscal 

7 year 2023; and 

8 ‘‘(bb) 400,000 vouchers 

9 under this paragraph in each fis10 cal year thereafter until the Sec11 retary determines that a smaller 

12 number of vouchers is sufficient 

13 to provide all eligible recipients 

14 with vouchers. 

15 ‘‘(ii) ADMINISTRATIVE FEE FOR AN16 CILLARY COSTS.—The Secretary shall pro17 vide a public housing agency that requests 

18 a voucher under this paragraph an admin19 istrative fee sufficient to provide assistance 

20 to the voucher recipient for security depos21 its, moving costs, first or last month’s 

22 rent, or other significant barriers to estab23 lishing use of the voucher and a lease, in 

24 an amount that is not more than 3 

25 months’ rent for the voucher recipient. 


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1 ‘‘(iii) PAYMENT STANDARD.—The 

2 payment standard for a voucher provided 

3 under this paragraph may not exceed 125 

4 percent of the fair market rental in the ju5 risdiction in which the voucher is adminis6 tered. 

7 ‘‘(iv) SUPPLEMENTAL VOUCHER PAY8 MENT.— 

9 ‘‘(I) IN GENERAL.—An eligible 

10 public housing agency may supple11 ment the amount of a voucher pro12 vided under this paragraph in any 

13 case in which— 

14 ‘‘(aa) the amount of the 

15 voucher is insufficient to cover 

16 the cost of a dwelling unit within 

17 the jurisdiction of the eligible 

18 public housing agency and that 

19 insufficiency may result in a 

20 voucher recipient losing housing 

21 and becoming homeless or dou22 bled up; or 

23 ‘‘(bb) the eligible public 

24 housing agency submits to the 

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1 calculation of the small area fair 

2 market rent applicable to the 

3 dwelling unit, which the Sec4 retary shall approve or deny 

5 within 45 days of submission of 

6 the request. 

7 ‘‘(II) PAYMENT UPON DENIAL.— 

8 An eligible public housing agency may 

9 supplement the amount of a voucher 

10 under subclause (I) even if the Sec11 retary denies the request submitted 

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

13 the supplementation of the voucher 

14 amount is necessary to maintain hous15 ing for the voucher recipient. 

16 ‘‘(v) CONDITIONS ON ASSISTANCE.— 

17 Notwithstanding any other provision of 

18 law, the Secretary— 

19 ‘‘(I) may not condition receipt of 

20 a voucher under this paragraph on— 

21 ‘‘(aa) participation in any 

22 service or program; or 

23 ‘‘(bb) the sobriety or lack 

24 thereof of an eligible recipient; 


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1 ‘‘(II) except as provided in sub2 clause (III), may not prohibit receipt 

3 of a voucher under this paragraph by 

4 an otherwise eligible recipient due to 

5 any criminal conviction or history of 

6 interaction with the criminal justice 

7 system; and 

8 ‘‘(III) shall prohibit receipt of a 

9 voucher under this paragraph by indi10 viduals subject to a lifetime registra11 tion requirement under any State sex 

12 offender registration program. 

13 ‘‘(vi) VERIFICATION OF STATEMENT

14 MADE BY ELIGIBLE PUBLIC HOUSING

15 AGENCIES.— 

16 ‘‘(I) IN GENERAL.—Not later 

17 than 30 days after the date on which 

18 an eligible public housing agency sub19 mits the statement required under 

20 subparagraph (A)(iv)(III), the Sec21 retary shall verify the statement. 

22 ‘‘(II) UNSATISFACTORY STATE23 MENT.—If, upon verification of a 

24 statement under subclause (I), the 

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1 ment is unsatisfactory, the Secretary 

2 shall inform the eligible public hous3 ing agency of that determination and 

4 the manner in which the eligible pub5 lic housing agency may re-submit the 

6 statement. 

7 ‘‘(vii) IDENTIFICATION OF ELIGIBLE

8 RECIPIENTS.—A public housing agency 

9 shall partner with continuums of care, 

10 public child welfare agencies, street out11 reach providers, health care providers, and 

12 other similar organizations in the State in 

13 which the public housing agency operates 

14 to identify eligible recipients. 

15 ‘‘(viii) REQUIREMENTS FOR ELIGIBLE

16 PUBLIC HOUSING AGENCIES.— 

17 ‘‘(I) IN GENERAL.—Each eligible 

18 public housing agency providing as19 sistance under this paragraph shall— 

20 ‘‘(aa) on an annual basis 

21 and in conjunction with income 

22 reviews for purposes of deter23 mining income eligibility for as24 sistance under this paragraph, 

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1 ble public housing agency with 

2 the eligibility requirements under 

3 this paragraph; and 

4 ‘‘(bb) to the greatest extent 

5 possible— 

6 ‘‘(AA) work with con7 tinuums of care to ensure 

8 continuity of data collection 

9 under this paragraph; and 

10 ‘‘(BB) utilize the HMIS 

11 to collect and main the in12 formation required to be col13 lected under this paragraph. 

14 ‘‘(II) PRIORITY.—In providing 

15 vouchers under this paragraph, an eli16 gible public housing agency— 

17 ‘‘(aa) shall prioritize the 

18 first vouchers made available 

19 under this section for eligible re20 cipients who are— 

21 ‘‘(AA) unaccompanied 

22 homeless youth; 

23 ‘‘(BB) homeless youth 

24 with minor children; or 


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1 ‘‘(CC) families with 

2 minor children experiencing 

3 homelessness; 

4 ‘‘(bb) to the extent possible 

5 considering when the Secretary 

6 disburses funds under this para7 graph, shall provide vouchers to 

8 the eligible recipients described in 

9 item (aa) not later than 1 year 

10 after the end of the capacity11 building period; and 

12 ‘‘(cc) may not issue vouchers 

13 to eligible recipients not de14 scribed in item (aa) until the eli15 gible public housing agency has 

16 issued vouchers to all eligible re17 cipients described in that item. 

18 ‘‘(ix) USE OF VOUCHER UPON EXIT.— 

19 An eligible public housing agency that 

20 issued a voucher to an eligible recipient 

21 that is no longer in use by the eligible re22 cipient may provide the voucher to any 

23 other tenant eligible for tenant-based as24 sistance under this subsection. 

25 ‘‘(C) DATA COLLECTION.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall submit to Congress an annual report 

3 on assistance providing under this para4 graph, which shall include— 

5 ‘‘(I) an assessment of the 

6 progress of States toward housing— 

7 ‘‘(aa) eligible recipients in 

8 the State; and 

9 ‘‘(bb) the total population of 

10 people experiencing homelessness 

11 in the State; and 

12 ‘‘(II) the information provided 

13 under clause (ii). 

14 ‘‘(ii) INFORMATION FROM PUBLIC

15 HOUSING AGENCIES.—Each eligible public 

16 housing agency administering assistance 

17 under this paragraph shall submit to the 

18 Secretary and to the State in which the 

19 public housing agency is located an annual 

20 report for each fiscal year that includes— 

21 ‘‘(I) the number of voucher re22 cipients, including aggregated demo23 graphic information on the age, sex, 

24 gender identity, sexual orientation, 

25 race, ethnicity, and disability status of 


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1 each such recipient in a manner that 

2 does not reveal the personally identifi3 able information of each such recipi4 ent; 

5 ‘‘(II) the number of eligible re6 cipients who applied during the fiscal 

7 year for assistance under this para8 graph, but were not provided assist9 ance; 

10 ‘‘(III) a brief identification in 

11 each instance described in subclause 

12 (II) of the reason why the eligible 

13 public housing agency was unable to 

14 provide the assistance; and 

15 ‘‘(IV) a description of how the el16 igible public housing agency commu17 nicated or collaborated with public 

18 child welfare agencies and continuums 

19 of care to collect the data described in 

20 subclauses (I) and (II). 

21 ‘‘(D) SUPPORTIVE SERVICES.— 

22 ‘‘(i) ADMINISTRATIVE FEE.— 

23 ‘‘(I) IN GENERAL.—The Sec24 retary shall establish a fee under sub25 section (q) for the costs incurred by 


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1 public housing agencies in admin2 istering vouchers under this para3 graph. 

4 ‘‘(II) COSTS.—In establishing the 

5 fee described in subclause (I), the Sec6 retary shall include the costs to public 

7 housing agencies of employing full8 time or full-time-equivalent service co9 ordinators. 

10 ‘‘(III) AUTHORIZATION OF AP11 PROPRIATIONS.—There is authorized 

12 to be appropriated $300,000,000 for 

13 each of fiscal years 2023 through 

14 2028 for the fee described in sub15 clause (I). 

16 ‘‘(ii) HIRING OF SERVICE COORDINA17 TORS.— 

18 ‘‘(I) IN GENERAL.—An eligible 

19 public housing agency shall hire the 

20 appropriate number of service coordi21 nators to administer supportive serv22 ices under this paragraph in partner23 ship with the public child welfare 

24 agency or continuum of care in a ju25 risdiction. 


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1 ‘‘(II) INSUFFICIENT FUNDS.—If 

2 an eligible public housing agency is 

3 unable to hire an appropriate number 

4 of service coordinators under sub5 clause (I) using the fee described in 

6 clause (i)(I)— 

7 ‘‘(aa) the public housing 

8 agency may request an increased 

9 administrative fee from the Sec10 retary; and 

11 ‘‘(bb) the Secretary shall ap12 prove or deny a request received 

13 under item (aa) within 45 days. 

14 ‘‘(III) REPORT TO CONGRESS.— 

15 Beginning in the first full fiscal year 

16 after the date of enactment of this 

17 paragraph, the Secretary shall submit 

18 an annual report to Congress on re19 quests for increased administrative 

20 fees received from public housing 

21 agencies under subclause (II). 

22 ‘‘(IV) APPROPRIATE NUMBER

23 DEFINED.—For purposes of this 

24 clause, the term ‘appropriate number’, 

25 with respect to service coordinators, 


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1 means enough service coordinators so 

2 that each household provided a vouch3 er by a public housing agency under 

4 this paragraph is able to access a 

5 service coordinator for not less than 

6 30 minutes each week. 

7 ‘‘(iii) PROVISION OF SERVICES.— 

8 Upon intake of an eligible recipient, a pub9 lic housing agency or a public child welfare 

10 agency or continuum of care with which 

11 the public housing agency has partnered 

12 shall— 

13 ‘‘(I) assign the voucher recipient 

14 a case manager or service coordinator; 

15 and 

16 ‘‘(II) provide or secure the provi17 sion of supportive services to con18 tribute to the housing stability of the 

19 voucher recipient, including— 

20 ‘‘(aa) any supportive service, 

21 as defined in section 401 of the 

22 McKinney-Vento Homeless As23 sistance Act (42 U.S.C. 11360); 

24 ‘‘(bb) referrals to health 

25 care providers, including mental 


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1 health care providers, dental 

2 health care providers, and vision 

3 health care providers; 

4 ‘‘(cc) referrals to substance 

5 use disorder treatment, including 

6 recovery, treatment, 12-step pro7 grams, relapse prevention, or 

8 medication-assisted treatment; 

9 ‘‘(dd) assistance relating to 

10 enrollment in the Medicare or 

11 Medicaid programs under titles 

12 XVIII and XIX of the Social Se13 curity Act (42 U.S.C. 1395 et 

14 seq., 1396 et seq.), respectively, 

15 and referrals to other services, 

16 including— 

17 ‘‘(AA) the supplemental 

18 nutrition assistance program 

19 under the Food and Nutri20 tion Act of 2008 (7 U.S.C. 

21 2011 et seq.) (commonly 

22 known as the ‘SNAP Pro23 gram’); and 

24 ‘‘(BB) the program of 

25 block grants for States for 


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1 temporary assistance for 

2 needy families established 

3 under part A of title IV of 

4 the Social Security Act (42 

5 U.S.C. 601 et seq.) (com6 monly known as the ‘TANF 

7 Program’); 

8 ‘‘(ee) advising on eligibility 

9 for the family self-sufficiency 

10 program established, credit coun11 seling, and housing counseling 

12 programs; 

13 ‘‘(ff) referrals to education 

14 services, including general edu15 cational development (commonly 

16 known as ‘GED’) preparation 

17 and testing, enrollment in post18 secondary education programs, 

19 and credit recovery; and 

20 ‘‘(gg) facilitation of trans21 portation assistance to any of the 

22 supportive services described in 

23 this subparagraph. 


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1 ‘‘(iv) ELIGIBILITY OF PRIVATE NON2 PROFIT ORGANIZATIONS AND FAITH-BASED

3 ORGANIZATIONS.— 

4 ‘‘(I) DEFINITIONS.—In this 

5 clause, the terms ‘eligible entity’ and 

6 ‘private nonprofit organization’ have 

7 the meanings given those terms in 

8 section 401 of the McKinney-Vento 

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

10 11360). 

11 ‘‘(II) ELIGIBILITY.—Notwith12 standing any other provision of law— 

13 ‘‘(aa) the Secretary shall 

14 provide that private nonprofit or15 ganizations that are eligible enti16 ties, including faith-based private 

17 nonprofit organizations that are 

18 eligible entities, shall be eligible 

19 to— 

20 ‘‘(AA) provide services 

21 described in clause (iii); and 

22 ‘‘(BB) receive amounts 

23 made available to carry out 

24 clause (iii); and 


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1 ‘‘(bb) in determining eligi2 bility for amounts made available 

3 to carry out clause (iii), the sta4 tus of an entity as faith-based or 

5 the possibility that an entity may 

6 be faith-based may not be a basis 

7 for any discrimination against 

8 such entity in any manner or for 

9 any purpose. 

10 ‘‘(v) ACCESS.—Services provided 

11 under this subparagraph shall be available 

12 to voucher recipients with low-to-no barrier 

13 access. 

14 ‘‘(vi) EVALUATION.—An eligible pub15 lic housing agency, public child welfare 

16 agency, or continuum of care described in 

17 clause (iii) shall evaluate each voucher re18 cipient for individual case management 

19 needs under this subparagraph. 

20 ‘‘(E) CAPACITY BUILDING.— 

21 ‘‘(i) AUTHORIZATION OF APPROPRIA22 TIONS.—There is authorized to be appro23 priated to the Secretary $500,000,000 for 

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1 vide funding for capacity building to eligi2 ble public housing agencies. 

3 ‘‘(ii) FUNDING FORMULA.—Not later 

4 than 45 days after the date of enactment 

5 of this paragraph, the Secretary shall es6 tablish a formula for allocating the funding 

7 authorized under clause (i) that takes into 

8 account— 

9 ‘‘(I) the ratio of individuals in 

10 the State in which the eligible public 

11 housing agency operates who are 

12 homeless to the overall population of 

13 the State; 

14 ‘‘(II) the proportion of families in 

15 each State with children experiencing 

16 unsheltered homelessness, as reported 

17 in the State’s most recent point-in18 time count, to the total number of 

19 unsheltered homeless families in the 

20 State as reported in the same point21 in-time count; and 

22 ‘‘(III) the rate of unsheltered 

23 homelessness in each State compared 

24 to each other State, as reported in 


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

2 count. 

3 ‘‘(iii) DISBURSEMENT.—Not later 

4 than 30 days after an eligible public hous5 ing agency submits an acceptable state6 ment under subparagraph (A)(iv)(III), the 

7 Secretary shall disburse amounts author8 ized under clause (i) of this subparagraph 

9 in accordance with the formula established 

10 under clause (ii) of this subparagraph. 

11 ‘‘(iv) MINIMUM AND MAXIMUM ALLO12 CATION.—The Secretary shall ensure 

13 that— 

14 ‘‘(I) each eligible public housing 

15 agency does not receive more than 10 

16 percent of the amount authorized 

17 under clause (i); and 

18 ‘‘(II) each State in which an eli19 gible public housing agency receives 

20 funds under clause (i) does not receive 

21 more than 25 percent of the total 

22 amount authorized under that clause. 

23 ‘‘(v) ELIGIBLE ACTIVITIES.—A recipi24 ent of funds authorized under clause (i) 

25 may only use the funds for— 


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1 ‘‘(I) hiring and personnel needs, 

2 such as case managers and housing 

3 placement advisory; 

4 ‘‘(II) physical infrastructure— 

5 ‘‘(aa) including increased of6 fice space or facilities for the pro7 vision of supportive services; and 

8 ‘‘(bb) not including residen9 tial housing; 

10 ‘‘(III) technological infrastruc11 ture needs, including upgrades to the 

12 HMIS; and 

13 ‘‘(IV) any other capacity-related 

14 investments that are necessary for the 

15 public housing agency to— 

16 ‘‘(aa) develop, acquire, or re17 habilitate housing that is afford18 able to extremely low-income 

19 families, to be made available to 

20 people experiencing homelessness; 

21 or 

22 ‘‘(bb) support the successful 

23 administration of the vouchers 

24 under this paragraph. 


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1 ‘‘(vi) REQUIREMENT FOR EXPENDI2 TURE OF FUNDS.—Each eligible public 

3 housing agency that receives funds under 

4 clause (i) shall expend not less than 60 

5 percent of the funding during the 2-year 

6 period following receipt of the funding. 

7 ‘‘(F) STATE ACCOUNTABILITY.— 

8 ‘‘(i) IN GENERAL.—Each eligible pub9 lic housing agency providing assistance 

10 under this paragraph shall— 

11 ‘‘(I) on a monthly basis, report 

12 caseload and voucher administration 

13 statistics to the State in which the 

14 agency operates; and 

15 ‘‘(II) twice annually, submit to 

16 the State in which the agency oper17 ates a report on the progress toward 

18 issuing a voucher under this para19 graph to all eligible recipients, based 

20 on— 

21 ‘‘(aa) the percentage reduc22 tion in the number of families 

23 with children and youth that are 

24 experiencing homelessness in the 

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1 erates, as determined by com2 paring the most recent point-in3 time count with the point-in-time 

4 count conducted 1 year prior; 

5 and 

6 ‘‘(bb) the percentage reduc7 tion in the number of children 

8 experiencing homelessness in the 

9 State, as documented under the 

10 requirements of the program au11 thorized under subtitle B of title 

12 VII of the McKinney-Vento 

13 Homeless Assistance Act (42 

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

15 ‘‘(ii) BENCHMARKS.—Each year, each 

16 State shall meet the benchmarks described 

17 in this clause, based equally on the per18 centage reduction in reported population of 

19 children and families experiencing home20 lessness in the following year’s point-in21 time count and the percentage reduction in 

22 population of students experiencing home23 lessness: 


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1 ‘‘(I) ANNUAL REPORT.—Each 

2 State shall submit an annual report to 

3 the Secretary that contains— 

4 ‘‘(aa) data collected from 

5 schools pursuant to the program 

6 authorized under subtitle B of 

7 title VII of the McKinney-Vento 

8 Homeless Assistance Act (42 

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

10 the number of students— 

11 ‘‘(AA) experiencing 

12 unsheltered homelessness; 

13 ‘‘(BB) living in shel14 ters; 

15 ‘‘(CC) living in motels, 

16 hotels, or campgrounds; 

17 ‘‘(DD) living in a car or 

18 other motor vehicle; or 

19 ‘‘(EE) sharing the 

20 housing of other persons due 

21 to loss of housing, economic 

22 hardship, or similar rea23 soning; and 

24 ‘‘(bb) the information re25 ceived from each public housing 


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1 agency in the State under clause 

2 (i)(II). 

3 ‘‘(II) ISSUANCE OF VOUCHERS

4 FOR SMALLER STATES.—Each State 

5 with a rate of homelessness that is 

6 not higher than 10 people per 10,000 

7 shall— 

8 ‘‘(aa) not later than 2 years 

9 after the end of the capacity10 building period— 

11 ‘‘(AA) issue vouchers 

12 under this paragraph to not 

13 less than 50 percent of the 

14 population of people experi15 encing homelessness in the 

16 State, using data from the 

17 most recent point-in-time 

18 count; and 

19 ‘‘(BB) to the greatest 

20 extent possible, prioritize the 

21 issuance of those vouchers 

22 to eligible youth and fami23 lies; 


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1 ‘‘(bb) not later than 3 years 

2 after the end of the capacity3 building period— 

4 ‘‘(AA) issue vouchers 

5 under this paragraph to not 

6 less than 70 percent of the 

7 population of people experi8 encing homelessness in the 

9 State, using data from the 

10 most recent point-in-time 

11 count; and 

12 ‘‘(BB) to the greatest 

13 extent possible, prioritize the 

14 issuance of those vouchers 

15 to eligible youth and fami16 lies; and 

17 ‘‘(cc) not later than 4 years 

18 after the end of the capacity19 building period, issue vouchers 

20 under this paragraph to all peo21 ple experiencing homelessness in 

22 the State. 

23 ‘‘(III) ISSUANCE OF VOUCHERS

24 FOR LARGER STATES.—Each State 

25 with a rate of homelessness that is 


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1 higher than 10 people per 10,000 

2 shall— 

3 ‘‘(aa) not later than 2 years 

4 after the end of the capacity5 building period— 

6 ‘‘(AA) issue vouchers 

7 under this paragraph to not 

8 less than 40 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; 

19 ‘‘(bb) not later than 3 years 

20 after the end of the capacity21 building period— 

22 ‘‘(AA) issue vouchers 

23 under this paragraph to not 

24 less than 60 percent of the 

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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; and 

10 ‘‘(cc) not later than 4 years 

11 after the end of the capacity12 building period, issue vouchers 

13 under this paragraph to all peo14 ple experiencing homelessness in 

15 the State. 

16 ‘‘(iii) PENALTIES.— 

17 ‘‘(I) WARNING.—Except as pro18 vided in clause (v), if a State does not 

19 meet the applicable benchmarks de20 scribed in clause (ii), the Secretary 

21 shall publicly warn the State of the 

22 failure of the State to meet the bench23 mark and remind the State of the ap24 plicable penalties. 


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1 ‘‘(II) REDUCTION IN FEDERAL

2 HIGHWAY FUNDS.—If a State does 

3 not meet the applicable benchmarks 

4 described in clause (ii)— 

5 ‘‘(aa) by the date that is 

6 180 days after the warning by 

7 the Secretary under subclause (I) 

8 of this clause, the Federal share 

9 payable for Federal-aid highway 

10 projects under section 120 of 

11 title 23, United States Code, 

12 shall be reduced by 5 percent; or 

13 ‘‘(bb) by the date that is 

14 180 days after a reduction made 

15 under item (aa) of this subclause, 

16 the Federal share payable for 

17 Federal-aid highway projects 

18 under section 120 of title 23, 

19 United States Code, shall be fur20 ther reduced by 5 percent. 

21 ‘‘(iv) CONDITION ON COMPLIANCE.— 

22 Beginning in the first Notice of Funding 

23 Availability cycle beginning after the date 

24 of enactment of this paragraph, and every 

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1 after, the Secretary shall condition the 

2 awarding of all funding for vouchers under 

3 this paragraph by the Secretary to a public 

4 housing authority in a State on that 

5 State’s compliance with the benchmarks 

6 described in clause (ii). 

7 ‘‘(v) UNEMPLOYMENT RATE.—If the 

8 quarterly unemployment rate of the popu9 lation of a State is not less than 6 per10 cent— 

11 ‘‘(I) the State shall not be penal12 ized under clause (iii) for failure to 

13 meet the benchmarks described in 

14 clause (ii); and 

15 ‘‘(II) the State shall be required 

16 to meet the benchmarks described in 

17 clause (ii) not later than 180 days 

18 after the date on which the quarterly 

19 unemployment rate descends beneath 

20 6 percent. 

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

22 ‘‘(i) AUTHORIZATION OF APPROPRIA23 TIONS.—There is authorized to be appro24 priated $15,000,000 for each of fiscal 

25 years 2023 through 2027 to the Secretary 


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1 for the administrative needs of the Depart2 ment of Housing and Urban Development 

3 and regional offices of the Department in 

4 carrying out the voucher program under 

5 this paragraph. 

6 ‘‘(ii) PROHIBITION.—None of the 

7 funds made available under this subpara8 graph may be used to provide raises or bo9 nuses to any employee of the Department 

10 of Housing and Urban Development in an 

11 amount that is more than 10 percent of 

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

13 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

14 Effective on December 29, 2024, paragraph (22) of sec15 tion 8(o) of the United States Housing Act of 1937 (42 

16 U.S.C. 1437f(o)), as added by subsection (a), is redesig17 nated as paragraph (23) and shall appear after paragraph 

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

19 Consolidated Appropriations Act, 2023 (Public Law 117– 

20 328). 

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 2023 through 2033 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 2023 through 2028 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 (22)(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 

23 111 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 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 2023 through 2028 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 2023 through 2028. 

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 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 2023 through 2033 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 2023 through 2033 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 2023 

13 through 2033 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 2023 through 2033 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 

25 Secretary offers to restructure a loan pursuant to subVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 

25 maturation or prepayment to transfer the rental assistVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 2023 

14 through 2028.’’. 

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 SECTIONS

19 514, 515, AND 516 PROJECTS.—The Secretary may pro20 vide rural housing vouchers under this section for any low21 income 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 03:58 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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 2023 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 

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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 TITLE II—REVENUE PROVISIONS 

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

24 (a) IN GENERAL.—Section 42(h)(4)(B) of the Inter25 nal Revenue Code of 1986 is amended to read as follows: 


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1 ‘‘(B) SPECIAL RULE WHERE A REQUIRED

2 PERCENT OF BUILDINGS IS FINANCED WITH

3 TAX-EXEMPT BONDS SUBJECT TO VOLUME

4 CAP.—For purposes of subparagraph (A), para5 graph (1) shall not apply to any portion of the 

6 credit allowable under subsection (a) with re7 spect to a building if— 

8 ‘‘(i) 50 percent or more of the aggre9 gate basis of any such building and the 

10 land on which the building is located is fi11 nanced by any obligation described in sub12 paragraph (A), or 

13 ‘‘(ii) 25 percent or more of the aggre14 gate basis of such building and the land on 

15 which the building is located is financed by 

16 any obligation which is described in sub17 paragraph (A) and issued in calendar year 

18 2024, 2025, 2026, 2027, or 2028.’’. 

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

20 this section shall apply to any building some portion of 

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

22 financed by an obligation which is described in section 

23 42(h)(4)(A) and which is part of an issue the issue date 

24 of which is after December 31, 2023. 


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1 SEC. 202. INCREASES IN STATE ALLOCATIONS. 

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

3 of the Internal Revenue Code is amended— 

4 (1) by striking ‘‘$1.75’’ in subclause (I) and in5 serting ‘‘the per capita amount’’, and 

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

7 and inserting ‘‘the minimum amount’’. 

8 (b) PER CAPITA AMOUNT; MINIMUM AMOUNT.—Sec9 tion 42(h)(3) of the Internal Revenue Code of 1986 is 

10 amended by striking subparagraphs (H) and (I) and in11 serting the following: 

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

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

14 amount shall be determined as follows: 

15 ‘‘(i) CALENDAR YEAR 2023.—For cal16 endar year, 2023, the per capita amount is 

17 $3.90. 

18 ‘‘(ii) CALENDAR YEAR 2024.—For cal19 endar year 2024, the per capita amount is 

20 the product of— 

21 ‘‘(I) 1.25, and 

22 ‘‘(II) the dollar amount under 

23 clause (i) increased by an amount 

24 equal to— 

25 ‘‘(aa) such dollar amount, 

26 multiplied by 


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1 ‘‘(bb) the cost-of-living ad2 justment determined under sec3 tion 1(f)(3) for such calendar 

4 year, determined by substituting 

5 ‘calendar year 2022’ for ‘cal6 endar year 2016’ in subpara7 graph (A)(ii) thereof. 

8 If the amount determined after application of 

9 the preceding sentence is not a multiple of 

10 $5,000, such amount shall be rounded to the 

11 next lowest multiple of $5,000. 

12 ‘‘(iii) CALENDAR YEARS AFTER

13 2024.—In the case of any calendar year 

14 after 2024, the per capita amount is the 

15 dollar amount determined under clause (ii) 

16 increased by an amount equal 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, determined by 

22 substituting ‘calendar year 2023’ for 

23 ‘calendar year 2016’ in subparagraph 

24 (A)(ii) thereof. 


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1 Any amount increased under the preceding 

2 sentence which is not a multiple of 5 cents 

3 shall be rounded to the next lowest mul4 tiple of 5 cents. 

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

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

7 shall be determined as follows: 

8 ‘‘(i) CALENDAR YEAR 2023.—For cal9 endar year, 2023, the minimum amount is 

10 $4,495,000. 

11 ‘‘(ii) CALENDAR YEAR 2024.—For cal12 endar year 2024, the minimum amount is 

13 the product of— 

14 ‘‘(I) 1.25, and 

15 ‘‘(II) the dollar amount under 

16 clause (i) increased by an amount 

17 equal to— 

18 ‘‘(aa) such dollar amount, 

19 multiplied by 

20 ‘‘(bb) the cost-of-living ad21 justment determined under sec22 tion 1(f)(3) for such calendar 

23 year, determined by substituting 

24 ‘calendar year 2022’ for ‘calVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 endar year 2016’ in subpara2 graph (A)(ii) thereof. 

3 If the amount determined after application 

4 of the preceding sentence is not a multiple 

5 of 5 cents, such amount shall be rounded 

6 to the next lowest multiple of 5 cents. 

7 ‘‘(iii) CALENDAR YEARS AFTER

8 2024.—In the case of any calendar year 

9 after 2024, the minimum amount is the 

10 dollar amount determined under clause (ii) 

11 increased by an amount equal to— 

12 ‘‘(I) such dollar amount, multi13 plied by 

14 ‘‘(II) the cost-of-living adjust15 ment determined under section 1(f)(3) 

16 for such calendar year, determined by 

17 substituting ‘calendar year 2023’ for 

18 ‘calendar year 2016’ in subparagraph 

19 (A)(ii) thereof. 

20 Any amount increased under the preceding 

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

22 shall be rounded to the next lowest mul23 tiple of $5,000.’’. 


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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, 2022. 

4 SEC. 203. BUILDINGS DESIGNATED TO SERVE EXTREMELY 

5 LOW-INCOME HOUSEHOLDS. 

6 (a) RESERVED STATE ALLOCATION.— 

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

8 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 92 

18 percent of the portion of the State housing 

19 credit ceiling amount described in paragraph 

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

21 shall be allocated to buildings other than build22 ings described in subparagraph (B). 

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

24 is described in this subparagraph if 20 percent 

25 or more of the residential units in such building 


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1 are rent-restricted (determined as if the im2 puted income limitation applicable to such units 

3 were 30 percent of area median gross income) 

4 and are designated by the taxpayer for occu5 pancy by households the aggregate household 

6 income of which does not exceed the greater 

7 of— 

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

9 income, or 

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

11 to the Federal poverty line (within the 

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

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

14 treated as described in subparagraph (B) if 

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

16 housing project with respect to which the tax17 payer elects the requirements of subsection 

18 (g)(1)(C).’’. 

19 (2) CONFORMING AMENDMENT.—Section 

20 42(b)(4)(C) of such Code is amended by striking 

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

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

23 42(d) of the Internal Revenue Code of 1986 is amended 

24 by adding at the end the following new subparagraph: 


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1 ‘‘(C) INCREASE IN CREDIT FOR BUILDINGS

2 DESIGNATED TO SERVE EXTREMELY LOW-IN3 COME HOUSEHOLDS.— 

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

5 building— 

6 ‘‘(I) which is described in sub7 section (h)(6)(B), and 

8 ‘‘(II) which is designated by the 

9 housing credit agency as requiring the 

10 increase in credit under this subpara11 graph in order for such building to be 

12 financially feasible as part of a quali13 fied low-income housing project, 

14 subparagraph (B) shall not apply to the 

15 portion of such building which is comprised 

16 of residential units described in subsection 

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

18 to the unit fraction under subsection 

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

20 portion of the building shall be 150 per21 cent of such basis determined without re22 gard to this subparagraph. 

23 ‘‘(ii) ALLOCATION RULES APPLICABLE

24 TO PROJECTS TO WHICH CLAUSE (i) AP25 PLIES.— 


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1 ‘‘(I) STATE HOUSING CREDIT

2 CEILING.—For any calendar year, no 

3 more than 13 percent of the portion 

4 of the State housing credit ceiling de5 scribed in subsection (h)(3)(C)(ii) 

6 shall be allocated to buildings to 

7 which clause (i) applies. 

8 ‘‘(II) APPLICATION TO PROJECTS

9 FINANCED WITH TAX-EXEMPT

10 BONDS.—In the case of any building 

11 which is financed by an obligation de12 scribed in subsection (h)(4), clause (i) 

13 shall not apply unless— 

14 ‘‘(aa) the State in which the 

15 issuing authority issuing such ob16 ligation is located designates 

17 such obligation as an obligation 

18 to which this subparagraph ap19 plies, and 

20 ‘‘(bb) the aggregate face 

21 amount of obligations designated 

22 under item (aa) by such State in 

23 the calendar year during which 

24 such obligation is issued does not 

25 exceed 8 percent of the State 


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1 ceiling of such State under sec2 tion 146(d)(1) for such year.’’. 

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

4 this section shall apply to allocations of housing credit dol5 lar amount after December 31, 2023, and to buildings 

6 that are described in section 42(h)(4)(B) taking into ac7 count only obligations that are part of an issue the issue 

8 date of which is after December 31, 2023. 

9 SEC. 204. INCLUSION OF INDIAN AREAS AS DIFFICULT DE10 VELOPMENT AREAS FOR PURPOSES OF CER11 TAIN BUILDINGS. 

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

13 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

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

15 and any Indian area’’. 

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

17 42(d)(5)(B) of the Internal Revenue Code of 1986 is 

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

19 and by inserting after subclause (I) the following new sub20 clauses: 

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

24 defined in section 4(11) of the Native 

25 American Housing Assistance and 


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1 Self Determination Act of 1996 (25 

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

3 ‘‘(III) SPECIAL RULE FOR

4 BUILDINGS IN INDIAN AREAS.—In the 

5 case of an area which is a difficult de6 velopment area solely because it is an 

7 Indian area, a building shall not be 

8 treated as located in such area unless 

9 such building is assisted or financed 

10 under the Native American Housing 

11 Assistance and Self Determination 

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

13 or the project sponsor is an Indian 

14 tribe (as defined in section 

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

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

18 wholly owned or controlled by such an 

19 Indian tribe or tribally designated 

20 housing entity.’’. 

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

22 this section shall apply to buildings placed in service after 

23 December 31, 2023. 


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1 SEC. 205. INCLUSION OF RURAL AREAS AS DIFFICULT DE2 VELOPMENT AREAS. 

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

4 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986, as 

5 amended by section 204, is further amended by inserting 

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

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

8 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

9 amended by section 204, is further amended by redesig10 nating subclause (IV) as subclause (V) and by inserting 

11 after subclause (III) the following new subclause: 

12 ‘‘(IV) RURAL AREA.—For pur13 poses of subclause (I), the term ‘rural 

14 area’ means any non-metropolitan 

15 area, or any rural area as defined by 

16 section 520 of the Housing Act of 

17 1949, which is identified by the quali18 fied allocation plan under subsection 

19 (m)(1)(B).’’. 

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

21 this section shall apply to buildings placed in service after 

22 December 31, 2023. 


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

2 PROJECTS DESIGNATED BY HOUSING CREDIT 

3 AGENCY. 

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

5 of the Internal Revenue Code of 1986 is amended by strik6 ing the second sentence. 

7 (b) TECHNICAL AMENDMENTS.—Clause (v) of sec8 tion 42(d)(5)(B) of the Internal Revenue Code of 1986, 

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

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

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

12 and inserting ‘‘housing credit agency’’. 

13 (c) EFFECTIVE DATE.— 

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

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

16 (A) any portion of such building is fi17 nanced by an obligation described in paragraph 

18 (2), or 

19 (B) the land on which the building is lo20 cated is financed by an obligation described in 

21 paragraph (2). 

22 (2) OBLIGATION DESCRIBED.—An obligation is 

23 described in this paragraph if such obligation— 

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

25 the Internal Revenue Code of 1986, and 

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


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1 SEC. 207. REPEAL OF QUALIFIED CONTRACT OPTION. 

2 (a) TERMINATION OF OPTION FOR CERTAIN BUILD3 INGS.— 

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

5 42(h)(7)(E)(i) of the Internal Revenue Code of 

6 1986, as redesignated by section 203, is amended by 

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

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

9 (2) BUILDINGS DESCRIBED.—Subparagraph 

10 (E) of section 42(h)(7) of such Code, as so redesig11 nated, is amended by adding at the end the following 

12 new clause: 

13 ‘‘(iii) BUILDINGS DESCRIBED.—A 

14 building described in this clause is a build15 ing— 

16 ‘‘(I) which received its allocation 

17 of housing credit dollar amount before 

18 January 1, 2024, or 

19 ‘‘(II) in the case of a building 

20 any portion of which is financed as 

21 described in paragraph (4), and which 

22 received before January 1, 2024, 

23 under the rules of paragraphs (1) and 

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

25 from the issuer of the tax-exempt 

26 bonds or the housing credit agency 


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1 that the building would be eligible 

2 under the qualified allocation plan to 

3 receive an allocation of housing credit 

4 dollar amount or that the credits to be 

5 earned are necessary for financial fea6 sibility of the project and its viability 

7 as a qualified low-income housing 

8 project throughout the credit period.’’. 

9 (b) RULES RELATING TO EXISTING PROJECTS.— 

10 Subparagraph (F) of section 42(h)(7) of the Internal Rev11 enue Code of 1986, as redesignated by section 203, is 

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

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

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

15 value (determined by the housing credit agency by taking 

16 into account the rent restrictions required for the low-in17 come portion of the building to continue to meet the stand18 ards of paragraphs (1) and (2) of subsection (g)). The 

19 Secretary shall prescribe such regulations as may be nec20 essary or appropriate to carry out this paragraph.’’. 

21 (c) CONFORMING AMENDMENTS.— 

22 (1) Paragraph (7) of section 42(h) of the Inter23 nal Revenue Code of 1986, as redesignated by sec24 tion 203, is amended by striking subparagraph (G) 

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


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1 and (K) as subparagraphs (G), (H), (I), and (J), re2 spectively. 

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

4 such Code, as so redesignated and as amended by 

5 subsection (a), is further amended by striking ‘‘sub6 paragraph (I)’’ and inserting ‘‘subparagraph (H)’’. 

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

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

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

10 amended by striking ‘‘agreement’’ and inserting ‘‘commit11 ment’’. 

12 (e) EFFECTIVE DATES.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section 

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

16 Act. 

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

18 by subsection (b) shall apply to buildings with re19 spect to which a written request described in section 

20 42(h)(7)(H) of the Internal Revenue Code of 1986, 

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

22 submitted after the date of the enactment of this 

23 Act. 


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1 SEC. 208. MODIFICATION AND CLARIFICATION OF RIGHTS 

2 RELATING TO BUILDING PURCHASE. 

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

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

5 42(i)(7) of the Internal Revenue Code of 1986 is 

6 amended by striking ‘‘a right of 1st refusal’’ and in7 serting ‘‘an option’’. 

8 (2) CONFORMING AMENDMENT.—The heading 

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

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

11 inserting ‘‘OPTION’’. 

12 (b) CLARIFICATION WITH RESPECT TO RIGHT OF

13 FIRST REFUSAL AND PURCHASE OPTIONS.— 

14 (1) PURCHASE OF PARTNERSHIP INTEREST.— 

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

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

17 1986, as amended by subsection (a), is amend18 ed by striking ‘‘the property’’ and inserting 

19 ‘‘the property or all of the partnership interests 

20 (other than interests of the person exercising 

21 such option or a related party thereto (within 

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

23 relating to the property’’. 

24 (B) APPLICATION TO S CORPORATIONS

25 AND OTHER PASS-THROUGH ENTITIES.—Sub26 paragraph (A) of section 42(i)(7) of such Code 


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1 is amended by adding at the end the following: 

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

3 of this paragraph shall apply to S corporations 

4 and other pass-through entities in the same 

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

6 (C) CONFORMING AMENDMENT.—Subpara7 graph (B) of section 42(i)(7) of such Code is 

8 amended by adding at the end the following: 

9 ‘‘In the case of a purchase of all of the partner10 ship interests, the minimum purchase price 

11 under this subparagraph shall be an amount 

12 not less than the sum of the interests’ shares 

13 of the amount which would be determined with 

14 respect to the property under this subparagraph 

15 without regard to this sentence.’’. 

16 (2) PROPERTY INCLUDES ASSETS RELATING TO

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

18 such Code is amended by adding at the end the fol19 lowing new subparagraph: 

20 ‘‘(C) PROPERTY.—For purposes of sub21 paragraph (A), the term ‘property’ may include 

22 all or any of the assets held for the develop23 ment, operation, or maintenance of a build24 ing.’’. 


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1 (3) EXERCISE OF RIGHT OF FIRST REFUSAL

2 AND PURCHASE OPTIONS.—Subparagraph (A) of 

3 section 42(i)(7) of such Code, as amended by sub4 section (a) and paragraph (1)(A), is amended by 

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

6 determining whether an option, including a right of 

7 first refusal, to purchase property or all of the part8 nership interests holding (directly or indirectly) such 

9 property is described in the preceding sentence— 

10 ‘‘(i) such option or right of first re11 fusal shall be exercisable with or without 

12 the approval of any owner of the project 

13 (including any partner, member, or affili14 ated organization of such an owner), and 

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

16 exercisable in response to any offer to pur17 chase the property or all of the partnership 

18 interests, including an offer by a related 

19 party.’’. 

20 (c) OTHER CONFORMING AMENDMENT.—Subpara21 graph (B) of section 42(i)(7) of the Internal Revenue Code 

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

23 striking ‘‘the sum of’’ and all that follows through ‘‘appli24 cation of clause (ii).’’ and inserting the following: ‘‘the 

25 principal amount of outstanding indebtedness secured by 


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1 the building (other than indebtedness incurred within the 

2 5-year period ending on the date of the sale to the ten3 ants).’’. 

4 (d) EFFECTIVE DATES.— 

5 (1) MODIFICATION OF RIGHT OF FIRST RE6 FUSAL.—The amendments made by subsections (a) 

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

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

9 (2) CLARIFICATION.—The amendments made 

10 by subsection (b) shall apply to agreements among 

11 the owners of the project (including partners, mem12 bers, and their affiliated organizations) and persons 

13 described in section 42(i)(7)(A) of the Internal Rev14 enue Code of 1986 entered into before, on, or after 

15 the date of the enactment of this Act. 

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

17 amendments made by this section is intended to su18 persede express language in any agreement with re19 spect to the terms of a right of first refusal or op20 tion permitted by section 42(i)(7) of the Internal 

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

22 enactment of this Act. 


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1 SEC. 209. PROHIBITION OF LOCAL APPROVAL AND CON2 TRIBUTION REQUIREMENTS. 

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

4 of the Internal Revenue Code of 1986 is amended— 

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

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

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

8 (2) by adding at the end the following new sub9 paragraph: 

10 ‘‘(E) LOCAL APPROVAL OR CONTRIBUTION

11 NOT TAKEN INTO ACCOUNT.—The selection cri12 teria under a qualified allocation plan shall not 

13 include consideration of— 

14 ‘‘(i) any support or opposition with re15 spect to the project from local or elected 

16 officials, or 

17 ‘‘(ii) any local government contribu18 tion to the project, except to the extent 

19 such contribution is taken into account as 

20 part of a broader consideration of the 

21 project’s ability to leverage outside funding 

22 sources, and is not prioritized over any 

23 other source of outside funding.’’. 

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

25 this section shall apply to allocations of housing credit dol26 lar amounts made after December 31, 2023. 


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

2 SUPPORTIVE SERVICES. 

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

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

5 203, is further amended by adding at the end the following 

6 new subparagraphs: 

7 ‘‘(D) INCREASE IN CREDIT FOR PROVIDING

8 SUPPORTIVE SERVICES.— 

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

10 building which includes common areas, or 

11 property used therein, dedicated to the 

12 provision of on-site qualified supportive 

13 services, except as provided in subpara14 graphs (E) and (F), the eligible basis of 

15 the portion of the building which is com16 prised of such areas or property (after the 

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

18 shall be increased by an amount equal to 

19 50 percent of such basis determined with20 out regard to this subparagraph and sub21 paragraphs (B) and (C). 

22 ‘‘(ii) QUALIFIED SUPPORTIVE SERV23 ICES.—For purposes of clause (i), the term 

24 ‘qualified supportive services’ means serv25 ices— 


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1 ‘‘(I) provided by the owner of a 

2 building (directly or through contracts 

3 with third-party service providers) pri4 marily to tenants of the building, 

5 ‘‘(II) which are intended to pro6 mote economic self-sufficiency and 

7 physical and mental health and well8 being in pursuit of retaining perma9 nent housing, including childcare or 

10 eldercare services, health services, co11 ordination of tenant benefits, job 

12 training, financial counseling, resident 

13 engagement services, or such other 

14 similar services as may be defined by 

15 the allocating agency in the qualified 

16 allocation plan, 

17 ‘‘(III) which are provided to ten18 ants and other beneficiaries as may be 

19 specified by the housing credit agency, 

20 including specifications as to which 

21 services may be provided to non-ten22 ants, 

23 ‘‘(IV) which are provided at no 

24 cost to beneficiaries other than any 

25 fee, copay, or coinsurance customarily 


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1 charged by service providers for simi2 lar services, and 

3 ‘‘(V) usage of or participation in 

4 which is not a condition of tenancy in 

5 the building. 

6 Such term includes reasonable and nec7 essary measures for the provision of such 

8 services, including measures to engage ten9 ants and other beneficiaries in and coordi10 nate such services, and measures required 

11 to obtain the certification described in sub12 paragraph (E)(ii)(III). 

13 ‘‘(E) EXTENDED SUPPORTIVE SERVICES

14 COMMITMENT.— 

15 ‘‘(i) IN GENERAL.—Subparagraph 

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

17 taxable year unless an extended supportive 

18 services commitment is in effect for such 

19 taxable year. 

20 ‘‘(ii) EXTENDED SUPPORTIVE SERV21 ICES COMMITMENT.—The term ‘extended 

22 supportive services commitment’ means 

23 any agreement between the owner of a 

24 building and the housing credit agency 

25 which— 


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1 ‘‘(I) provides estimates of the 

2 amounts to be spent, updated at least 

3 once every 5 years, on the provision of 

4 qualified supportive services to ten5 ants of such building and other bene6 ficiaries for each taxable year remain7 ing in the credit period, 

8 ‘‘(II) requires the designation of 

9 one or more individuals to engage ten10 ants regarding, and coordinate deliv11 ery of, qualified supportive services, 

12 ‘‘(III) requires the maintenance 

13 of an appropriate certification, as de14 termined by the Secretary in consulta15 tion with the housing credit agencies, 

16 for qualified supportive services, sub17 ject to recertification at least once 

18 every 5 years, 

19 ‘‘(IV) requires appropriate an20 nual reporting to the housing credit 

21 agency on expenditures and outcomes, 

22 as determined by such agency, and 

23 ‘‘(V) is binding on all successors 

24 in ownership of such building. 


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1 ‘‘(iii) EXCEPTIONS IF FORECLOSURE

2 OR IF NO BUYER WILLING TO MAINTAIN

3 SERVICES.—The requirement of clause 

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

5 the date the building is acquired by fore6 closure (or instrument in lieu of fore7 closure) unless the housing credit agency 

8 determines that such acquisition is part of 

9 an arrangement with the taxpayer a pur10 pose of which is to terminate such require11 ment. 

12 ‘‘(iv) EFFECT OF NONCOMPLIANCE.— 

13 If, during a taxable year, there is a deter14 mination by the housing credit agency that 

15 an extended supportive services commit16 ment was not in effect as of the beginning 

17 of such year or that there is evidence of 

18 other noncompliance as determined by the 

19 housing credit agency (including failure to 

20 provide qualified supportive services)— 

21 ‘‘(I) such determination shall not 

22 apply to any period before such year 

23 and subparagraph (D)(i) shall apply 

24 to such taxable year without regard to 

25 such determination if the failure is 


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1 corrected within 1 year from the date 

2 of the determination, and 

3 ‘‘(II) in the case of any year to 

4 which such determination does apply, 

5 if the failure is not corrected within 1 

6 year from the date of the determina7 tion, the credit recapture amount 

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

9 which such 1 year period expires shall 

10 be increased by the amount of any in11 crease in the credit under this section 

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

13 the year to which the determination 

14 applies. 

15 ‘‘(v) PROJECTS WHICH CONSIST OF

16 MORE THAN 1 BUILDING.—Rules similar to 

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

18 apply. 

19 ‘‘(F) RESPONSIBILITIES OF HOUSING

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

21 not apply to a building for any taxable year un22 less— 

23 ‘‘(i) the housing credit agency sets 

24 forth criteria— 


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1 ‘‘(I) to determine appropriate, 

2 evidence-based supportive services, 

3 ‘‘(II) for the selection of appro4 priate and competent service pro5 viders, and 

6 ‘‘(III) which common areas or 

7 property described in subparagraph 

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

9 for the increase in credit under sub10 paragraph (D), 

11 ‘‘(ii) the housing credit agency pro12 vides a procedure that the agency (or an 

13 agent or other private contractor of such 

14 agency) shall follow in monitoring for non15 compliance with the provisions of this sub16 paragraph and subparagraphs (D) and (E) 

17 and in reporting such noncompliance to the 

18 Secretary, and 

19 ‘‘(iii) appropriate books and records 

20 for expenditures with respect to the quali21 fied supportive services are maintained on 

22 an annual basis, and are available for in23 spection upon request by the housing cred24 it agency.’’. 


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

2 this section shall apply to buildings which receive alloca3 tions of housing credit dollar amount or, in the case of 

4 projects financed by tax-exempt obligations as described 

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

6 which are first taken into account under section 146 of 

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

8 SEC. 211. STUDY OF TAX INCENTIVES FOR THE CONVER9 SION OF COMMERCIAL PROPERTY TO AF10 FORDABLE HOUSING. 

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

12 Act, the Secretary of the Treasury, the Secretary of Hous13 ing and Urban Development, the Deputy Under Secretary 

14 for Rural Development of the Department of Agriculture, 

15 and the Director of the Office of Management and Budget 

16 shall collaborate to produce a cost-benefit analysis of pro17 viding tax incentives, including the non-recognition of cap18 ital gains, to the owners of vacant or under-utilized com19 mercial real estate in exchange for selling these properties 

20 to State, local, or tribal housing finance agencies for con21 version to affordable rental housing for low-income resi22 dents, including shelters for the homeless. 

23 SEC. 212. RENTERS CREDIT. 

24 (a) IN GENERAL.—Subpart C of part IV of sub25 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 36B the fol2 lowing new section: 

3 ‘‘SEC. 36C. RENTERS CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.— 

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

6 credit against the tax imposed by this subtitle for 

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

8 amounts determined under paragraph (2) for all 

9 qualified buildings with a credit period which in10 cludes months occurring during the taxable year. 

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

12 amount determined under this paragraph with re13 spect to any qualified building for any taxable year 

14 shall be an amount equal to the lesser of— 

15 ‘‘(A) the aggregate qualified rental reduc16 tion amounts for all eligible units within such 

17 building for months occurring during the tax18 able year which are within the credit period for 

19 such building, or 

20 ‘‘(B) the rental reduction credit amount al21 located to such building for such months. 

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

23 this section— 

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

25 building’ means any building which is residenVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 tial rental property (as defined in section 

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

3 which— 

4 ‘‘(i) a rental reduction credit amount 

5 has been allocated by a rental reduction 

6 credit agency of a State, and 

7 ‘‘(ii) a qualified rental reduction 

8 agreement is in effect. 

9 ‘‘(B) BUILDING NOT DISQUALIFIED BY

10 OTHER ASSISTANCE.—A building shall not fail 

11 to be treated as a qualified building merely be12 cause— 

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

14 42 with respect to such building or there 

15 was any other Federal assistance in the 

16 construction or rehabilitation of such 

17 building, 

18 ‘‘(ii) the rehabilitation credit deter19 mined under section 47 was allowed under 

20 section 38 with respect to such building, or 

21 ‘‘(iii) Federal rental assistance was 

22 provided for such building during any pe23 riod preceding the credit period. 

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

25 For purposes of this section— 


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

2 reduction amount’ means, with respect to any eligi3 ble unit for any month, an amount equal to the ap4 plicable percentage (as determined under subsection 

5 (e)(1)) of the excess of— 

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

7 ‘‘(B) the family rental payment required 

8 for such unit. 

9 ‘‘(2) APPLICABLE RENT.— 

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

11 rent’ means, with respect to any eligible unit 

12 for any month, the lesser of— 

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

14 be charged for a substantially similar unit 

15 with the same number of bedrooms in the 

16 same building which is not an eligible unit, 

17 or 

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

19 rent standard for such unit. 

20 ‘‘(B) MARKET RENT STANDARD.— 

21 ‘‘(i) IN GENERAL.—The market rent 

22 standard with respect to any eligible unit 

23 is— 

24 ‘‘(I) the small area fair market 

25 rent determined by the Secretary of 


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1 Housing and Urban Development for 

2 units with the same number of bed3 rooms in the same zip code tabulation 

4 area, or 

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

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

7 market rent determined by such Sec8 retary for units with the same number 

9 of bedrooms in the same county. 

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

11 its rental reduction allocation plan provide 

12 that the market rent standard for all (or 

13 any part) of a zip code tabulation area or 

14 county within the State shall be equal to a 

15 percentage (not less than 75 nor more 

16 than 125) of the amount determined under 

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

18 for such area or county. 

19 ‘‘(iii) MINIMUM AMOUNT.—Notwith20 standing clause (i), the market rent stand21 ard with respect to any eligible unit for 

22 any year in the credit period after the first 

23 year in the credit period for such unit shall 

24 not be less than the market rent standard 

25 determined for such first year. 


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1 ‘‘(3) FAMILY RENTAL PAYMENT REQUIRE2 MENTS.— 

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

4 reduction agreement with respect to any quali5 fied building shall require that the family rental 

6 payment for an eligible unit within such build7 ing for any month shall be equal to the lesser 

8 of— 

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

10 income of the residents of the unit (as de11 termined under subsection (e)(5)), or 

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

13 ‘‘(B) UTILITY COSTS.—Any utility allow14 ance (determined by the Secretary in the same 

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

16 by residents of an eligible unit shall be taken 

17 into account as rent in determining the family 

18 rental payment for such unit for purposes of 

19 this paragraph. 

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

21 purposes of this section— 

22 ‘‘(1) DETERMINATION OF AMOUNT.— 

23 ‘‘(A) IN GENERAL.—The term ‘rental re24 duction credit amount’ means, with respect to 

25 any qualified building, the dollar amount which 


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1 is allocated to such building (and to eligible 

2 units within such building) under this sub3 section. Such dollar amount shall be allocated 

4 to months in the credit period with respect to 

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

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

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

8 the case of a project which includes (or will in9 clude) more than 1 building, the rental reduc10 tion credit amount shall be the dollar amount 

11 which is allocated to such project for all build12 ings included in such project. Subject to the 

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

14 amount shall be allocated among such buildings 

15 in the manner specified by the taxpayer unless 

16 the qualified rental reduction agreement with 

17 respect to such project provides for such alloca18 tion. 

19 ‘‘(2) STATE ALLOCATION.— 

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

21 subparagraph (C), each rental reduction credit 

22 agency of a State shall each calendar year allo23 cate its portion of the State rental reduction 

24 credit ceiling to qualified buildings (and to eligi25 ble units within each such building) in accordVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 ance with the State rental reduction allocation 

2 plan. 

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

4 The rental reduction credit amount allocated to 

5 any qualified building shall not exceed the ag6 gregate qualified rental reduction amounts 

7 which such agency estimates will occur over the 

8 credit period for eligible units within such 

9 building, based on reasonable estimates of 

10 rents, family incomes, and vacancies in accord11 ance with procedures established by the State 

12 as part of its State rental reduction allocation 

13 plan. 

14 ‘‘(C) SPECIFIC ALLOCATIONS.— 

15 ‘‘(i) NONPROFIT ORGANIZATIONS.—At 

16 least 25 percent of the State rental reduc17 tion credit ceiling for any State for any 

18 calendar year shall be allocated to qualified 

19 buildings in which a qualified nonprofit or20 ganization (as defined in section 

21 42(h)(5)(C)) owns (directly or through 1 

22 or more partnerships) an interest and ma23 terially participates (within the meaning of 

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

25 building throughout the credit period. A 


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1 State may waive or lower the requirement 

2 under this clause for any calendar year if 

3 it determines that meeting such require4 ment is not feasible. 

5 ‘‘(ii) RURAL AREAS.— 

6 ‘‘(I) IN GENERAL.—The State 

7 rental reduction credit ceiling for any 

8 State for any calendar year shall be 

9 allocated to buildings in rural areas 

10 (as defined in section 520 of the 

11 Housing Act of 1949) in an amount 

12 which, as determined by the Secretary 

13 of Housing and Urban Development, 

14 bears the same ratio to such ceiling as 

15 the number of extremely low-income 

16 households with severe rent burdens 

17 in such rural areas bears to the total 

18 number of such households in the 

19 State. 

20 ‘‘(II) ALTERNATIVE 5-YEAR

21 TESTING PERIOD.—In the case of the 

22 5-calendar year period beginning in 

23 2023, a State shall not be treated as 

24 failing to meet the requirements of 

25 subclause (I) for any calendar year in 


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1 such period if, as determined by the 

2 Secretary, the average annual amount 

3 allocated to such rural areas during 

4 such period meets such requirements. 

5 ‘‘(3) APPLICATION OF ALLOCATED CREDIT

6 AMOUNT.— 

7 ‘‘(A) AMOUNT AVAILABLE TO TAXPAYER

8 FOR ALL MONTHS IN CREDIT PERIOD.—Any 

9 rental reduction credit amount allocated to any 

10 qualified building out of the State rental reduc11 tion credit ceiling for any calendar year shall 

12 apply to such building for all months in the 

13 credit period ending during or after such cal14 endar year. 

15 ‘‘(B) CEILING FOR ALLOCATION YEAR RE16 DUCED BY ENTIRE CREDIT AMOUNT.—Any 

17 rental reduction credit amount allocated to any 

18 qualified building out of an allocating agency’s 

19 State rental reduction credit ceiling for any cal20 endar year shall reduce such ceiling for such 

21 calendar year by the entire amount so allocated 

22 for all months in the credit period (as deter23 mined on the basis of the estimates under para24 graph (2)(B)) and no reduction shall be made 

25 in such agency’s State rental reduction credit 


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1 ceiling for any subsequent calendar year by rea2 son of such allocation. 

3 ‘‘(4) STATE RENTAL REDUCTION CREDIT CEIL4 ING.— 

5 ‘‘(A) IN GENERAL.—The State rental re6 duction credit ceiling applicable to any State for 

7 any calendar year shall be an amount equal to 

8 the sum of— 

9 ‘‘(i) the greater of— 

10 ‘‘(I) the per capita dollar amount 

11 multiplied by the State population, or 

12 ‘‘(II) the minimum ceiling 

13 amount, plus 

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

15 reduction credit ceiling returned in the cal16 endar year. 

17 ‘‘(B) RETURN OF STATE CEILING

18 AMOUNTS.—For purposes of subparagraph 

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

20 the amount of the State rental reduction credit 

21 ceiling returned in a calendar year equals the 

22 amount of the rental reduction credit amount 

23 allocated to any building which, after the close 

24 of the calendar year for which the allocation is 

25 made— 


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

2 the rental reduction credit agency and the 

3 taxpayer because the estimates made under 

4 paragraph (2)(B) were substantially incor5 rect, or 

6 ‘‘(ii) is canceled by the rental reduc7 tion credit agency because the taxpayer 

8 violates the qualified rental reduction 

9 agreement and, under the terms of the 

10 agreement, the rental reduction credit 

11 agency is authorized to cancel all (or any 

12 portion) of the allocation by reason of the 

13 violation. 

14 ‘‘(C) PER CAPITA DOLLAR AMOUNT; MIN15 IMUM CEILING AMOUNT.—For purposes of this 

16 paragraph— 

17 ‘‘(i) PER CAPITA DOLLAR AMOUNT.— 

18 The per capita dollar amount is— 

19 ‘‘(I) for calendar year 2023, 

20 $12.30, 

21 ‘‘(II) for calendar year 2024, 

22 $24.50, and 

23 ‘‘(III) for calendar years 2025 

24 and thereafter, $36.75. 


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1 ‘‘(ii) MINIMUM CEILING AMOUNT.— 

2 The minimum ceiling amount is— 

3 ‘‘(I) for calendar year 2023, 

4 $14,000,000, 

5 ‘‘(II) for calendar year 2024, 

6 $28,000,000, and 

7 ‘‘(III) for calendar years 2025 

8 and thereafter, $42,000,000. 

9 ‘‘(iii) COST-OF-LIVING ADJUST10 MENT.—In the case of a calendar year be11 ginning after 2025, the $36.75 and 

12 $42,000,000 amounts in clauses (i)(III) 

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

14 amount equal to— 

15 ‘‘(I) such dollar amount, multi16 plied by 

17 ‘‘(II) the cost-of-living adjust18 ment determined under section 1(f)(3) 

19 for such calendar year by substituting 

20 ‘calendar year 2024’ for ‘calendar 

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

22 thereof. 

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

24 any increase under this clause which is not 

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


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

2 the case of the $36.75 amount, any in3 crease under this clause which is not a 

4 multiple of 5 cents shall be rounded to the 

5 next lowest multiple of 5 cents. 

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

7 paragraph, population shall be determined in 

8 accordance with section 146(j). 

9 ‘‘(E) UNUSED RENTAL REDUCTION CREDIT

10 ALLOCATED AMONG CERTAIN STATES.— 

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

12 reduction credit of a State for any cal13 endar year shall be assigned to the Sec14 retary for allocation among qualified 

15 States for the succeeding calendar year. 

16 ‘‘(ii) UNUSED RENTAL REDUCTION

17 CREDIT.—For purposes of this subpara18 graph, the unused rental reduction credit 

19 of a State for any calendar year is the ex20 cess (if any) of— 

21 ‘‘(I) the State rental reduction 

22 credit ceiling for the year preceding 

23 such year, over 


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1 ‘‘(II) the aggregate rental reduc2 tion credit amounts allocated for such 

3 year. 

4 ‘‘(iii) FORMULA FOR ALLOCATION OF

5 UNUSED CREDIT AMONG QUALIFIED

6 STATES.—The amount allocated under this 

7 subparagraph to a qualified State for any 

8 calendar year shall be the amount deter9 mined by the Secretary to bear the same 

10 ratio to the aggregate unused rental reduc11 tion credits of all States for the preceding 

12 calendar year as such State’s population 

13 for the calendar year bears to the popu14 lation of all qualified States for the cal15 endar year. For purposes of the preceding 

16 sentence, population shall be determined in 

17 accordance with section 146(j). 

18 ‘‘(iv) QUALIFIED STATE.—For pur19 poses of this subparagraph, the term 

20 ‘qualified State’ means, with respect to a 

21 calendar year, any State— 

22 ‘‘(I) which allocated its entire 

23 State rental reduction credit ceiling 

24 for the preceding calendar year, and 


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1 ‘‘(II) for which a request is made 

2 (at such time and in such manner as 

3 the Secretary may prescribe) to re4 ceive an allocation under clause (iii). 

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

6 this section— 

7 ‘‘(A) RENTAL REDUCTION CREDIT AGEN8 CY.—The term ‘rental reduction credit agency’ 

9 means any agency authorized by a State to 

10 carry out this section. Such authorization shall 

11 include the jurisdictions within the State where 

12 the agency may allocate rental reduction credit 

13 amounts. 

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

15 The term ‘State’ includes a possession of the 

16 United States. 

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

18 same meaning as when used in the United 

19 States Housing Act of 1937. 

20 ‘‘(d) MODIFICATIONS TO CORRECT INACCURATE

21 AMOUNTS DUE TO INCORRECT ESTIMATES.— 

22 ‘‘(1) ESTABLISHMENT OF RESERVES.— 

23 ‘‘(A) IN GENERAL.—Each rental reduction 

24 credit agency of a State shall establish a reserve 

25 for the transfer and reallocation of amounts 


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1 pursuant to this paragraph, and notwith2 standing any other provision of this section, the 

3 rental reduction credit amount allocated to any 

4 building by such agency shall be zero unless 

5 such agency has in effect such a reserve at the 

6 time of the allocation of such credit amount. 

7 ‘‘(B) TRANSFERS TO RESERVE.— 

8 ‘‘(i) IN GENERAL.—If, for any taxable 

9 year, a taxpayer would (but for this sub10 paragraph) not be able to use the entire 

11 rental reduction credit amount allocated to 

12 a qualified building by a rental reduction 

13 credit agency of a State for the taxable 

14 year because of a rental reduction short15 fall, then the taxpayer shall for the taxable 

16 year transfer to the reserve established by 

17 such agency under subparagraph (A) an 

18 amount equal to such rental reduction 

19 shortfall. 

20 ‘‘(ii) RENTAL REDUCTION SHORT21 FALL.—For purposes of this subpara22 graph, the rental reduction shortfall for 

23 any qualified building for any taxable year 

24 is the amount by which the aggregate 

25 amount of the excesses determined under 


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1 subsection (b)(1) for all eligible units with2 in such building are less than such aggre3 gate amount estimated under subsection 

4 (c)(2)(B) for the taxable year. 

5 ‘‘(iii) TREATMENT OF TRANSFERRED

6 AMOUNT.—For purposes of subsection 

7 (a)(2)(A), the aggregate qualified rental 

8 reduction amounts for all eligible units 

9 within a qualified building with respect to 

10 which clause (i) applies for any taxable 

11 year shall be increased by an amount equal 

12 to the applicable percentage (determined 

13 under subsection (e)(1) for the building) of 

14 the amount of the transfer to the reserve 

15 under clause (i) with respect to such build16 ing for such taxable year. 

17 ‘‘(C) REALLOCATION OF AMOUNTS TRANS18 FERRED.— 

19 ‘‘(i) IN GENERAL.—If, for any taxable 

20 year— 

21 ‘‘(I) the aggregate qualified rent22 al reduction amounts for all eligible 

23 units within a qualified building for 

24 the taxable year, exceed 


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1 ‘‘(II) the rental reduction credit 

2 amount allocated to such building by 

3 a rental reduction credit agency of a 

4 State for the taxable year (determined 

5 after any increase under paragraph 

6 (2)), 

7 the rental reduction credit agency shall, 

8 upon application of the taxpayer, pay to 

9 the taxpayer from the reserve established 

10 by such agency under subparagraph (A) 

11 the amount which, when multiplied by the 

12 applicable percentage (determined under 

13 subsection (e)(1) for the building), equals 

14 such excess. If the amount in the reserve 

15 is less than the amounts requested by all 

16 taxpayers for taxable years ending within 

17 the same calendar year, the agency shall 

18 ratably reduce the amount of each pay19 ment otherwise required to be made. 

20 ‘‘(ii) EXCESS RESERVE AMOUNTS.—If 

21 a rental reduction credit agency of a State 

22 determines that the balance in its reserve 

23 is in excess of the amounts reasonably 

24 needed over the following 5 calendar years 

25 to make payments under clause (i), the 


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1 agency may withdraw such excess but only 

2 to— 

3 ‘‘(I) reduce the rental payments 

4 of eligible tenants in a qualified build5 ing in units other than eligible units, 

6 or of eligible tenants in units in a 

7 building other than a qualified build8 ing, to amounts no higher than the 

9 sum of rental payments required for 

10 eligible tenants in qualified buildings 

11 under subsection (b)(3) and any rent12 al charges to such tenants in excess of 

13 the market rent standard; or 

14 ‘‘(II) address maintenance and 

15 repair needs in qualified buildings 

16 that cannot reasonably be met using 

17 other resources available to the own18 ers of such buildings. 

19 ‘‘(D) ADMINISTRATION.—Each rental re20 duction credit agency of a State shall establish 

21 procedures for the timing and manner of trans22 fers and payments made under this paragraph. 

23 ‘‘(E) SPECIAL RULE FOR PROJECTS.—In 

24 the case of a rental reduction credit allocated to 

25 a project consisting of more than 1 qualified 


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1 building, a taxpayer may elect to have this 

2 paragraph apply as if all such buildings were 1 

3 qualified building if the applicable percentage 

4 for each such building is the same. 

5 ‘‘(F) ALTERNATIVE METHODS OF TRANS6 FER AND REALLOCATION.—Upon request to, 

7 and approval by, the Secretary, a State may es8 tablish an alternative method for the transfer 

9 and reallocation of amounts otherwise required 

10 to be transferred to, and allocated from, a re11 serve under this paragraph. Any State adopting 

12 an alternative method under this subparagraph 

13 shall, at such time and in such manner as the 

14 Secretary prescribes, provide to the Secretary 

15 and the Secretary of Housing and Urban Devel16 opment detailed reports on the operation of 

17 such method, including providing such informa18 tion as such Secretaries may require. 

19 ‘‘(2) ALLOCATION OF RETURNED STATE CEIL20 ING AMOUNTS.—In the case of any rental reduction 

21 credit amount allocated to a qualified building which 

22 is canceled as provided in subsection (c)(4)(B)(i), 

23 the rental reduction credit agency may, in lieu of 

24 treating such allocation as a returned credit amount 

25 under subsection (c)(4)(A)(ii), elect to allocate, upon 


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1 the request of the taxpayer, such amount to any 

2 other qualified building for which the credit amount 

3 allocated in any preceding calendar year was too 

4 small because the estimates made under subsection 

5 (c)(2)(B) were substantially incorrect. 

6 ‘‘(3) RENTING TO NONELIGIBLE TENANTS.—If, 

7 after the application of paragraphs (1)(C) (or any 

8 similar reallocation under paragraph (1)(F)) and 

9 (2), a rental reduction credit agency of a State de10 termines that, because of the incorrect estimates 

11 under subsection (c)(2)(B), the aggregate qualified 

12 rental reduction amounts for all eligible units within 

13 a qualified building will (on an ongoing basis) exceed 

14 the rental reduction credit amount allocated to such 

15 building, a taxpayer may elect, subject to subsection 

16 (g)(2) and only to the extent necessary to eliminate 

17 such excess, rent vacant eligible units without regard 

18 to the requirements that such units be rented only 

19 to eligible tenants and at the rental rate determined 

20 under subsection (b)(3). 

21 ‘‘(e) TERMS RELATING TO RENTAL REDUCTION

22 CREDIT AND REQUIREMENTS.—For purposes of this sec23 tion— 

24 ‘‘(1) APPLICABLE PERCENTAGE.— 


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

2 percentage’ means, with respect to any qualified 

3 building, the percentage (not greater than 110 

4 percent) set by the rental reduction credit agen5 cy at the time it allocates the rental reduction 

6 dollar amount to such building. 

7 ‘‘(B) HIGHER PERCENTAGE FOR HIGH-OP8 PORTUNITY AREAS.—The rental reduction cred9 it agency may set a percentage under subpara10 graph (A) up to 120 percent for any qualified 

11 building which— 

12 ‘‘(i) targets its eligible units for rental 

13 to families with children, and 

14 ‘‘(ii) is located in a neighborhood 

15 which has a poverty rate of no more than 

16 10 percent. 

17 ‘‘(2) CREDIT PERIOD.— 

18 ‘‘(A) IN GENERAL.—The term ‘credit pe19 riod’ means, with respect to any qualified build20 ing, the 15-year period beginning with the first 

21 month for which the qualified rental reduction 

22 agreement is in effect with respect to such 

23 building. 

24 ‘‘(B) STATE OPTION TO REDUCE PE25 RIOD.—A rental reduction credit agency may 


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1 provide a credit period for any qualified build2 ing which is less than 15 years. 

3 ‘‘(3) ELIGIBLE UNIT.— 

4 ‘‘(A) IN GENERAL.—The term ‘eligible 

5 unit’ means, with respect to any qualified build6 ing, a unit— 

7 ‘‘(i) which is occupied by an eligible 

8 tenant, 

9 ‘‘(ii) the rent of which for any month 

10 equals 30 percent of the monthly family in11 come of the residents of such unit (as de12 termined under paragraph (5)), 

13 ‘‘(iii) with respect to which the tenant 

14 is not concurrently receiving rental assist15 ance under any other Federal program, 

16 and 

17 ‘‘(iv) which is certified to the rental 

18 reduction credit agency as an eligible unit 

19 for purposes of this section and the quali20 fied rental reduction agreement. 

21 Notwithstanding clause (iii), a State may pro22 vide in its State rental reduction allocation plan 

23 that an eligible unit shall also not include a unit 

24 with respect to which any resident is receiving 


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1 rental assistance under a State or local pro2 gram. 

3 ‘‘(B) LIMITATION ON NUMBER OF

4 UNITS.— 

5 ‘‘(i) IN GENERAL.—The number of 

6 units which may be certified as eligible 

7 units with respect to any qualified building 

8 under subparagraph (A)(iv) at any time 

9 shall not exceed the greater of— 

10 ‘‘(I) 40 percent of the total units 

11 in such building, or 

12 ‘‘(II) 25 units. 

13 In the case of an allocation to a project 

14 under subsection (c)(1)(B), the limitation 

15 under the preceding sentence shall be ap16 plied on a project basis and the certifi17 cation of such eligible units shall be allo18 cated to each building in the project, ex19 cept that if buildings in such project are 

20 on non-contiguous tracts of land, buildings 

21 on each such tract shall be treated as a 

22 separate project for purposes of applying 

23 this sentence. 

24 ‘‘(ii) BUILDINGS RECEIVING PREVIOUS

25 FEDERAL RENTAL ASSISTANCE.—If, at any 


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1 time prior to the entering into of a quali2 fied rental reduction agreement with re3 spect to a qualified building, tenants in 

4 units within such building had been receiv5 ing project-based rental assistance under 

6 any other Federal program, then, notwith7 standing clause (i), the maximum number 

8 of units which may be certified as eligible 

9 units with respect to the building under 

10 subparagraph (A)(iv) shall not be less than 

11 the sum of— 

12 ‘‘(I) the maximum number of 

13 units in the building previously receiv14 ing such assistance at any time before 

15 the agreement takes effect, plus 

16 ‘‘(II) the amount determined 

17 under clause (i) without taking into 

18 account the units described in sub19 clause (I). 

20 ‘‘(4) ELIGIBLE TENANT.— 

21 ‘‘(A) IN GENERAL.—The term ‘eligible ten22 ant’ means any individual if the individual’s 

23 family income does not exceed the greater of— 


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

2 gross income (as determined under section 

3 42(g)(1)), or 

4 ‘‘(ii) the applicable poverty line for a 

5 family of the size involved. 

6 ‘‘(B) TREATMENT OF INDIVIDUALS WHOSE

7 INCOMES RISE ABOVE LIMIT.— 

8 ‘‘(i) IN GENERAL.—Notwithstanding 

9 an increase in the family income of resi10 dents of a unit above the income limitation 

11 applicable under subparagraph (A), such 

12 residents shall continue to be treated as el13 igible tenants if the family income of such 

14 residents initially met such income limita15 tion and such unit continues to be certified 

16 as an eligible unit under this section. 

17 ‘‘(ii) NO RENTAL REDUCTION FOR AT

18 LEAST 2 YEARS.—A qualified rental reduc19 tion agreement with respect to a qualified 

20 building shall provide that if, by reason of 

21 an increase in family income described in 

22 clause (i), there is no qualified rental re23 duction amount with respect to the dwell24 ing unit for 2 consecutive years, the tax25 payer shall rent the next available unit to 


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1 an eligible tenant (without regard to 

2 whether such unit is an eligible unit under 

3 this section). 

4 ‘‘(C) APPLICABLE POVERTY LINE.—The 

5 term ‘applicable poverty line’ means the most 

6 recently published poverty line (within the 

7 meaning of section 2110(c)(5) of the Social Se8 curity Act (42 U.S.C. 1397jj(c)(5))) as of the 

9 time of the determination as to whether an in10 dividual is an eligible tenant. 

11 ‘‘(5) FAMILY INCOME.— 

12 ‘‘(A) IN GENERAL.—Family income shall 

13 be determined in the same manner as under 

14 section 8 of the United States Housing Act of 

15 1937. 

16 ‘‘(B) TIME FOR DETERMINING INCOME.— 

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in this subparagraph, family income 

19 shall be determined at least annually on 

20 the basis of income for the preceding cal21 endar year. 

22 ‘‘(ii) FAMILIES ON FIXED INCOME.—If 

23 at least 90 percent of the family income of 

24 the residents of a unit at the time of any 

25 determination under clause (i) is derived 


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1 from payments under title II or XVI of the 

2 Social Security Act (or any similar fixed 

3 income amounts specified by the Sec4 retary), the taxpayer may elect to treat 

5 such payments (or amounts) as the family 

6 income of such residents for the year of 

7 the determination and the 2 succeeding 

8 years, except that the taxpayer shall, in 

9 such manner as the Secretary may pre10 scribe, adjust such amount for increases in 

11 the cost of living. 

12 ‘‘(iii) INITIAL INCOME.—The Sec13 retary may allow a State to provide that 

14 the family income of residents at the time 

15 such residents first rent a unit in a quali16 fied building may be determined on the 

17 basis of current or anticipated income. 

18 ‘‘(iv) SPECIAL RULES WHERE FAMILY

19 INCOME IS REDUCED.—If residents of a 

20 unit establish (in such manner as the rent21 al reduction credit agency provides) that 

22 their family income has been reduced by at 

23 least 10 percent below such income for the 

24 determination year— 


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1 ‘‘(I) such residents may elect, at 

2 such time and in such manner as such 

3 agency may prescribe, to have their 

4 family income redetermined, and 

5 ‘‘(II) clause (ii) shall not apply to 

6 any of the 2 succeeding years de7 scribed in such clause which are speci8 fied in the election. 

9 ‘‘(f) STATE RENTAL REDUCTION ALLOCATION

10 PLAN.— 

11 ‘‘(1) ADOPTION OF PLAN REQUIRED.— 

12 ‘‘(A) IN GENERAL.—For purposes of this 

13 section— 

14 ‘‘(i) each State shall, before the allo15 cation of its State rental reduction credit 

16 ceiling, establish and have in effect a State 

17 rental reduction allocation plan, and 

18 ‘‘(ii) notwithstanding any other provi19 sion of this section, the rental reduction 

20 credit amount allocated to any building 

21 shall be zero unless such amount was allo22 cated pursuant to a State rental reduction 

23 allocation plan. 


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1 Such plan shall only be adopted after such plan 

2 is made public and at least 60 days has been 

3 allowed for public comment. 

4 ‘‘(B) STATE RENTAL REDUCTION ALLOCA5 TION PLAN.—For purposes of this section, the 

6 term ‘State rental reduction allocation plan’ 

7 means, with respect to any State, any plan of 

8 the State meeting the requirements of para9 graphs (2) and (3). 

10 ‘‘(2) GENERAL PLAN REQUIREMENTS.—A plan 

11 shall meet the requirements of this paragraph only 

12 if— 

13 ‘‘(A) the plan sets forth the criteria and 

14 priorities which a rental reduction credit agency 

15 of the State shall use in allocating the State 

16 rental reduction credit ceiling to eligible units 

17 within a building, 

18 ‘‘(B) the plan provides that no credit allo19 cation shall be made which is not in accordance 

20 with the criteria and priorities set forth under 

21 subparagraph (A) unless such agency provides 

22 a written explanation to the general public for 

23 any credit allocation which is not so made and 

24 the reasons why such allocation is necessary, 

25 and 


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1 ‘‘(C) the plan provides that such agency is 

2 required to prioritize the renewal of existing 

3 credit allocations at the time of the expiration 

4 of the qualified rental reduction agreement with 

5 respect to the allocation, including, where ap6 propriate, a commitment within a qualified 

7 rental reduction agreement that the credit allo8 cation will be renewed if the terms of the agree9 ment have been met and sufficient new credit 

10 authority is available. 

11 ‘‘(3) SPECIFIC REQUIREMENTS.—A plan shall 

12 meet the requirements of this paragraph only if— 

13 ‘‘(A) the plan provides methods for deter14 mining— 

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

16 be charged for a substantially similar unit 

17 in the same building which is not an eligi18 ble unit for purposes of subsection 

19 (b)(2)(A)(i), including whether such deter20 mination may be made by self-certification 

21 or by undertaking rent reasonableness as22 sessments similar to assessments required 

23 under section 8(o)(10) of the United 

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

25 1437f(o)(10)), 


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1 ‘‘(ii) the qualified rental reduction 

2 amounts under subsection (c)(2)(B), and 

3 ‘‘(iii) the applicable percentage under 

4 subsection (e)(1), 

5 ‘‘(B) the plan provides a procedure that 

6 the rental reduction credit agency (or an agent 

7 or other private contractor of such agency) will 

8 follow in monitoring for— 

9 ‘‘(i) noncompliance with the provisions 

10 of this section and the qualified rental re11 duction agreement and in notifying the In12 ternal Revenue Service of any such non13 compliance of which such agency becomes 

14 aware, and 

15 ‘‘(ii) noncompliance with habitability 

16 standards through regular site visits, 

17 ‘‘(C) the plan requires a person receiving a 

18 credit allocation to report to the rental reduc19 tion credit agency such information as is nec20 essary to ensure compliance with the provisions 

21 of this section and the qualified rental reduction 

22 agreement, and 

23 ‘‘(D) the plan provides methods by which 

24 any excess reserve amounts which become avail25 able under subsection (d)(1)(C)(ii) will be used 


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1 to reduce rental payments of eligible tenants or 

2 to address maintenance and repair needs in 

3 qualified buildings, including how such assist4 ance will be allocated among eligible tenants 

5 and qualified buildings. 

6 ‘‘(g) QUALIFIED RENTAL REDUCTION AGREE7 MENT.—For purposes of this section— 

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

9 reduction agreement’ means, with respect to any 

10 building which is residential rental property (as de11 fined in section 168(e)(2)(A)), a written, binding 

12 agreement between a rental reduction credit agency 

13 and the taxpayer which specifies— 

14 ‘‘(A) the number of eligible units within 

15 such building for which a rental reduction cred16 it amount is being allocated, 

17 ‘‘(B) the credit period for such building, 

18 ‘‘(C) the rental reduction credit amount al19 located to such building (and dwelling units 

20 within such building) and the portion of such 

21 amount allocated to each month within the 

22 credit period under subsection (c)(2)(B), 

23 ‘‘(D) the applicable percentage to be used 

24 in computing the qualified rental reduction 

25 amounts with respect to the building, 


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1 ‘‘(E) the method for determining the 

2 amount of rent which may be charged for eligi3 ble units within the building, and 

4 ‘‘(F) whether— 

5 ‘‘(i) the agency commits to entering 

6 into a new agreement with the taxpayer if 

7 the terms of the agreement have been met 

8 and sufficient new credit authority is avail9 able for such new agreement, and 

10 ‘‘(ii) the taxpayer is required to accept 

11 such new agreement. 

12 ‘‘(2) TENANT PROTECTIONS.—A qualified rent13 al reduction agreement shall provide the following: 

14 ‘‘(A) NON-DISPLACEMENT OF NON-ELIGI15 BLE TENANTS.—A taxpayer receiving a rental 

16 reduction credit amount may not refuse to 

17 renew the lease of or evict (other than for good 

18 cause) a tenant of a unit who is not an eligible 

19 tenant at any time during the credit period and 

20 such unit shall not be treated as an eligible unit 

21 while such tenant resides there. 

22 ‘‘(B) ONLY GOOD CAUSE EVICTIONS OF

23 ELIGIBLE TENANTS.—A taxpayer receiving a 

24 rental reduction credit amount may not refuse 

25 to renew the lease of or evict (other than for 


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1 good cause) an eligible tenant of an eligible 

2 unit. 

3 ‘‘(C) MOBILITY.—A taxpayer receiving a 

4 rental reduction credit amount shall— 

5 ‘‘(i) give priority to rent any available 

6 unit of suitable size to tenants who are eli7 gible tenants who are moving from another 

8 qualified building where such tenants had 

9 lived at least 1 year and were in good 

10 standing, and 

11 ‘‘(ii) inform eligible tenants within the 

12 building of their right to move after 1 year 

13 and provide a list maintained by the State 

14 of qualified buildings where such tenants 

15 might move. 

16 ‘‘(iii) FAIR HOUSING AND CIVIL

17 RIGHTS.—If a taxpayer receives a rental 

18 reduction credit amount— 

19 ‘‘(I) such taxpayer shall comply 

20 with the Fair Housing Act with re21 spect to the building, and 

22 ‘‘(II) the receipt of such amount 

23 shall be treated as the receipt of Fed24 eral financial assistance for purposes 


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1 of applying any Federal civil rights 

2 laws. 

3 ‘‘(iv) ADMISSIONS PREFERENCES.—A 

4 taxpayer receiving a rental reduction credit 

5 amount shall comply with any admissions 

6 preferences established by the State for 

7 tenants within particular demographic 

8 groups eligible for health or social services. 

9 ‘‘(3) COMPLIANCE REQUIREMENTS.—A quali10 fied rental reduction agreement shall provide that a 

11 taxpayer receiving a rental reduction credit amount 

12 shall comply with all reporting and other procedures 

13 established by the State to ensure compliance with 

14 this section and such agreement. 

15 ‘‘(4) PROJECTS.—In the case of a rental reduc16 tion credit allocated to a project consisting of more 

17 than 1 building, the rental reduction credit agency 

18 may provide for a single qualified rental reduction 

19 agreement which applies to all buildings which are 

20 part of such project. 

21 ‘‘(h) CERTIFICATIONS AND OTHER REPORTS TO SEC22 RETARY.— 

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

24 YEAR OF CREDIT PERIOD.—Following the close of 

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


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1 to any qualified building, the taxpayer shall certify 

2 to the Secretary (at such time and in such form and 

3 in such manner as the Secretary prescribes)— 

4 ‘‘(A) the information described in sub5 section (g)(1) required to be contained in the 

6 qualified rental reduction agreement with re7 spect to the building, and 

8 ‘‘(B) such other information as the Sec9 retary may require. 

10 In the case of a failure to make the certification re11 quired by the preceding sentence on the date pre12 scribed therefor, unless it is shown that such failure 

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

14 no credit shall be allowable by reason of subsection 

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

16 year ending before such certification is made. 

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

18 The Secretary may require taxpayers to submit an 

19 information return (at such time and in such form 

20 and manner as the Secretary prescribes) for each 

21 taxable year setting forth— 

22 ‘‘(A) the information described in para23 graph (1)(A) for the taxable year, and 

24 ‘‘(B) such other information as the Sec25 retary may require. 


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

2 failure to submit the return required by the Sec3 retary under the preceding sentence on the date pre4 scribed therefor. 

5 ‘‘(3) ANNUAL REPORTS FROM RENTAL REDUC6 TION CREDIT AGENCY.— 

7 ‘‘(A) REPORTS.—Each rental reduction 

8 credit agency which allocates any rental reduc9 tion credit amount to 1 or more buildings for 

10 any calendar year shall submit to the Secretary 

11 (at such time and in such manner as the Sec12 retary shall prescribe) an annual report speci13 fying— 

14 ‘‘(i) the amount of rental reduction 

15 credit amounts allocated to each such 

16 building for such year, 

17 ‘‘(ii) sufficient information to identify 

18 each such building and the taxpayer with 

19 respect thereto, 

20 ‘‘(iii) information as to the demo21 graphic and income characteristics of eligi22 ble tenants of all such buildings to which 

23 such amounts were allocated, and 

24 ‘‘(iv) such other information as the 

25 Secretary may require. 


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1 ‘‘(B) PENALTY.—The penalty under sec2 tion 6652(j) shall apply to any failure to submit 

3 the report required by subparagraph (A) on the 

4 date prescribed therefor. 

5 ‘‘(C) INFORMATION MADE PUBLIC.—The 

6 Secretary shall, in consultation with Secretary 

7 of Housing and Urban Development, make in8 formation reported under this paragraph for 

9 each qualified building available to the public 

10 annually to the greatest degree possible without 

11 disclosing personal information about individual 

12 tenants. 

13 ‘‘(i) SPECIAL RULE FOR PAYMENTS TO PARTNER14 SHIPS AND S CORPORATIONS.—For purposes of this sub15 title, in the case of any qualified building directly held by 

16 any partnership or S corporation, the payment under sec17 tion 6434 shall be made in lieu of the credit determined 

18 under this section with respect to such building. 

19 ‘‘(j) REGULATIONS AND GUIDANCE.—The Secretary 

20 shall prescribe such regulations or guidance as may be 

21 necessary to carry out the purposes of this section, includ22 ing— 

23 ‘‘(1) providing necessary forms and instruc24 tions, and 


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1 ‘‘(2) providing for proper treatment of projects 

2 for which a credit is allowed both under this section 

3 and section 42.’’. 

4 (b) PAYMENT TO PARTNERSHIPS AND S CORPORA5 TIONS IN LIEU OF CREDIT.— 

6 (1) IN GENERAL.—Subchapter B of chapter 65 

7 of the Internal Revenue Code of 1986 is amended by 

8 adding at the end the following new section: 

9 ‘‘SEC. 6434. PAYMENTS IN LIEU OF RENTERS CREDIT FOR 

10 PARTNERSHIPS AND S CORPORATIONS. 

11 ‘‘(a) IN GENERAL.—In the case of any qualified 

12 building (as defined in section 36C(a)(3)) directly held by 

13 any partnership or S corporation, the Secretary shall pay 

14 to such partnership or S corporation for any taxable year 

15 an amount equal to the amount of the credit which, but 

16 for section 36C(i), would be allowed under section 36C 

17 with respect to such building. 

18 ‘‘(b) REGULATORY AUTHORITY.—The Secretary shall 

19 prescribe such regulations, rules, and guidance as may be 

20 necessary to carry out section 36C(i), section 92, and this 

21 section, including regulations, rules, and guidance pro22 viding for— 

23 ‘‘(1) the application of the rules under section 

24 36C with respect to payments under this section in 


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1 the same manner as such rules apply for purposes 

2 of the credit under section 36C, 

3 ‘‘(2) the time and manner of payments under 

4 subsection (a), and 

5 ‘‘(3) the determination of a partner’s distribu6 tive share, or an S corporation shareholder’s pro 

7 rata share, of any payment under subsection (a).’’. 

8 (2) CONFORMING AMENDMENT.—The table of 

9 sections for subchapter B of chapter 65 of the Inter10 nal Revenue Code of 1986 is amended by adding at 

11 the end the following new item: 

‘‘Sec. 6434. Payments in lieu of renters credit for partnerships and S corporations.’’. 

12 (c) CREDIT INCLUDIBLE IN GROSS INCOME.— 

13 (1) IN GENERAL.—Part II of subchapter B of 

14 chapter 1 of the Internal Revenue Code of 1986 is 

15 amended by adding at the end the following new sec16 tion: 

17 ‘‘SEC. 92. INCLUSION IN INCOME OF RENTERS CREDIT AND 

18 PAYMENTS. 

19 ‘‘Gross income includes the amount of the credit al20 lowed to the taxpayer under section 36C for the taxable 

21 year and the amount of any payment in lieu of such credit 

22 under section 6434.’’. 


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1 (2) INCOME DISREGARDED FOR ALTERNATIVE

2 MINIMUM TAXABLE INCOME.—Section 56(a) of such 

3 Code is amended by adding at the end the following: 

4 ‘‘(8) SECTION 92 NOT APPLICABLE.—Section 92 

5 (relating to inclusion in income of renters credit) 

6 shall not apply.’’. 

7 (3) CONFORMING AMENDMENT.—The table of 

8 sections for part II of subchapter B of chapter 1 of 

9 such Code is amended by adding at the end the fol10 lowing new item: 

‘‘Sec. 92. Inclusion in income of renters credit and payments.’’. 

11 (d) ADMINISTRATIVE FEES.—No provision of, or 

12 amendment made by, this Act shall be construed to pre13 vent a rental reduction credit agency of a State from im14 posing fees to cover its costs or from levying any such fee 

15 on a taxpayer applying for or receiving a rental reduction 

16 credit amount. 

17 (e) OTHER CONFORMING AMENDMENTS.— 

18 (1) Section 6211(b)(4) of the Internal Revenue 

19 Code of 1986 is amended by inserting ‘‘36C (includ20 ing any related payment under section 6434),’’ after 

21 ‘‘36B,’’. 

22 (2) Paragraph (2) of section 1324(b) of title 

23 31, United States Code, is amended by inserting 

24 ‘‘36C (including any related payment under section 

25 6434),’’ after ‘‘36B,’’. 


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1 (3) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of the Internal Rev3 enue Code of 1986 is amended by inserting after the 

4 item relating to section 36B the following new item: 

‘‘Sec. 36C. Renters credit.’’. 

5 (f) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2022. 

8 SEC. 213. MIDDLE-INCOME HOUSING TAX CREDIT. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by inserting after section 42 the fol12 lowing new section: 

13 ‘‘SEC. 42A. MIDDLE-INCOME HOUSING CREDIT. 

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

15 amount of the middle-income housing credit determined 

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

17 shall be an amount equal to— 

18 ‘‘(1) the applicable percentage, of 

19 ‘‘(2) the qualified basis of each qualified mid20 dle-income building. 

21 ‘‘(b) APPLICABLE PERCENTAGE.— 

22 ‘‘(1) DETERMINATION OF APPLICABLE PER23 CENTAGE.—For purposes of this section— 

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

25 percentage’ means, with respect to any building, 


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1 the appropriate percentage prescribed by the 

2 Secretary for the earlier of— 

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

4 is placed in service, or 

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

6 the month in which the taxpayer and the 

7 housing credit agency enter into an agree8 ment with respect to such building (which 

9 is binding on such agency, the taxpayer, 

10 and all successors in interest) as to the 

11 housing credit dollar amount to be allo12 cated to such building. 

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

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

15 day after the close of such month. Such an elec16 tion, once made, shall be irrevocable. 

17 ‘‘(B) METHOD OF PRESCRIBING PERCENT18 AGES.—The percentages prescribed by the Sec19 retary for any month shall be percentages which 

20 will yield over a 15-year period amounts of 

21 credit under subsection (a) which have a 

22 present value equal to— 

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

24 of a new building which is not Federally 

25 subsidized for the taxable year, and 


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1 ‘‘(ii) 20 percent of the qualified basis 

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

3 ‘‘(C) METHOD OF DISCOUNTING.—The 

4 present value under subparagraph (B) shall be 

5 determined— 

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

7 of the 15-year period referred to in sub8 paragraph (B), 

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

10 72 percent of the average of the annual 

11 Federal mid-term rate and the annual 

12 Federal long-term rate applicable under 

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

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

15 (A) and compounded annually, and 

16 ‘‘(iii) by assuming that the credit al17 lowable under this section for any year is 

18 received on the last day of such year. 

19 ‘‘(2) MINIMUM CREDIT RATE.— 

20 ‘‘(A) IN GENERAL.—The applicable per21 centage for any building which is not Federally 

22 subsidized for the taxable year shall not be less 

23 than 5 percent. 

24 ‘‘(B) MINIMUM CREDIT RATE FOR FEDER25 ALLY SUBSIDIZED BUILDINGS.—In the case of 


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1 any building to which subparagraph (A) does 

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

3 the applicable percentage shall not be less than 

4 2 percent. 

5 ‘‘(3) EXCEPTION FOR CERTAIN FEDERALLY

6 SUBSIDIZED BUILDINGS.—In the case of any build7 ing to which paragraph (2)(A) does not apply, the 

8 applicable percentage is zero unless— 

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

10 with respect to such building for the taxable 

11 year, and 

12 ‘‘(B) such building is financed by tax-ex13 empt bonds as described in section 42(h)(4). 

14 ‘‘(4) CROSS REFERENCES.— 

15 ‘‘(A) For treatment of certain rehabilita16 tion expenditures as separate new buildings, see 

17 subsection (e). 

18 ‘‘(B) For determination of applicable per19 centage for increases in qualified basis after the 

20 1st year of the credit period, see subsection 

21 (f)(3). 

22 ‘‘(C) For authority of housing credit agen23 cy to limit applicable percentage and qualified 

24 basis which may be taken into account under 


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1 this section with respect to any building, see 

2 subsection (h)(6). 

3 ‘‘(c) QUALIFIED BASIS; QUALIFIED MIDDLE-INCOME

4 BUILDING.—For purposes of this section— 

5 ‘‘(1) QUALIFIED BASIS.— 

6 ‘‘(A) DETERMINATION.—The qualified 

7 basis of any qualified middle-income building 

8 for any taxable year is an amount equal to— 

9 ‘‘(i) the applicable fraction (deter10 mined as of the close of such taxable year) 

11 of 

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

13 (determined under subsection (d)). 

14 ‘‘(B) APPLICABLE FRACTION.—For pur15 poses of subparagraph (A), the term ‘applicable 

16 fraction’ means the smaller of the unit fraction 

17 or the floor space fraction. 

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

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

20 means the fraction— 

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

22 number of middle-income units in the 

23 building, and 


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

2 number of residential rental units (whether 

3 or not occupied) in such building. 

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

6 space fraction’ means the fraction— 

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

8 total floor space of the middle-income units 

9 in such building, and 

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

11 total floor space of the residential rental 

12 units (whether or not occupied) in such 

13 building. 

14 ‘‘(2) QUALIFIED MIDDLE-INCOME BUILDING.— 

15 The term ‘qualified middle-income building’ means 

16 any building which is part of a qualified middle-in17 come housing project at all times during the pe18 riod— 

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

20 period on which such building is part of such a 

21 project, and 

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

23 period with respect to such building. 

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


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

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

3 the 1st taxable year of the credit period. 

4 ‘‘(2) EXISTING BUILDINGS.— 

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

6 an existing building is— 

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

8 meets the requirements of subparagraph 

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

10 the 1st taxable year of the credit period, 

11 and 

12 ‘‘(ii) zero in any other case. 

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

14 the requirements of this subparagraph if— 

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

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

18 years between the date of its acquisition by 

19 the taxpayer and the date the building was 

20 last placed in service, 

21 ‘‘(iii) the building was not previously 

22 placed in service by the taxpayer or by any 

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


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1 ‘‘(iv) except as provided in subsection 

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

4 respect to the building. 

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

6 subparagraph (A), the adjusted basis of any 

7 building shall not include so much of the basis 

8 of such building as is determined by reference 

9 to the basis of other property held at any time 

10 by the person acquiring the building. 

11 ‘‘(D) SPECIAL RULES.— 

12 ‘‘(i) SPECIAL RULES FOR CERTAIN

13 TRANSFERS.—For purposes of determining 

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

16 not be taken into account any placement in 

17 service— 

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

20 in which the basis of the building in 

21 the hands of the person acquiring it is 

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

24 building in the hands of the person 

25 from whom acquired, 


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1 ‘‘(II) by a person whose basis in 

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

5 ‘‘(III) by any governmental unit 

6 or qualified nonprofit organization if 

7 the requirements of subparagraph 

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

9 placement in service by such unit or 

10 organization and all the income from 

11 such property is exempt from Federal 

12 income taxation, 

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

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

18 requirements of subparagraph (B)(ii) 

19 are met with respect to the placement 

20 in service by such person and such 

21 building is resold within 12 months 

22 after the date such building is placed 

23 in service by such person after such 

24 foreclosure, or 


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1 ‘‘(V) of a single-family residence 

2 by any individual who owned and used 

3 such residence for no other purpose 

4 than as his principal residence. 

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

7 (hereinafter in this subclause referred to as 

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

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

12 and such person are engaged in trades or 

13 businesses under common control (within 

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

15 section 52). 

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

18 this subsection— 

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

20 subparagraph (B), the adjusted basis of any 

21 building shall be determined without regard to 

22 the adjusted basis of any property which is not 

23 residential rental property. 

24 ‘‘(B) BASIS OF PROPERTY IN COMMON

25 AREAS, ETC., INCLUDED.— 


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

3 any building shall be determined by taking 

4 into account the adjusted basis of property 

5 (of a character subject to the allowance for 

6 depreciation) used in common areas or 

7 provided as comparable amenities to all 

8 residential rental units in such building. 

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

10 any building for which the low-income 

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

13 under this section shall be determined 

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

16 amenities to all residential rental units in 

17 such building. 

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

20 be determined without regard to paragraphs (2) 

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

22 ‘‘(4) FEDERAL GRANTS NOT TAKEN INTO AC23 COUNT IN DETERMINING ELIGIBLE BASIS.—The eli24 gible basis of a building shall not include any costs 


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1 financed with the proceeds of a Federally funded 

2 grant. 

3 ‘‘(5) CREDIT ALLOWABLE FOR CERTAIN BUILD4 INGS ACQUIRED DURING 10-YEAR PERIOD.—On ap5 plication by the taxpayer, the Secretary may waive 

6 paragraph (2)(B)(ii) with respect to any building ac7 quired from an insured depository institution in de8 fault (as defined in section 3 of the Federal Deposit 

9 Insurance Act) or from a receiver or conservator of 

10 such an institution. 

11 ‘‘(6) ACQUISITION OF BUILDING BEFORE END

12 OF PRIOR CREDIT PERIOD.— 

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

14 prescribed by the Secretary, in the case of a 

15 building described in subparagraph (B) (or in16 terest therein) which is acquired by the tax17 payer— 

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

19 but 

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

21 subsection (a) to the taxpayer for any pe22 riod after such acquisition shall be equal to 

23 the amount of credit which would have 

24 been allowable under subsection (a) for 

25 such period to the prior owner referred to 


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1 in subparagraph (B) had such owner not 

2 disposed of the building. 

3 ‘‘(B) DESCRIPTION OF BUILDING.—A 

4 building is described in this subparagraph if— 

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

6 subsection (a) to any prior owner of such 

7 building, and 

8 ‘‘(ii) the taxpayer acquired such build9 ing before the end of the credit period for 

10 such building with respect to such prior 

11 owner (determined without regard to any 

12 disposition by such prior owner). 

13 ‘‘(e) REHABILITATION EXPENDITURES TREATED AS

14 SEPARATE NEW BUILDING.— 

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

16 paid or incurred by the taxpayer with respect to any 

17 building shall be treated for purposes of this section 

18 as a separate new building. 

19 ‘‘(2) REHABILITATION EXPENDITURES.—For 

20 purposes of paragraph (1)— 

21 ‘‘(A) IN GENERAL.—The term ‘rehabilita22 tion expenditures’ means amounts chargeable to 

23 capital account and incurred for property (or 

24 additions or improvements to property) of a 

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1 tion in connection with the rehabilitation of a 

2 building. 

3 ‘‘(B) COST OF ACQUISITION, ETC., NOT IN4 CLUDED.—Such term does not include the cost 

5 of acquiring any building (or interest therein) 

6 or any amount not permitted to be taken into 

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

8 ‘‘(C) CERTAIN RELOCATION COSTS.—In 

9 the case of a rehabilitation of a building to 

10 which section 280B does not apply, costs relat11 ing to the relocation of occupants, including— 

12 ‘‘(i) amounts paid to occupants, 

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

14 services relating to such relocation, and 

15 ‘‘(iii) amounts paid for temporary 

16 housing for occupants, 

17 shall be treated as chargeable to capital account 

18 and taken into account as rehabilitation ex19 penditures. 

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

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

22 apply to rehabilitation expenditures with respect 

23 to any building only if— 


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1 ‘‘(i) the expenditures are allocable to 

2 1 or more middle-income units or substan3 tially benefit such units, and 

4 ‘‘(ii) the amount of such expenditures 

5 during any 24-month period meets the re6 quirements of whichever of the following 

7 subclauses requires the greater amount of 

8 such expenditures: 

9 ‘‘(I) The requirement of this sub10 clause is met if such amount is not 

11 less than 20 percent of the adjusted 

12 basis of the building (determined as of 

13 the 1st day of such period and with14 out regard to paragraphs (2) and (3) 

15 of section 1016(a)). 

16 ‘‘(II) The requirement of this 

17 subclause is met if the qualified basis 

18 attributable to such amount, when di19 vided by the number of middle-income 

20 units in the building, is equal to or 

21 greater than the dollar amount in ef22 fect under section 42(e)(3)(A)(ii)(II) 

23 for the calendar year in which such 

24 expenditures are treated as placed in 

25 service under paragraph (4). 


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1 ‘‘(B) DATE OF DETERMINATION.—The de2 termination under subparagraph (A) shall be 

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

4 the credit period with respect to such expendi5 tures. 

6 ‘‘(4) SPECIAL RULES.—For purposes of apply7 ing this section with respect to expenditures which 

8 are treated as a separate building by reason of this 

9 subsection— 

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

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

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

13 ‘‘(B) the applicable fraction under sub14 section (c)(1) shall be the applicable fraction for 

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

16 with respect to which the expenditures were in17 curred. 

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

19 from being allowed by reason of this subsection. 

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

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

22 taken into account under this subsection or sub23 section (d)(2)(A)(i) but not under both such sub24 sections. 


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1 ‘‘(6) REGULATIONS TO APPLY SUBSECTION

2 WITH RESPECT TO GROUP OF UNITS IN BUILDING.— 

3 The Secretary may prescribe regulations, consistent 

4 with the purposes of this subsection, treating a 

5 group of units with respect to which rehabilitation 

6 expenditures are incurred as a separate new build7 ing. 

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

9 CREDIT PERIOD.— 

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

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

12 respect to any building, the period of 15 taxable 

13 years beginning with— 

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

15 is placed in service, or 

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

17 succeeding taxable year, 

18 but only if the building is a qualified middle-income 

19 building as of the close of the 1st year of such pe20 riod. The election under subparagraph (B), once 

21 made, shall be irrevocable. 

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

23 PERIOD.— 

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

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1 ing for the 1st taxable year of the credit period 

2 shall be determined by substituting for the ap3 plicable fraction under subsection (c)(1) the 

4 fraction— 

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

6 sum of the applicable fractions determined 

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

8 each full month of such year during which 

9 such building was in service, and 

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

11 ‘‘(B) DISALLOWED 1ST-YEAR CREDIT AL12 LOWED IN 16TH YEAR.—Any reduction by rea13 son of subparagraph (A) in the credit allowable 

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

15 1st taxable year of the credit period shall be al16 lowable under subsection (a) for the 1st taxable 

17 year following the credit period. 

18 ‘‘(3) DETERMINATION OF APPLICABLE PER19 CENTAGE WITH RESPECT TO INCREASES IN QUALI20 FIED BASIS AFTER 1ST YEAR OF CREDIT PERIOD.— 

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

22 building which was a qualified middle-income 

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

24 credit period, if— 


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

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

3 such period) the qualified basis of such 

4 building, exceeds 

5 ‘‘(ii) the qualified basis of such build6 ing as of the close of the 1st year of the 

7 credit period, 

8 the applicable percentage which shall apply 

9 under subsection (a) for the taxable year to 

such excess shall be the percentage equal to 2 10 ⁄3

11 of the applicable percentage which (after the 

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

13 paragraph apply to such basis. 

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

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

16 shall apply to any increase in qualified basis to 

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

18 of such increase. 

19 ‘‘(4) DISPOSITIONS OF PROPERTY.—If a build20 ing (or an interest therein) is disposed of during any 

21 year for which credit is allowable under subsection 

22 (a), such credit shall be allocated between the par23 ties on the basis of the number of days during such 

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


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1 ‘‘(5) CREDIT PERIOD FOR EXISTING BUILDINGS

2 NOT TO BEGIN BEFORE REHABILITATION CREDIT

3 ALLOWED.— 

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

5 an existing building shall not begin before the 

6 1st taxable year of the credit period for reha7 bilitation expenditures with respect to the build8 ing. 

9 ‘‘(B) ACQUISITION CREDIT ALLOWED FOR

10 CERTAIN BUILDINGS NOT ALLOWED A REHA11 BILITATION CREDIT.— 

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

13 building described in clause (ii)— 

14 ‘‘(I) subsection (d)(2)(B)(iv) 

15 shall not apply, and 

16 ‘‘(II) the credit period for such 

17 building shall not begin before the 

18 taxable year which would be the 1st 

19 taxable year of the credit period for 

20 rehabilitation expenditures with re21 spect to the building under the modi22 fications described in clause (ii)(II). 

23 ‘‘(ii) BUILDING DESCRIBED.—A build24 ing is described in this clause if— 


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1 ‘‘(I) a waiver is granted under 

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

3 acquisition of the building, and 

4 ‘‘(II) a credit would be allowed 

5 for rehabilitation expenditures with 

6 respect to such building if subsection 

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

8 the dollar amount in effect under sub9 section (e)(3)(A)(ii)(II) were two10 thirds of such amount. 

11 ‘‘(g) QUALIFIED MIDDLE-INCOME HOUSING

12 PROJECT.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—The term ‘qualified middle14 income housing project’ means any project for resi15 dential rental property if 60 percent or more of the 

16 residential units in such project are both rent-re17 stricted and occupied by individuals whose income is 

18 100 percent or less of area median gross income. 

19 For purposes of the preceding sentence, residential 

20 units in a building which is not a qualified middle21 income building by reason of subsection (c)(2)(B) 

22 shall not be taken into account. 

23 ‘‘(2) RENT-RESTRICTED UNITS.— 

24 ‘‘(A) IN GENERAL.—For purposes of para25 graph (1), a residential unit is rent-restricted if 


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1 the gross rent with respect to such unit does 

2 not exceed 30 percent of the imputed income 

3 limitation applicable to such unit. For purposes 

4 of the preceding sentence, the amount of the in5 come limitation under paragraph (1) applicable 

6 for any period shall not be less than such limi7 tation applicable for the earliest period the 

8 building (which contains the unit) was included 

9 in the determination of whether the project is 

10 a qualified middle-income housing project. 

11 ‘‘(B) GROSS RENT.—For purposes of sub12 paragraph (A), gross rent— 

13 ‘‘(i) includes any utility allowance de14 termined by the Secretary after taking into 

15 account such determinations under section 

16 8 of the United States Housing Act of 

17 1937, 

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

19 supportive service which is paid to the 

20 owner of the unit (on the basis of the mid21 dle-income status of the tenant of the unit) 

22 by any governmental program of assistance 

23 (or by an organization described in section 

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1 tion) provides assistance for rent and the 

2 amount of assistance provided for rent is 

3 not separable from the amount of assist4 ance provided for supportive services, and 

5 ‘‘(iii) does not include any rental pay6 ment to the owner of the unit to the extent 

7 such owner pays an equivalent amount to 

8 the Farmers’ Home Administration under 

9 section 515 of the Housing Act of 1949. 

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

11 service’ means any service provided under a 

12 planned program of services designed to enable 

13 residents of a residential rental property to re14 main independent and avoid placement in a 

15 hospital, nursing home, or intermediate care fa16 cility for the mentally or physically handi17 capped. 

18 ‘‘(C) IMPUTED INCOME LIMITATION APPLI19 CABLE TO UNIT.—For purposes of this para20 graph, the imputed income limitation applicable 

21 to a unit is the income limitation which would 

22 apply under paragraph (1) to individuals occu23 pying the unit if the number of individuals oc24 cupying the unit were as follows: 


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

2 not have a separate bedroom, 1 individual. 

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

4 1 or more separate bedrooms, 1.5 individ5 uals for each separate bedroom. 

6 In the case of a project with respect to which 

7 a credit is allowable by reason of this section 

8 and for which financing is provided by a bond 

9 described in section 142(a)(7), the imputed in10 come limitation shall apply in lieu of the other11 wise applicable income limitation for purposes 

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

13 ‘‘(D) TREATMENT OF UNITS OCCUPIED BY

14 INDIVIDUALS WHOSE INCOMES RISE ABOVE

15 LIMIT.— 

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clause (ii), notwithstanding an in18 crease in the income of the occupants of a 

19 middle-income unit above the income limi20 tation applicable under paragraph (1), 

21 such unit shall continue to be treated as a 

22 middle-income unit if the income of such 

23 occupants initially met such income limita24 tion and such unit continues to be rent-re25 stricted. 


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1 ‘‘(ii) NEXT AVAILABLE UNIT MUST BE

2 RENTED TO MIDDLE-INCOME TENANT IF

3 INCOME RISES ABOVE 140 PERCENT OF IN4 COME LIMIT.—If the income of the occu5 pants of the unit increases above 140 per6 cent of the income limitation applicable 

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

8 to apply to such unit if any residential 

9 rental unit in the building (of a size com10 parable to, or smaller than, such unit) is 

11 occupied by a new resident whose income 

12 exceeds such income limitation. 

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

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

15 provided in this paragraph, a building shall be 

16 treated as a qualified middle-income building 

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

18 part) meets the requirements of paragraph (1) 

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

20 credit period for such building. 

21 ‘‘(B) BUILDINGS WHICH RELY ON LATER

22 BUILDINGS FOR QUALIFICATION.— 

23 ‘‘(i) IN GENERAL.—In determining 

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1 ing’) is a qualified middle-income building, 

2 the taxpayer may take into account 1 or 

3 more additional buildings placed in service 

4 during the 12-month period described in 

5 subparagraph (A) with respect to the prior 

6 building only if the taxpayer elects to apply 

7 clause (ii) with respect to each additional 

8 building taken into account. 

9 ‘‘(ii) TREATMENT OF ELECTED

10 BUILDINGS.—In the case of a building 

11 which the taxpayer elects to take into ac12 count under clause (i), the period under 

13 subparagraph (A) for such building shall 

14 end at the close of the 12-month period ap15 plicable to the prior building. 

16 ‘‘(iii) DATE PRIOR BUILDING IS

17 TREATED AS PLACED IN SERVICE.—For 

18 purposes of determining the credit period 

19 for the prior building, the prior building 

20 shall be treated for purposes of this section 

21 as placed in service on the most recent 

22 date any additional building elected by the 

23 taxpayer (with respect to such prior build24 ing) was placed in service. 

25 ‘‘(C) SPECIAL RULE.—A building— 


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

2 in service as part of a project, and 

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

4 placed in service during the 12-month pe5 riod described in subparagraph (A) with 

6 respect to a prior building which becomes 

7 a qualified middle-income building, 

8 shall in no event be treated as a qualified mid9 dle-income building unless the project is a 

10 qualified middle-income housing project (with11 out regard to such building) on the date such 

12 building is placed in service. 

13 ‘‘(D) PROJECTS WITH MORE THAN 1

14 BUILDING MUST BE IDENTIFIED.—For pur15 poses of this section, a project shall be treated 

16 as consisting of only 1 building unless, before 

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

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

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

20 project is identified in such form and manner 

21 as the Secretary may provide. 

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

23 Paragraphs (2) (other than subparagraph (A) there24 of), (3), and (7) of section 142(d), and section 

25 6652(j), shall apply for purposes of determining 


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1 whether any project is a qualified middle-income 

2 housing project and whether any unit is a middle-in3 come unit; except that, in applying such provisions 

4 for such purposes— 

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

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

7 of this subsection, and 

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

9 means the limitation under paragraph (1) of 

10 this subsection. 

11 ‘‘(5) ELECTION TO TREAT BUILDING AFTER

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

13 purposes of this section, the taxpayer may elect to 

14 treat any building as not part of a qualified middle15 income housing project for any period beginning 

16 after the credit period for such building. 

17 ‘‘(6) SPECIAL RULE WHERE DE MINIMIS EQ18 UITY CONTRIBUTION.—Property shall not be treated 

19 as failing to be residential rental property for pur20 poses of this section merely because the occupant of 

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

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

23 toward the purchase by such occupant of a residen24 tial unit in such project if— 


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

2 the occupant on the cessation of his occupancy 

3 of a unit in the project, and 

4 ‘‘(B) the purchase of the unit is not per5 mitted until after the close of the credit period 

6 with respect to the building in which the unit 

7 is located. 

8 Any amount paid to the lessor as described in the 

9 preceding sentence shall be included in gross rent 

10 under paragraph (2) for purposes of determining 

11 whether the unit is rent-restricted. 

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

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

14 treated as a project for purposes of this section shall 

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

16 the buildings are rent-restricted (within the meaning 

17 of paragraph (2)) residential rental units. 

18 ‘‘(8) WAIVER OF CERTAIN RECERTIFI19 CATIONS.—On application by the taxpayer, the Sec20 retary may waive any annual recertification of ten21 ant income for purposes of this subsection, if the en22 tire building is occupied by middle-income tenants. 

23 ‘‘(9) CLARIFICATION OF GENERAL PUBLIC USE

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

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1 cupancy restrictions or preferences that favor ten2 ants— 

3 ‘‘(A) with special needs, or 

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

5 under a Federal program or State program or 

6 policy that supports housing for such a speci7 fied group. 

8 ‘‘(h) LIMITATION ON AGGREGATE CREDIT ALLOW9 ABLE WITH RESPECT TO PROJECTS LOCATED IN A

10 STATE.— 

11 ‘‘(1) CREDIT MAY NOT EXCEED CREDIT

12 AMOUNT ALLOCATED TO BUILDING.— 

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

14 credit determined under this section for any 

15 taxable year with respect to any building shall 

16 not exceed the housing credit dollar amount al17 located to such building under this subsection. 

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

19 Except in the case of an allocation which meets 

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

21 (E), or (F), an allocation shall be taken into ac22 count under subparagraph (A) only if it is 

23 made not later than the close of the calendar 

24 year in which the building is placed in service. 


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1 ‘‘(C) EXCEPTION WHERE BINDING COM2 MITMENT.—An allocation meets the require3 ments of this subparagraph if there is a binding 

4 commitment (not later than the close of the cal5 endar year in which the building is placed in 

6 service) by the housing credit agency to allocate 

7 a specified housing credit dollar amount to such 

8 building beginning in a specified later taxable 

9 year. 

10 ‘‘(D) EXCEPTION WHERE INCREASE IN

11 QUALIFIED BASIS.— 

12 ‘‘(i) IN GENERAL.—An allocation 

13 meets the requirements of this subpara14 graph if such allocation is made not later 

15 than the close of the calendar year in 

16 which ends the taxable year to which it will 

17 1st apply but only to the extent the 

18 amount of such allocation does not exceed 

19 the limitation under clause (ii). 

20 ‘‘(ii) LIMITATION.—The limitation 

21 under this clause is the amount of credit 

22 allowable under this section (without re23 gard to this subsection) for a taxable year 

24 with respect to an increase in the qualified 


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1 basis of the building equal to the excess 

2 of— 

3 ‘‘(I) the qualified basis of such 

4 building as of the close of the 1st tax5 able year to which such allocation will 

6 apply, over 

7 ‘‘(II) the qualified basis of such 

8 building as of the close of the 1st tax9 able year to which the most recent 

10 prior housing credit allocation with re11 spect to such building applied. 

12 ‘‘(iii) HOUSING CREDIT DOLLAR

13 AMOUNT REDUCED BY FULL ALLOCA14 TION.—Notwithstanding clause (i), the full 

15 amount of the allocation shall be taken 

16 into account under paragraph (2). 

17 ‘‘(E) EXCEPTION WHERE 10 PERCENT OF

18 COST INCURRED.— 

19 ‘‘(i) IN GENERAL.—An allocation 

20 meets the requirements of this subpara21 graph if such allocation is made with re22 spect to a qualified building which is 

23 placed in service not later than the close of 

24 the second calendar year following the cal25 endar year in which the allocation is made. 


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1 ‘‘(ii) QUALIFIED BUILDING.—For pur2 poses of clause (i), the term ‘qualified 

3 building’ means any building which is part 

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

5 project (as of the date which is 1 year 

6 after the date that the allocation was 

7 made) is more than 10 percent of the tax8 payer’s reasonably expected basis in such 

9 project (as of the close of the second cal10 endar year referred to in clause (i)). Such 

11 term does not include any existing building 

12 unless a credit is allowable under sub13 section (e) for rehabilitation expenditures 

14 paid or incurred by the taxpayer with re15 spect to such building for a taxable year 

16 ending during the second calendar year re17 ferred to in clause (i) or the prior taxable 

18 year. 

19 ‘‘(F) ALLOCATION OF CREDIT ON A

20 PROJECT BASIS.— 

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

22 project which includes (or will include) 

23 more than 1 building, an allocation meets 

24 the requirements of this subparagraph if— 


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

2 project for a calendar year during the 

3 project period, 

4 ‘‘(II) the allocation only applies 

5 to buildings placed in service during 

6 or after the calendar year for which 

7 the allocation is made, and 

8 ‘‘(III) the portion of such alloca9 tion which is allocated to any building 

10 in such project is specified not later 

11 than the close of the calendar year in 

12 which the building is placed in service. 

13 ‘‘(ii) PROJECT PERIOD.—For pur14 poses of clause (i), the term ‘project pe15 riod’ means the period— 

16 ‘‘(I) beginning with the 1st cal17 endar year for which an allocation 

18 may be made for the 1st building 

19 placed in service as part of such 

20 project, and 

21 ‘‘(II) ending with the calendar 

22 year the last building is placed in 

23 service as part of such project. 

24 ‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY

25 TO ALL TAXABLE YEARS ENDING DURING OR AFTER


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1 CREDIT ALLOCATION YEAR.—Any housing credit dol2 lar amount allocated to any building for any cal3 endar year— 

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

5 taxable years in the credit period ending during 

6 or after such calendar year, and 

7 ‘‘(B) shall reduce the aggregate housing 

8 credit dollar amount of the allocating agency 

9 only for such calendar year. 

10 ‘‘(3) HOUSING CREDIT DOLLAR AMOUNT FOR

11 AGENCIES.— 

12 ‘‘(A) IN GENERAL.—The aggregate hous13 ing credit dollar amount which a housing credit 

14 agency may allocate for any calendar year is 

15 the portion of the State housing credit ceiling 

16 allocated under this paragraph for such cal17 endar year to such agency. 

18 ‘‘(B) STATE CEILING INITIALLY ALLO19 CATED TO STATE HOUSING CREDIT AGEN20 CIES.—Except as provided in subparagraph 

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

22 calendar year shall be allocated to the housing 

23 credit agency of such State. If there is more 

24 than 1 housing credit agency of a State, all 


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1 such agencies shall be treated as a single agen2 cy. 

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

4 The State housing credit ceiling applicable to 

5 any State for any calendar year shall be an 

6 amount equal to the sum of— 

7 ‘‘(i) the greater of— 

8 ‘‘(I) $1.00 multiplied by the 

9 State population, or 

10 ‘‘(II) $1,140,000, plus 

11 ‘‘(ii) the amount of State housing 

12 credit ceiling returned in the calendar year. 

13 For purposes of clause (ii), the amount of State 

14 housing credit ceiling returned in the calendar 

15 year equals the housing credit dollar amount 

16 previously allocated within the State to any 

17 project which fails to meet the 10 percent test 

18 under paragraph (1)(E)(ii) on a date after the 

19 close of the calendar year in which the alloca20 tion was made or which does not become a 

21 qualified middle-income housing project within 

22 the period required by this section or the terms 

23 of the allocation or to any project with respect 

24 to which an allocation is cancelled by mutual 


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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 2024, 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 2023’ for ‘calendar 

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

24 thereof. 

25 ‘‘(ii) ROUNDING.— 


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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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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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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 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00185 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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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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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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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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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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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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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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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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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 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00193 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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

2 case of a building to which clause (i) ap3 plies, the applicable fraction shall not ex4 ceed 80 percent of the unit fraction. 

5 ‘‘(iii) CERTAIN UNRENTED UNITS

6 TREATED AS OWNER-OCCUPIED.—In the 

7 case of a building to which clause (i) ap8 plies, any unit which is not rented for 90 

9 days or more shall be treated as occupied 

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

11 day it is not rented. 

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

13 means a building the original use of which begins 

14 with the taxpayer. 

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

16 building’ means any building which is not a new 

17 building. 

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

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

20 credit determined under subsection (a) shall be ap21 portioned between the estate or trust and the bene22 ficiaries on the basis of the income of the estate or 

23 trust allocable to each. 

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

25 PROPERTY.— 


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

2 tax benefit shall fail to be allowable to the tax3 payer with respect to any qualified middle-in4 come building merely by reason of an option 

5 held by the tenants (in cooperative form or oth6 erwise) or resident management corporation of 

7 such building or by a qualified nonprofit organi8 zation or government agency to purchase the 

9 property or all of the partnership interests 

10 (other than interests of the person exercising 

11 such option or a related party thereto (within 

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

13 relating to the property after the close of the 

14 credit period for a price which is not less than 

15 the minimum purchase price determined under 

16 subparagraph (B). 

17 ‘‘(B) MINIMUM PURCHASE PRICE.—For 

18 purposes of subparagraph (A), the minimum 

19 purchase price under this subparagraph is an 

20 amount equal to the principal amount of out21 standing indebtedness secured by the building 

22 (other than indebtedness incurred within the 5- 

23 year period ending on the date of the sale to 

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

25 partnership interest, the minimum purchase 


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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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1 ‘‘(iv) the reasonableness of the devel2 opmental and operational costs of the 

3 project. 

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

5 the development of projects in hard-to-develop 

6 areas. Such a determination shall not be con7 strued to be a representation or warranty as to 

8 the feasibility or viability of the project. 

9 ‘‘(C) DETERMINATION MADE WHEN CRED10 IT AMOUNT APPLIED FOR AND WHEN BUILDING

11 PLACED IN SERVICE.— 

12 ‘‘(i) IN GENERAL.—A determination 

13 under subparagraph (A) shall be made as 

14 of each of the following times: 

15 ‘‘(I) The application for the 

16 housing credit dollar amount. 

17 ‘‘(II) The allocation of the hous18 ing credit dollar amount. 

19 ‘‘(III) The date the building is 

20 placed in service. 

21 ‘‘(ii) CERTIFICATION AS TO AMOUNT

22 OF OTHER SUBSIDIES.—Prior to each de23 termination under clause (i), the taxpayer 

24 shall certify to the housing credit agency 

25 the full extent of all Federal, State, and 


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1 local subsidies which apply (or which the 

2 taxpayer expects to apply) with respect to 

3 the building. 

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

5 such regulations as may be necessary or appropriate to 

6 carry out the purposes of this section, including regula7 tions— 

8 ‘‘(1) dealing with— 

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

10 building or only a portion of a building, or 

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

12 in portions, 

13 ‘‘(2) providing for the application of this section 

14 to short taxable years, 

15 ‘‘(3) preventing the avoidance of the rules of 

16 this section, and 

17 ‘‘(4) providing the opportunity for housing cred18 it agencies to correct administrative errors and omis19 sions with respect to allocations and record keeping 

20 within a reasonable period after their discovery, tak21 ing into account the availability of regulations and 

22 other administrative guidance from the Secretary.’’. 

23 (b) TREATMENT AS PART OF GENERAL BUSINESS

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

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1 graph (40), by striking the period at the end of paragraph 

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

3 following new paragraph: 

4 ‘‘(42) the middle-income housing credit deter5 mined under section 42A(a).’’. 

6 (c) UNUSED ALLOCATIONS CARRIED OVER TO LOW7 INCOME HOUSING CREDIT.— 

8 (1) IN GENERAL.—Clause (i) of section 

9 42(h)(3)(C) of the Internal Revenue Code of 1986 

10 is amended— 

11 (A) by striking ‘‘the unused’’ and inserting 

12 ‘‘the sum of— 

13 ‘‘(I) the unused’’, 

14 (B) by inserting ‘‘plus’’ after ‘‘calendar 

15 year,’’, and 

16 (C) by adding at the end the following new 

17 subclause: 

18 ‘‘(II) the unused middle-income 

19 State housing credit (if any) of such 

20 State for the preceding calendar 

21 year,’’. 

22 (2) UNUSED MIDDLE-INCOME STATE HOUSING

23 CREDIT.—The second sentence of section 

24 42(h)(3)(C) of such Code is amended by inserting ‘‘, 

25 and the unused middle-income State housing credit 


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1 for any calendar year is the excess (if any) of the 

2 amount described in section 42A(h)(3)(C) (after ap3 plication of section 42A(h)(7)) for such State over 

4 the aggregate amount of middle-income housing 

5 credit dollar amount allocated by such State under 

6 section 42A for such year’’ after ‘‘for such year’’. 

7 (3) UNUSED MIDDLE INCOME STATE HOUSING

8 CREDIT INCLUDED IN CARRYOVER ALLOCATION.— 

9 Section 42(h)(3)(D)(ii) of such Code is amended— 

10 (A) by inserting ‘‘the sum of’’ after ‘‘is the 

11 excess (if any) of’’; and 

12 (B) by inserting ‘‘plus the unused middle13 income State housing credit (as so defined)’’ 

14 after ‘‘as defined in subparagraph (C)(i))’’. 

15 (d) REDUCTION IN BASIS.—Section 1016(a) of the 

16 Internal Revenue Code of 1986 is amended— 

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

18 (37); 

19 (2) by redesignating paragraph (38) as para20 graph (39); and 

21 (3) by inserting after paragraph (37) the fol22 lowing new paragraph: 

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

24 42A(i)(8), and’’. 


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1 (e) TREATMENT UNDER BASE EROSION MINIMUM

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

3 1986 is amended by redesignating subparagraphs (B) and 

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

5 inserting after subparagraphs (A) the following new sub6 paragraph: 

7 ‘‘(B) the middle-income housing credit de8 termined under section 42A(a),’’. 

9 (f) CONFORMING AMENDMENTS.— 

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

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

12 after ‘‘42’’. 

13 (2) Section 50(c)(3)(C) of such Code is amend14 ed by inserting ‘‘or 42A’’ after ‘‘42’’. 

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

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

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

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

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

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

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

22 amended by inserting after the item relating to sec23 tion 42 the following new item: 

‘‘Sec. 42A. Middle-income housing credit.’’. 

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

25 this section shall apply to buildings placed in service after 


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1 December 31, 2023, in taxable years ending after such 

2 date. 

3 SEC. 214. NEIGHBORHOOD HOMES CREDIT. 

4 (a) FINDINGS AND PURPOSE.— 

5 (1) FINDINGS.—Congress finds the following: 

6 (A) Experts have determined that it could 

7 take nearly a decade to address the housing 

8 shortage in the United States, in large part due 

9 to increasing housing prices and decreased 

10 housing inventory. 

11 (B) The housing supply shortage dis12 proportionately impacts low-income and dis13 tressed communities. 

14 (C) Homeownership is a primary source of 

15 household wealth and neighborhood stability. 

16 Many distressed communities have low rates of 

17 homeownership and lack quality, affordable 

18 starter homes. 

19 (D) Housing revitalization in distressed 

20 communities is prevented by the value gap, the 

21 difference between the price to rehabilitate a 

22 home and the sale value of the home. 

23 (E) The Neighborhood Homes Investment 

24 Act can address the value gap to increase hous25 ing rehabilitation in distressed communities. 


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1 (F) This section and the amendments 

2 made by this section have the potential to gen3 erate 500,000 homes over 10 years, 

4 $125,000,000,000 of total development activity, 

5 over 800,000 jobs in construction and construc6 tion-related industries, and over 

7 $35,000,000,000 in Federal, state, and local 

8 tax revenues. 

9 (2) SENSE OF CONGRESS.—It is the sense of 

10 Congress that the neighborhood homes credit (as 

11 added under this section) should be an activity ad12 ministered in a manner which— 

13 (A) is consistent with the Fair Housing 

14 Act of 1968 (42 U.S.C. 3601 et seq.); 

15 (B) empowers residents in eligible commu16 nities; and 

17 (C) revitalizes distressed neighborhoods. 

18 (b) ALLOWANCE OF CREDIT.—Subpart D of part IV 

19 of subchapter A of chapter 1 of the Internal Revenue Code 

20 of 1986, as amended by section 213, is amended by insert21 ing after section 42A the following new section: 

22 ‘‘SEC. 42B. NEIGHBORHOOD HOMES CREDIT. 

23 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec24 tion 38, the neighborhood homes credit determined under 

25 this section for the taxable year is, with respect to each 


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1 qualified residence sold by the taxpayer during such tax2 able year in an affordable sale, the lesser of— 

3 ‘‘(1) an amount equal to— 

4 ‘‘(A) the excess (if any) of— 

5 ‘‘(i) the reasonable development costs 

6 paid or incurred by the taxpayer with re7 spect to such qualified residence, over 

8 ‘‘(ii) the sale price of such qualified 

9 residence (reduced by any reasonable ex10 penses paid or incurred by the taxpayer in 

11 connection with such sale), or 

12 ‘‘(B) if the neighborhood homes credit 

13 agency determines it is necessary to ensure fi14 nancial feasibility, an amount not to exceed 120 

15 percent of the amount under subparagraph (A), 

16 ‘‘(2) 35 percent of the eligible development 

17 costs paid or incurred by the taxpayer with respect 

18 to such qualified residence, or 

19 ‘‘(3) 28 percent of the national median sale 

20 price for new homes (as determined pursuant to the 

21 most recent census data available as of the date on 

22 which the neighborhood homes credit agency makes 

23 an allocation for the qualified project). 

24 ‘‘(b) DEVELOPMENT COSTS.—For purposes of this 

25 section— 


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1 ‘‘(1) REASONABLE DEVELOPMENT COSTS.— 

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

3 development costs’ means amounts paid or in4 curred for the acquisition of buildings and land, 

5 construction, substantial rehabilitation, demoli6 tion of structures, or environmental remedi7 ation, to the extent that the neighborhood 

8 homes credit agency determines that such 

9 amounts meet the standards specified pursuant 

10 to subsection (f)(1)(C) (as of the date on which 

11 construction or substantial rehabilitation is sub12 stantially complete, as determined by such 

13 agency) and are necessary to ensure the finan14 cial feasibility of such qualified residence. 

15 ‘‘(B) CONSIDERATIONS IN MAKING DETER16 MINATION.—In making the determination under 

17 subparagraph (A), the neighborhood homes 

18 credit agency shall consider— 

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

20 the total financing, 

21 ‘‘(ii) any proceeds or receipts gen22 erated or expected to be generated by rea23 son of tax benefits, and 

24 ‘‘(iii) the reasonableness of the devel25 opmental costs and fees. 


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1 ‘‘(2) ELIGIBLE DEVELOPMENT COSTS.—The 

2 term ‘eligible development costs’ means the amount 

3 which would be reasonable development costs if the 

4 amounts taken into account as paid or incurred for 

5 the acquisition of buildings and land did not exceed 

6 75 percent of such costs determined without regard 

7 to any amount paid or incurred for the acquisition 

8 of buildings and land. 

9 ‘‘(3) SUBSTANTIAL REHABILITATION.—The 

10 term ‘substantial rehabilitation’ means amounts paid 

11 or incurred for rehabilitation of a qualified residence 

12 if such amounts exceed the greater of— 

13 ‘‘(A) $20,000, or 

14 ‘‘(B) 20 percent of the amounts paid or in15 curred by the taxpayer for the acquisition of 

16 buildings and land with respect to such quali17 fied residence. 

18 ‘‘(4) CONSTRUCTION AND REHABILITATION

19 ONLY AFTER ALLOCATION TAKEN INTO ACCOUNT.— 

20 ‘‘(A) IN GENERAL.—The terms ‘reasonable 

21 development costs’ and ‘eligible development 

22 costs’ shall not include any amount paid or in23 curred before the date on which an allocation is 

24 made to the taxpayer under subsection (e) with 

25 respect to the qualified project of which the 


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1 qualified residence is part unless such amount 

2 is paid or incurred for the acquisition of build3 ings or land. 

4 ‘‘(B) LAND AND BUILDING ACQUISITION

5 COSTS.—Amounts paid or incurred for the ac6 quisition of buildings or land shall be included 

7 under paragraph (A) only if paid or incurred 

8 not more than 3 years before the date on which 

9 the allocation referred to in subparagraph (A) 

10 is made. If the taxpayer acquired any building 

11 or land from an entity (or any related party to 

12 such entity) that holds an ownership interest in 

13 the taxpayer, then such entity must also have 

14 acquired such property within such 3-year pe15 riod, and the acquisition cost included under 

16 subparagraph (A) with respect to the taxpayer 

17 shall not exceed the amount such entity paid or 

18 incurred to acquire such property. 

19 ‘‘(c) QUALIFIED RESIDENCE.—For purposes of this 

20 section— 

21 ‘‘(1) IN GENERAL.—The term ‘qualified resi22 dence’ means a residence that— 

23 ‘‘(A) is real property affixed on a perma24 nent foundation, 

25 ‘‘(B) is— 


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1 ‘‘(i) a house which is comprised of 4 

2 or fewer residential units, 

3 ‘‘(ii) a condominium unit, or 

4 ‘‘(iii) a house or an apartment owned 

5 by a cooperative housing corporation (as 

6 defined in section 216(b)), 

7 ‘‘(C) is part of a qualified project with re8 spect to which the neighborhood homes credit 

9 agency has made an allocation under subsection 

10 (e), and 

11 ‘‘(D) is located in a qualified census tract 

12 (determined as of the date of such allocation). 

13 ‘‘(2) QUALIFIED CENSUS TRACT.— 

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

15 census tract’ means a census tract— 

16 ‘‘(i) which— 

17 ‘‘(I) has a median family income 

18 which does not exceed 80 percent of 

19 the median family income for the ap20 plicable area, 

21 ‘‘(II) has a poverty rate that is 

22 not less than 130 percent of the pov23 erty rate of the applicable area, and 

24 ‘‘(III) has a median value for 

25 owner-occupied homes that does not 


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1 exceed the median value for owner-oc2 cupied homes in the applicable area, 

3 ‘‘(ii) which— 

4 ‘‘(I) is located in a city which has 

5 a population of not less than 50,000 

6 and such city has a poverty rate that 

7 is not less than 150 percent of the 

8 poverty rate of the applicable area, 

9 ‘‘(II) has a median family income 

10 which does not exceed the median 

11 family income for the applicable area, 

12 and 

13 ‘‘(III) has a median value for 

14 owner-occupied homes that does not 

15 exceed 80 percent of the median value 

16 for owner-occupied homes in the ap17 plicable area, 

18 ‘‘(iii) which— 

19 ‘‘(I) is located in a nonmetropoli20 tan county, 

21 ‘‘(II) has a median family income 

22 which does not exceed the median 

23 family income for the applicable area, 

24 and 


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1 ‘‘(III) has been designated by a 

2 neighborhood homes credit agency 

3 under this clause, or 

4 ‘‘(iv) which is not otherwise a quali5 fied census tract and is located in a dis6 aster area (as defined in section 

7 7508A(d)(3)), but only with respect to 

8 credits allocated in any period during 

9 which the President of the United States 

10 has determined that such area warrants in11 dividual or individual and public assistance 

12 by the Federal Government under the Rob13 ert T. Stafford Disaster Relief and Emer14 gency Assistance Act. 

15 ‘‘(B) APPLICABLE AREA.—The term ‘appli16 cable area’ means— 

17 ‘‘(i) in the case of a metropolitan cen18 sus tract, the metropolitan area in which 

19 such census tract is located, and 

20 ‘‘(ii) in the case of a census tract 

21 other than a census tract described in 

22 clause (i), the State. 

23 ‘‘(d) AFFORDABLE SALE.—For purposes of this sec24 tion— 


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1 ‘‘(1) IN GENERAL.—The term ‘affordable sale’ 

2 means a sale to a qualified homeowner of a qualified 

3 residence that the neighborhood homes credit agency 

4 certifies as meeting the standards promulgated 

5 under subsection (f)(1)(D) for a price that does not 

6 exceed— 

7 ‘‘(A) in the case of any qualified residence 

8 not described in subparagraph (B), (C), or (D), 

9 the amount equal to the product of 4 multiplied 

10 by the median family income for the applicable 

11 area (as determined pursuant to the most re12 cent census data available as of the date of the 

13 contract for such sale), 

14 ‘‘(B) in the case of a house comprised of 

15 2 residential units, 125 percent of the amount 

16 described in subparagraph (A), 

17 ‘‘(C) in the case of a house comprised of 

18 3 residential units, 150 percent of the amount 

19 described in subparagraph (A), or 

20 ‘‘(D) in the case of a house comprised of 

21 4 residential units, 175 percent of the amount 

22 described in subparagraph (A). 

23 ‘‘(2) QUALIFIED HOMEOWNER.—The term 

24 ‘qualified homeowner’ means, with respect to a 

25 qualified residence, an individual— 


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1 ‘‘(A) who owns and uses such qualified res2 idence as the principal residence of such indi3 vidual, and 

4 ‘‘(B) whose family income (determined as 

5 of the date that a binding contract for the af6 fordable sale of such residence is entered into) 

7 is 140 percent or less of the median family in8 come for the applicable area in which the quali9 fied residence is located. 

10 ‘‘(e) CREDIT CEILING AND ALLOCATIONS.— 

11 ‘‘(1) CREDIT LIMITED BASED ON ALLOCATIONS

12 TO QUALIFIED PROJECTS.— 

13 ‘‘(A) IN GENERAL.—The credit allowed 

14 under subsection (a) to any taxpayer for any 

15 taxable year with respect to one or more quali16 fied residences which are part of the same 

17 qualified project shall not exceed the excess (if 

18 any) of— 

19 ‘‘(i) the amount allocated by the 

20 neighborhood homes credit agency under 

21 this paragraph to such taxpayer with re22 spect to such qualified project, over 

23 ‘‘(ii) the aggregate amount of credit 

24 allowed under subsection (a) to such tax25 payer with respect to qualified residences 


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1 which are a part of such qualified project 

2 for all prior taxable years. 

3 ‘‘(B) DEADLINE FOR COMPLETION.—No 

4 credit shall be allowed under subsection (a) 

5 with respect to any qualified residence unless 

6 the affordable sale of such residence is during 

7 the 5-year period beginning on the date of the 

8 allocation to the qualified project of which such 

9 residence is a part (or, in the case of a qualified 

10 residence to which subsection (i) applies, the re11 habilitation of such residence is completed dur12 ing such 5-year period). 

13 ‘‘(2) LIMITATIONS ON ALLOCATIONS TO QUALI14 FIED PROJECTS.— 

15 ‘‘(A) ALLOCATIONS LIMITED BY STATE

16 NEIGHBORHOOD HOMES CREDIT CEILING.—The 

17 aggregate amount allocated to taxpayers with 

18 respect to qualified projects by the neighbor19 hood homes credit agency of any State for any 

20 calendar year shall not exceed the State neigh21 borhood homes credit amount of such State for 

22 such calendar year. 

23 ‘‘(B) SET-ASIDE FOR CERTAIN PROJECTS

24 INVOLVING QUALIFIED NONPROFIT ORGANIZA25 TIONS.—Rules similar to the rules of section 


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1 42(h)(5) shall apply for purposes of this sec2 tion. 

3 ‘‘(3) DETERMINATION OF STATE NEIGHBOR4 HOOD HOMES CREDIT CEILING.— 

5 ‘‘(A) IN GENERAL.—The State neighbor6 hood homes credit amount for a State for a cal7 endar year is an amount equal to the sum of— 

8 ‘‘(i) the greater of— 

9 ‘‘(I) the product of $7, multiplied 

10 by the State population (determined 

11 in accordance with section 146(j)), or 

12 ‘‘(II) $9,000,000, and 

13 ‘‘(ii) any amount previously allocated 

14 to any taxpayer with respect to any quali15 fied project by the neighborhood homes 

16 credit agency of such State which can no 

17 longer be allocated to any qualified resi18 dence because the 5-year period described 

19 in paragraph (1)(B) expires during cal20 endar year. 

21 ‘‘(B) 3-YEAR CARRYFORWARD OF UNUSED

22 LIMITATION.—The State neighborhood homes 

23 credit amount for a State for a calendar year 

24 shall be increased by the excess (if any) of the 

25 State neighborhood homes credit amount for 


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1 such State for the preceding calendar year over 

2 the aggregate amount allocated by the neigh3 borhood homes credit agency of such State dur4 ing such preceding calendar year. Any amount 

5 carried forward under the preceding sentence 

6 shall not be carried past the third calendar year 

7 after the calendar year in which such credit 

8 amount originally arose, determined on a first9 in, first-out basis. 

10 ‘‘(f) RESPONSIBILITIES OF NEIGHBORHOOD HOMES

11 CREDIT AGENCIES.— 

12 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

13 (e), the State neighborhood homes credit dollar 

14 amount shall be zero for a calendar year unless the 

15 neighborhood homes credit agency of the State— 

16 ‘‘(A) allocates such amount pursuant to a 

17 qualified allocation plan of the neighborhood 

18 homes credit agency, 

19 ‘‘(B) allocates not more than 20 percent of 

20 amounts allocated in the previous year (or for 

21 allocations made in 2024, not more than 20 

22 percent of the neighborhood homes credit ceil23 ing for such year) to projects with respect to 

24 qualified residences which— 


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1 ‘‘(i) are located in census tracts de2 scribed in subsection (c)(2)(A)(iii), 

3 (c)(2)(A)(iv), (i)(5), or 

4 ‘‘(ii) are not located in a qualified 

5 census tract but meet the requirements of 

6 subsection (i)(8), 

7 ‘‘(C) promulgates standards with respect 

8 to reasonable qualified development costs and 

9 fees, 

10 ‘‘(D) promulgates standards with respect 

11 to construction quality, 

12 ‘‘(E) in the case of any neighborhood 

13 homes credit agency which makes an allocation 

14 to a qualified project which includes any quali15 fied residence to which subsection (i) applies, 

16 promulgates standards with respect to pro17 tecting the owners of such residences, including 

18 the capacity of such owners to pay rehabilita19 tion costs not covered by the credit provided by 

20 this section and providing for the disclosure to 

21 such owners of their rights and responsibilities 

22 with respect to the rehabilitation of such resi23 dences, 


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1 ‘‘(F) submits to the Secretary (at such 

2 time and in such manner as the Secretary may 

3 prescribe) an annual report specifying— 

4 ‘‘(i) the amount of the neighborhood 

5 homes credits allocated to each qualified 

6 project for the previous year, 

7 ‘‘(ii) with respect to each qualified 

8 residence completed in the preceding cal9 endar year— 

10 ‘‘(I) the census tract in which 

11 such qualified residence is located, 

12 ‘‘(II) with respect to the qualified 

13 project that includes such qualified 

14 residence, the year in which such 

15 project received an allocation under 

16 this section, 

17 ‘‘(III) whether such qualified res18 idence was new, substantially rehabili19 tated and sold to a qualified home20 owner, or substantially rehabilitated 

21 pursuant to subsection (i), 

22 ‘‘(IV) the eligible development 

23 costs of such qualified residence, 


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1 ‘‘(V) the amount of the neighbor2 hood homes credit with respect to 

3 such qualified residence, 

4 ‘‘(VI) the sales price of such 

5 qualified residence, if applicable, and 

6 ‘‘(VII) the family income of the 

7 qualified homeowner (expressed as a 

8 percentage of the applicable area me9 dian family income for the location of 

10 the qualified residence), and 

11 ‘‘(iii) such other information as the 

12 Secretary may require, and 

13 ‘‘(G) makes available to the general public 

14 a written explanation for any allocation of a 

15 neighborhood homes credit dollar amount which 

16 is not made in accordance with established pri17 orities and selection criteria of the neighbor18 hood homes credit agency. 

19 Subparagraph (B) shall be applied by substituting 

20 ‘40 percent’ for ‘20 percent’ each place it appears in 

21 the case of any State in which at least 45 percent 

22 of the State population resides outside metropolitan 

23 statistical areas (within the meaning of section 

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1 sus tracts located in the State are described in sub2 section (c)(2)(A)(i). 

3 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur4 poses of this subsection, the term ‘qualified alloca5 tion plan’ means any plan which— 

6 ‘‘(A) sets forth the selection criteria to be 

7 used to prioritize qualified projects for alloca8 tions of State neighborhood homes credit dollar 

9 amounts, including— 

10 ‘‘(i) the need for new or substantially 

11 rehabilitated owner-occupied homes in the 

12 area addressed by the project, 

13 ‘‘(ii) the expected contribution of the 

14 project to neighborhood stability and revi15 talization, including the impact on neigh16 borhood residents, 

17 ‘‘(iii) the capability and prior perform18 ance of the project sponsor, and 

19 ‘‘(iv) the likelihood the project will re20 sult in long-term homeownership, 

21 ‘‘(B) has been made available for public 

22 comment, and 

23 ‘‘(C) provides a procedure that the neigh24 borhood homes credit agency (or any agent or 


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1 contractor of such agency) shall follow for pur2 poses of— 

3 ‘‘(i) identifying noncompliance with 

4 any provisions of this section, and 

5 ‘‘(ii) notifying the Internal Revenue 

6 Service of any such noncompliance of 

7 which the agency becomes aware. 

8 ‘‘(g) REPAYMENT.— 

9 ‘‘(1) IN GENERAL.— 

10 ‘‘(A) SOLD DURING 5-YEAR PERIOD.—If a 

11 qualified residence is sold during the 5-year pe12 riod beginning immediately after the affordable 

13 sale of such qualified residence referred to in 

14 subsection (a), the seller shall transfer an 

15 amount equal to the repayment amount to the 

16 relevant neighborhood homes credit agency. 

17 ‘‘(B) USE OF REPAYMENTS.—A neighbor18 hood homes credit agency shall use any amount 

19 received pursuant to subparagraph (A) only for 

20 purposes of qualified projects. 

21 ‘‘(2) REPAYMENT AMOUNT.—For purposes of 

22 paragraph (1)(A)— 

23 ‘‘(A) IN GENERAL.—The repayment 

24 amount is an amount equal to the applicable 


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1 percentage of the gain from the sale to which 

2 the repayment relates. 

3 ‘‘(B) APPLICABLE PERCENTAGE.—For 

4 purposes of subparagraph (A), the applicable 

5 percentage is 50 percent, reduced by 10 per6 centage points for each year of the 5-year pe7 riod referred to in paragraph (1)(A) which ends 

8 before the date of such sale. 

9 ‘‘(3) LIEN FOR REPAYMENT AMOUNT.—A 

10 neighborhood homes credit agency receiving an allo11 cation under this section shall place a lien on each 

12 qualified residence that is built or rehabilitated as 

13 part of a qualified project for an amount such agen14 cy deems necessary to ensure potential repayment 

15 pursuant to paragraph (1)(A). 

16 ‘‘(4) WAIVER.— 

17 ‘‘(A) IN GENERAL.—The neighborhood 

18 homes credit agency may waive the repayment 

19 required under paragraph (1)(A) if the agency 

20 determines that making a repayment would 

21 constitute a hardship to the seller. 

22 ‘‘(B) HARDSHIP.—For purposes of sub23 paragraph (A), with respect to the seller, a 

24 hardship may include— 

25 ‘‘(i) divorce, 


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1 ‘‘(ii) disability, 

2 ‘‘(iii) illness, or 

3 ‘‘(iv) any other hardship identified by 

4 the neighborhood homes credit agency for 

5 purposes of this paragraph. 

6 ‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 

7 For purposes of this section— 

8 ‘‘(1) NEIGHBORHOOD HOMES CREDIT AGEN9 CY.—The term ‘neighborhood homes credit agency’ 

10 means the agency designated by the governor of a 

11 State as the neighborhood homes credit agency of 

12 the State. 

13 ‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 

14 project’ means a project that a neighborhood homes 

15 credit agency certifies will build or substantially re16 habilitate one or more qualified residences. 

17 ‘‘(3) DETERMINATIONS OF FAMILY INCOME.— 

18 Rules similar to the rules of section 143(f)(2) shall 

19 apply for purposes of this section. 

20 ‘‘(4) POSSESSIONS TREATED AS STATES.—The 

21 term ‘State’ includes the District of Columbia and 

22 the possessions of the United States. 

23 ‘‘(5) SPECIAL RULES RELATED TO CONDOMIN24 IUMS AND COOPERATIVE HOUSING CORPORATIONS.— 


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1 ‘‘(A) DETERMINATION OF DEVELOPMENT

2 COSTS.—In the case of a qualified residence de3 scribed in clause (ii) or (iii) of subsection 

4 (c)(1)(A), the reasonable development costs and 

5 eligible development costs of such qualified resi6 dence shall be an amount equal to such costs, 

7 respectively, of the entire condominium or coop8 erative housing property in which such qualified 

9 residence is located, multiplied by a fraction— 

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

11 total floor space of such qualified resi12 dence, and 

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

14 total floor space of all residences within 

15 such property. 

16 ‘‘(B) TENANT-STOCKHOLDERS OF COOPER17 ATIVE HOUSING CORPORATIONS TREATED AS

18 OWNERS.—In the case of a cooperative housing 

19 corporation (as such term is defined in section 

20 216(b)), a tenant-stockholder shall be treated 

21 as owning the house or apartment which such 

22 person is entitled to occupy. 

23 ‘‘(6) RELATED PARTY SALES NOT TREATED AS

24 AFFORDABLE SALES.— 


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1 ‘‘(A) IN GENERAL.—A sale between related 

2 persons shall not be treated as an affordable 

3 sale. 

4 ‘‘(B) RELATED PERSONS.—For purposes 

5 of this paragraph, a person (in this subpara6 graph referred to as the ‘related person’) is re7 lated to any person if the related person bears 

8 a relationship to such person specified in sec9 tion 267(b) or 707(b)(1), or the related person 

10 and such person are engaged in trades or busi11 nesses under common control (within the mean12 ing of subsections (a) and (b) of section 52). 

13 For purposes of the preceding sentence, in ap14 plying section 267(b) or 707(b)(1), ‘10 percent’ 

15 shall be substituted for ‘50 percent’. 

16 ‘‘(7) INFLATION ADJUSTMENT.— 

17 ‘‘(A) IN GENERAL.—In the case of a cal18 endar year after 2023, the dollar amounts in 

19 subsections (b)(3)(A), (e)(3)(A)(i)(I), 

20 (e)(3)(A)(i)(II), and (i)(2)(C) shall each be in21 creased by an amount equal to— 

22 ‘‘(i) such dollar amount, multiplied by 

23 ‘‘(ii) the cost-of-living adjustment de24 termined under section 1(f)(3) for such 

25 calendar year by substituting ‘calendar 


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1 year 2022’ for ‘calendar year 2016’ in sub2 paragraph (A)(ii) thereof. 

3 ‘‘(B) ROUNDING.— 

4 ‘‘(i) In the case of the dollar amounts 

5 in subsections (b)(3)(A) and (i)(2)(C), any 

6 increase under paragraph (1) which is not 

7 a multiple of $1,000 shall be rounded to 

8 the nearest multiple of $1,000. 

9 ‘‘(ii) In the case of the dollar amount 

10 in subsection (e)(3)(A)(i)(I), any increase 

11 under paragraph (1) which is not a mul12 tiple of $0.01 shall be rounded to the near13 est multiple of $0.01. 

14 ‘‘(iii) In the case of the dollar amount 

15 in subsection (e)(3)(A)(i)(II), any increase 

16 under paragraph (1) which is not a mul17 tiple of $100,000 shall be rounded to the 

18 nearest multiple of $100,000. 

19 ‘‘(8) REPORT.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 annually issue a report, to be made available to 

22 the public, which contains the information sub23 mitted pursuant to subsection (f)(1)(F). 

24 ‘‘(B) DE-IDENTIFICATION.—The Secretary 

25 shall ensure that any information made public 


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1 pursuant to subparagraph (A) excludes any in2 formation that would allow for the identification 

3 of qualified homeowners. 

4 ‘‘(9) LIST OF QUALIFIED CENSUS TRACTS.— 

5 The Secretary of Housing and Urban Development 

6 shall, for each year, make publicly available a list of 

7 qualified census tracts under— 

8 ‘‘(A) on a combined basis, clauses (i) and 

9 (ii) of subsection (c)(2)(A), 

10 ‘‘(B) clause (iii) of such subsection, and 

11 ‘‘(C) subsection (i)(5)(A). 

12 ‘‘(10) DENIAL OF DEDUCTIONS IF CONVERTED

13 TO RENTAL HOUSING.—If, during the 5-year period 

14 beginning immediately after the affordable sale of a 

15 qualified residence referred to in subsection (a), an 

16 individual who owns a qualified residence (whether 

17 or not such individual was the purchaser in such af18 fordable sale) fails to use such qualified residence as 

19 such individual’s principal residence for any period 

20 of time, no deduction shall be allowed for expenses 

21 paid or incurred by such individual with respect to 

22 renting, during such period of time, such qualified 

23 residence. 

24 ‘‘(i) APPLICATION OF CREDIT WITH RESPECT TO

25 OWNER-OCCUPIED REHABILITATIONS.— 


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1 ‘‘(1) IN GENERAL.—In the case of a qualified 

2 rehabilitation by the taxpayer of any qualified resi3 dence which is owned (as of the date that the writ4 ten binding contract referred to in paragraph (3) is 

5 entered into) by a specified homeowner, the rules of 

6 paragraphs (2) through (7) shall apply. 

7 ‘‘(2) ALTERNATIVE CREDIT DETERMINATION.— 

8 In the case of any qualified residence described in 

9 paragraph (1), the neighborhood homes credit deter10 mined under subsection (a) with respect to such res11 idence shall (in lieu of any credit otherwise deter12 mined under subsection (a) with respect to such res13 idence) be allowed in the taxable year during which 

14 the qualified rehabilitation is completed (as deter15 mined by the neighborhood homes credit agency) 

16 and shall be equal to the least of— 

17 ‘‘(A) the excess (if any) of— 

18 ‘‘(i) the amounts paid or incurred by 

19 the taxpayer for the qualified rehabilitation 

20 of the qualified residence to the extent that 

21 such amounts are certified by the neigh22 borhood homes credit agency (at the time 

23 of the completion of such rehabilitation) as 

24 meeting the standards specified pursuant 

25 to subsection (f)(1)(C), over 


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1 ‘‘(ii) any amounts paid to such tax2 payer for such rehabilitation, 

3 ‘‘(B) 50 percent of the amounts described 

4 in subparagraph (A)(i), or 

5 ‘‘(C) $50,000. 

6 ‘‘(3) QUALIFIED REHABILITATION.— 

7 ‘‘(A) IN GENERAL.—For purposes of this 

8 subsection, the term ‘qualified rehabilitation’ 

9 means a rehabilitation or reconstruction per10 formed pursuant to a written binding contract 

11 between the taxpayer and the specified home12 owner if the amount paid or incurred by the 

13 taxpayer in the performance of such rehabilita14 tion or reconstruction exceeds the dollar 

15 amount in effect under subsection (b)(3)(A). 

16 ‘‘(B) APPLICATION OF LIMITATION TO EX17 PENSES PAID OR INCURRED AFTER ALLOCA18 TION.—A rule similar to the rule of section 

19 (b)(4) shall apply for purposes of this sub20 section. 

21 ‘‘(4) SPECIFIED HOMEOWNER.—For purposes 

22 of this subsection, the term ‘qualified homeowner’ 

23 means, with respect to a qualified residence, an indi24 vidual— 


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1 ‘‘(A) who owns and uses such qualified res2 idence as the principal residence of such indi3 vidual as of the date that the written binding 

4 contract referred to in paragraph (3) is entered 

5 into, and 

6 ‘‘(B) whose family income (determined as 

7 of such date) does not exceed the median family 

8 income for the applicable area (with respect to 

9 the census tract in which the qualified residence 

10 is located). 

11 ‘‘(5) ADDITIONAL CENSUS TRACTS IN WHICH

12 OWNER-OCCUPIED RESIDENCES MAY BE LOCATED.— 

13 In the case of any qualified residence described in 

14 paragraph (1), the term ‘qualified census tract’ in15 cludes any census tract which— 

16 ‘‘(A) meets the requirements of subsection 

17 (c)(2)(A)(i) without regard to subclause (III) 

18 thereof, and 

19 ‘‘(B) is designated by the neighborhood 

20 homes credit agency for purposes of this para21 graph. 

22 ‘‘(6) MODIFICATION OF REPAYMENT REQUIRE23 MENT.—In the case of any qualified residence de24 scribed in paragraph (1), subsection (g) shall be ap25 plied by beginning the 5-year period otherwise deVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 scribed therein on the date on which the qualified 

2 homeowner acquired such residence. 

3 ‘‘(7) RELATED PARTIES.—Paragraph (1) shall 

4 not apply if the taxpayer is the owner of the quali5 fied residence described in paragraph (1) or is re6 lated (within the meaning of subsection (h)(6)(B)) 

7 to such owner. 

8 ‘‘(8) PYRRHOTITE REMEDIATION.—The require9 ment of subsection (c)(1)(C) shall not apply to a 

10 qualified rehabilitation under this subsection of a 

11 qualified residence that is documented by an engi12 neer’s report and core testing to have a foundation 

13 that is adversely impacted by pyrrhotite or other 

14 iron sulfide minerals. 

15 ‘‘(j) REGULATIONS.—The Secretary shall prescribe 

16 such regulations as may be necessary or appropriate to 

17 carry out the purposes of this section, including regula18 tions that prevent avoidance of the rules, and abuse of 

19 the purposes, of this section.’’. 

20 (c) CREDIT ALLOWED AS PART OF GENERAL BUSI21 NESS CREDIT.—Section 38(b) of the Internal Revenue 

22 Code of 1986, as amended by section 213, is amended by 

23 striking ‘‘plus’’ at the end of paragraph (41), by striking 

24 the period at the end of paragraph (42) and inserting ‘‘, 


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1 plus’’, and by adding at the end the following new para2 graph: 

3 ‘‘(43) the neighborhood homes credit deter4 mined under section 42B(a).’’. 

5 (d) CREDIT ALLOWED AGAINST ALTERNATIVE MIN6 IMUM TAX.—Section 38(c)(4)(B) of the Internal Revenue 

7 Code of 1986 is amended by redesignating clauses (iv) 

8 through (xii) as clauses (v) through (xiii), respectively, and 

9 by inserting after clause (iii) the following new clause: 

10 ‘‘(iv) the credit determined under sec11 tion 42B,’’. 

12 (e) BASIS ADJUSTMENTS.— 

13 (1) ENERGY EFFICIENT HOME IMPROVEMENT

14 CREDIT.—Section 25C(g) of the Internal Revenue 

15 Code of 1986 is amended by adding after the first 

16 sentence the following new sentence: ‘‘This sub17 section shall not apply for purposes of determining 

18 the eligible development costs or adjusted basis of 

19 any building under section 42B.’’. 

20 (2) RESIDENTIAL CLEAN ENERGY CREDIT.— 

21 Section 25D(f) of such Code is amended by adding 

22 after the first sentence the following new sentence: 

23 ‘‘This subsection shall not apply for purposes of de24 termining the eligible development costs or adjusted 

25 basis of any building under section 42B.’’. 


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1 (3) NEW ENERGY EFFICIENT HOME CREDIT.— 

2 Section 45L(e) of such Code is amended by inserting 

3 ‘‘or for purposes of determining the eligible develop4 ment costs or adjusted basis of any building under 

5 section 42B’’ after ‘‘section 42’’. 

6 (f) EXCLUSION FROM GROSS INCOME.—Part III of 

7 subchapter B of chapter 1 of the Internal Revenue Code 

8 of 1986 is amended by inserting before section 140 the 

9 following new section: 

10 ‘‘SEC. 139J. STATE ENERGY SUBSIDIES FOR QUALIFIED 

11 RESIDENCES. 

12 ‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in13 come shall not include the value of any subsidy provided 

14 to a taxpayer (whether directly or indirectly) by any State 

15 energy office (as defined in section 124(a) of the Energy 

16 Policy Act of 2005 (42 U.S.C. 15821(a))) for purposes 

17 of any energy improvements made to a qualified residence 

18 (as defined in section 42B(c)(1)).’’. 

19 (g) CONFORMING AMENDMENTS.— 

20 (1) Subsections (i)(3)(C), (i)(6)(B)(i), and 

21 (k)(1) of section 469 of the Internal Revenue Code 

22 of 1986, as amended by section 213, are each 

23 amended by striking ‘‘or 42A’’ and inserting ‘‘, 42A, 

24 or 42B’’. 


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1 (2) The table of sections for subpart D of part 

2 IV of subchapter A of chapter 1 of such Code, as 

3 amended by section 213, is amended by inserting 

4 after the item relating to section 42A the following 

5 new item: 

‘‘Sec. 42B. Neighborhood homes credit.’’. 

6 (3) The table of sections for part III of sub7 chapter B of chapter 1 of such Code is amended by 

8 inserting before the item relating to section 140 the 

9 following new item: 

‘‘Sec. 139J. State energy subsidies for qualified residences.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2023. 

13 SEC. 215. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

14 (a) IN GENERAL.—Section 36 of the Internal Rev15 enue Code of 1986 is amended to read as follows: 

16 ‘‘SEC. 36. FIRST-TIME HOMEBUYER REFUNDABLE CREDIT. 

17 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in18 dividual who is a first-time homebuyer of a principal resi19 dence in the United States during a taxable year, there 

20 shall be allowed as a credit against the tax imposed by 

21 this subtitle for such taxable year an amount equal to 20 

22 percent of the purchase price of the residence. 

23 ‘‘(b) LIMITATIONS; SPECIAL RULES BASED ON MAR24 ITAL AND FILING STATUS.— 


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1 ‘‘(1) DOLLAR LIMITATION.—The credit allowed 

2 under subsection (a) shall not exceed $15,000. 

3 ‘‘(2) LIMITATION BASED ON PURCHASE

4 PRICE.—The amount allowable as a credit under 

5 subsection (a) (determined without regard to this 

6 paragraph and paragraph (3), and after the applica7 tion of paragraph (1)) for the taxable year shall be 

8 reduced (but not below zero) by the amount which 

9 bears the same ratio to the amount which is so al10 lowable as— 

11 ‘‘(A) the excess (if any) of— 

12 ‘‘(i) the purchase price of the resi13 dence, over 

14 ‘‘(ii) an amount equal to 110 percent 

15 of the conforming loan limit applicable to 

16 the residence, bears to 

17 ‘‘(B) $100,000. 

18 For purposes of the preceding sentence, the term 

19 ‘conforming loan limit’ with respect to any residence 

20 means the applicable limitation governing the max21 imum original principal obligation for a mortgage se22 cured by a residence of the same type, as determined 

23 and adjusted annually under section 302(b)(2) of 

24 the Federal National Mortgage Association Charter 


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1 Act and section 305(a)(2) of the Federal Home 

2 Loan Mortgage Corporation Act. 

3 ‘‘(3) LIMITATION BASED ON MODIFIED AD4 JUSTED GROSS INCOME.— 

5 ‘‘(A) IN GENERAL.—The amount allowable 

6 as a credit under subsection (a) (determined 

7 without regard to this paragraph and after the 

8 application of paragraphs (1) and (2)) for the 

9 taxable year shall be reduced (but not below 

10 zero) by the amount which bears the same ratio 

11 to the amount which is so allowable as— 

12 ‘‘(i) the excess (if any) of— 

13 ‘‘(I) the taxpayer’s modified ad14 justed gross income for the preceding 

15 taxable year, over 

16 ‘‘(II) the applicable threshold, 

17 bears to 

18 ‘‘(ii) $50,000. 

19 ‘‘(B) MODIFIED ADJUSTED GROSS IN20 COME.—For purposes of subparagraph (A), the 

21 term ‘modified adjusted gross income’ with re22 spect to any taxable year means the adjusted 

23 gross income of the taxpayer for such taxable 

24 year increased by any amount excluded from 


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1 gross income under section 911, 931, or 933 

2 for such taxable year. 

3 ‘‘(C) APPLICABLE THRESHOLD.—For pur4 poses of subparagraph (A), the applicable 

5 threshold is— 

6 ‘‘(i) except as provided in clauses (ii) 

7 and (iii), $100,000, 

8 ‘‘(ii) an amount equal to 150 percent 

9 of the amount in effect under clause (i), in 

10 the case of a head of household (as defined 

11 in section 2(b)), and 

12 ‘‘(iii) an amount equal to 200 percent 

13 of the amount in effect under clause (i), in 

14 the case of a joint return. 

15 ‘‘(4) ADDITIONAL LIMITATIONS.—No credit 

16 shall be allowed under subsection (a) with respect to 

17 the purchase of any residence for a taxable year— 

18 ‘‘(A) if the taxpayer is a nonresident alien, 

19 or 

20 ‘‘(B) if— 

21 ‘‘(i) the taxpayer has not attained age 

22 18 as of the date of such purchase, or 

23 ‘‘(ii) a deduction under section 151 

24 with respect to the taxpayer is allowable to 

25 another taxpayer for the taxable year. 


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1 In the case of a taxpayer who is married, the tax2 payer shall be treated as meeting the age require3 ment of subparagraph (B)(i) if the taxpayer or the 

4 taxpayer’s spouse meets such age requirement. 

5 ‘‘(5) MULTIPLE PURCHASERS.—If 2 or more in6 dividuals who are not married purchase a principal 

7 residence, the amount of the credit under subsection 

8 (a) shall be allocated among such individuals in such 

9 manner as the Secretary may prescribe by taking 

10 into account the requirements of paragraphs (2) and 

11 (3), except that the total amount of the credits al12 lowed to all such individuals shall not exceed the 

13 limitation under paragraph (1) (as modified by para14 graph (7)). 

15 ‘‘(6) MARRIED COUPLES MUST FILE JOINT RE16 TURN.—If an individual is married at the close of 

17 the taxable year, the credit shall be allowed under 

18 subsection (a) only if the individual and the individ19 ual’s spouse file a joint return for the taxable year. 

20 ‘‘(7) ADJUSTMENT FOR INFLATION.—In the 

21 case of any taxable year beginning after December 

22 31, 2024, each of the dollar amounts in paragraphs 

23 (1), (2)(A)(ii), and (3)(C)(i) shall be increased by an 

24 amount equal to— 

25 ‘‘(A) such dollar amount, multiplied by 


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1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for the calendar 

3 year in which the taxable year begins, deter4 mined by substituting ‘calendar year 2023’ for 

5 ‘calendar year 2016’ in subparagraph (A)(ii) 

6 thereof. 

7 Any increase determined under the preceding sen8 tence shall be rounded to the next lowest multiple of 

9 $50. 

10 ‘‘(c) DEFINITIONS.—For purposes of this section— 

11 ‘‘(1) FIRST-TIME HOMEBUYER.— 

12 ‘‘(A) IN GENERAL.—The term ‘first-time 

13 homebuyer’ means any individual who acquires 

14 a principal residence located in the United 

15 States by purchase if such individual (and, if 

16 married, such individual’s spouse)— 

17 ‘‘(i) has not claimed any credit or de18 duction under this title for any previous 

19 taxable year with respect to the purchase 

20 or ownership of any residence or residen21 tial real estate (including for any expendi22 tures relating to the placing in service of 

23 any property on, in connection with, or for 

24 use in such a residence or real estate), and 


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1 ‘‘(ii) attests under penalty of perjury 

2 that— 

3 ‘‘(I) the individual (and, if mar4 ried, the individual’s spouse) has not 

5 owned a principal residence at any 

6 time prior to the purchase of the prin7 cipal residence to which this section 

8 applies, and 

9 ‘‘(II) the principal residence to 

10 which this section applies was not ac11 quired from a person related to such 

12 individual or spouse. 

13 ‘‘(B) WAIVER IN CASE OF CERTAIN

14 CHANGES IN STATUS.—The Secretary may, in 

15 such manner as the Secretary may prescribe, 

16 waive the requirements of subparagraph (A) for 

17 a taxable year in the case of an individual who 

18 is not eligible to file a joint return for the tax19 able year, and who was married at the time the 

20 individual or the individual’s former spouse pur21 chased a previous residence. 

22 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin23 cipal residence’ has the same meaning as when used 

24 in section 121. 

25 ‘‘(3) PURCHASE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

2 means any acquisition, but only if— 

3 ‘‘(i) the property is not acquired from 

4 a person related to the person acquiring 

5 such property (or, if either such person is 

6 married, such individual’s spouse), and 

7 ‘‘(ii) the basis of the property in the 

8 hands of the person acquiring such prop9 erty is not determined— 

10 ‘‘(I) in whole or in part by ref11 erence to the adjusted basis of such 

12 property in the hands of the person 

13 from whom acquired, or 

14 ‘‘(II) under section 1014(a). 

15 ‘‘(B) CONSTRUCTION.—A residence which 

16 is constructed by the taxpayer shall be treated 

17 as purchased by the taxpayer on the date the 

18 taxpayer first occupies such residence. 

19 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

20 price’ means the adjusted basis (without regard to 

21 any reduction under section 1016(a)(38)) of the 

22 principal residence on the date such residence is pur23 chased. 

24 ‘‘(5) RELATED PERSONS.—A person shall be 

25 treated as related to another person if the relationVerDate Sep 11 2014 21:51 Jan 13, 2024 Jkt 049200 PO 00000 Frm 00256 Fmt 6652 Sfmt 6201 E:\BILLS\H6970.IH H6970

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1 ship between such persons would result in the dis2 allowance of losses under section 267 or 707(b) (but, 

3 in applying subsections (b) and (c) of section 267 

4 for purposes of this section, paragraph (4) of section 

5 267(c) shall be treated as providing that the family 

6 of an individual shall include only the individual’s 

7 spouse, ancestors, lineal descendants, and spouse’s 

8 ancestors and lineal descendants). 

9 ‘‘(6) MARITAL STATUS.—An individual’s mar10 ital status shall be determined in accordance with 

11 section 7703. 

12 ‘‘(d) DENIAL AND RECAPTURE RULES IN CASE OF

13 DISPOSAL OF RESIDENCE WITHIN 6 TAXABLE YEARS.— 

14 ‘‘(1) DENIAL OF CREDIT IN CASE OF DISPOSAL

15 WITHIN TAXABLE YEAR.—No credit under sub16 section (a) shall be allowed to any taxpayer for any 

17 taxable year with respect to the purchase of a resi18 dence if the taxpayer disposes of such residence (or 

19 such residence ceases to be the principal residence of 

20 the taxpayer (and, if married, the taxpayer’s 

21 spouse)) before the close of such taxable year. 

22 ‘‘(2) PHASED-OUT RECAPTURE.— 

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

24 subparagraph (D), if the taxpayer disposes of 

25 the residence with respect to which a credit was 


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1 allowed under subsection (a) (or such residence 

2 ceases to be the principal residence of the tax3 payer (and, if married, the taxpayer’s spouse)) 

4 during the 5-taxable-year period beginning with 

5 the taxable year immediately following the cred6 it year, the tax imposed by this chapter for the 

7 taxable year in which such disposal (or ces8 sation) occurs shall be increased by an amount 

9 equal to the recapture percentage of the 

10 amount of the credit so allowed. 

11 ‘‘(B) CREDIT YEAR.—For purposes of sub12 paragraph (A), the term ‘credit year’ means the 

13 taxable year in which the credit under sub14 section (a) was allowed. 

15 ‘‘(C) RECAPTURE PERCENTAGE.—For pur16 poses of subparagraph (A), the recapture per17 centage with respect to any disposal or ces18 sation described in such subparagraph shall be 

19 determined in accordance with the following 

20 table: 

‘‘If the disposal or The recapture 

cessation occurs in: percentage is: 

The 1st taxable year beginning after the credit year ....... 100 percent

The 2nd taxable year beginning after the credit year ...... 80 percent

The 3rd taxable year beginning after the credit year ....... 60 percent

The 4th taxable year beginning after the credit year ....... 40 percent

The 5th taxable year beginning after the credit year ....... 20 percent. 

21 ‘‘(D) EXCEPTIONS.—This paragraph shall 

22 not apply in the case of a disposal or cessation 


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1 described in subparagraph (A) which occurs 

2 after or incident to any of the following: 

3 ‘‘(i) Death of the taxpayer or the tax4 payer’s spouse. 

5 ‘‘(ii) Divorce of the taxpayer. 

6 ‘‘(iii) Involuntary conversion of the 

7 residence (within the meaning of section 

8 121(d)(5)(A)). 

9 ‘‘(iv) Relocation of duty station or 

10 qualified official extended duty (as defined 

11 in section 121(d)(9)(C)) of the taxpayer or 

12 the taxpayer’s spouse who is a member of 

13 the uniformed services (as defined in sec14 tion 121(d)(9)(C)(ii)), a member of the 

15 Foreign Service of the United States (as 

16 defined in section 121(d)(9)(C)(iii)), or an 

17 employee of the intelligence community (as 

18 defined in section 121(d)(9)(C)(iv)). 

19 ‘‘(v) Change of employment of the 

20 taxpayer or the taxpayer’s spouse which 

21 meets the conditions of section 217(c). 

22 ‘‘(vi) Loss of employment, health con23 ditions, or such other unforeseen cir24 cumstances as may be specified by the Sec25 retary. 


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1 ‘‘(e) ADJUSTMENT TO BASIS.—For purposes of this 

2 subtitle, if a credit is allowed under this section with re3 spect to any property, the taxpayer’s basis in such prop4 erty shall be reduced by the amount of the credit so al5 lowed. 

6 ‘‘(f) REPORTING.— 

7 ‘‘(1) IN GENERAL.—A credit shall be allowed 

8 under this section only if the following are included 

9 on the return of tax: 

10 ‘‘(A) The individual’s (and, if married, the 

11 individual’s spouse’s) social security number 

12 issued by the Social Security Administration. 

13 ‘‘(B) The street address (not including a 

14 post office box) of the principal residence pur15 chased. 

16 ‘‘(C) The purchase price of the principal 

17 residence. 

18 ‘‘(D) The date of purchase of the principal 

19 residence. 

20 ‘‘(E) The closing disclosure relating to the 

21 purchase (in the case of a purchase financed by 

22 a mortgage). 

23 ‘‘(2) REPORTING OF REAL ESTATE TRANS24 ACTIONS.—If the Secretary requires information re25 porting under section 6045 by a person described in 


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1 subsection (e)(2) thereof to verify the eligibility of 

2 taxpayers for the credit allowable by this section, the 

3 exception provided by section 6045(e)(5) shall not 

4 apply.’’. 

5 (b) CONFORMING AMENDMENT RELATING TO BASIS

6 ADJUSTMENT.—Subsection (a) of section 1016 of the In7 ternal Revenue Code of 1986, as amended by section 213, 

8 is further amended— 

9 (1) by redesignating paragraphs (38) and (39) 

10 as paragraphs (39) and (40), respectively; and 

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

13 ‘‘(38) to the extent provided in section 36(e).’’. 

14 (c) CONFORMING AMENDMENT.—Section 26(b)(2) of 

15 the Internal Revenue Code of 1986 is amended by striking 

16 subparagraph (W) and by redesignating subparagraphs 

17 (X), (Y), and (Z) as subparagraphs (W), (X), and (Y), 

18 respectively. 

19 (d) CLERICAL AMENDMENT.—The item relating to 

20 section 36 in the table of sections for subpart C of part 

21 IV of subchapter A of chapter 1 of the Internal Revenue 

22 Code of 1986 is amended to read as follows: 

‘‘Sec. 36. First-time homebuyer refundable credit.’’. 

23 (e) AUTHORITY TO TREAT CLAIM OF CREDIT AS

24 ERROR, ETC.—Subparagraph (N) of section 6213(g)(2) of 


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1 the Internal Revenue Code of 1986 is amended to read 

2 as follows: 

3 ‘‘(N) in the case of a return claiming the 

4 credit under section 36— 

5 ‘‘(i) the omission of a social security 

6 number required under section 36(f)(1)(A), 

7 ‘‘(ii) the inclusion of a social security 

8 number so required if— 

9 ‘‘(I) the claim of the credit on 

10 the return reflects the treatment of 

11 such individual as being of an age dif12 ferent from the individual’s age based 

13 on such social security number, or 

14 ‘‘(II) except as provided in sec15 tion 36(c)(1)(B), such social security 

16 number has been included (other than 

17 as a dependent for purposes of section 

18 151) on a return for any previous tax19 able year claiming any credit or de20 duction described in section 

21 36(c)(1)(A)(i), 

22 ‘‘(iii) the omission of any other re23 quired information or documentation de24 scribed in section 36(f)(1), including the 


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1 inclusion of a post office box instead of a 

2 street address for the purchased residence, 

3 ‘‘(iv) the inclusion of any information 

4 or documentation described in clause (iii) 

5 if such information or documentation does 

6 not support a valid claim for the credit, or 

7 ‘‘(v) a claim of such credit for a tax8 able year with respect to the purchase of 

9 a residence made after the last day of such 

10 taxable year,’’. 

11 (f) IRS RECORDKEEPING.—Notwithstanding the lim12 itations on assessment and collection under section 6501 

13 of the Internal Revenue Code of 1986, the Commissioner 

14 of Internal Revenue shall maintain records of returns and 

15 return information (as defined in section 6103(b)(2) of 

16 such Code) of any taxpayer claiming the credit under sec17 tion 36 of such Code (as amended by this section) for the 

18 taxable year in which such credit is claimed and suc19 ceeding taxable years in the individual master files of the 

20 Internal Revenue Service. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2023. 

Æ 


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