I 
119TH CONGRESS 
1ST SESSION H. R. 6390 
To rescind certain immigration enforcement funds and amend the Internal 
Revenue Code to provide for new credits related to expanding access 
to housing. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 3, 2025 
Mr. GOMEZ (for himself, Ms. NORTON, Mr. CARTER of Louisiana, Ms. SALI-
NAS, Mr. GARCIA of California, Mr. SHERMAN, Mr. THOMPSON of Cali-
fornia, Mr. GARCI´A of Illinois, Mr. GOLDMAN of New York, Ms. GARCIA 
of Texas, Mr. CISNEROS, Ms. ANSARI, Mr. RUIZ, Ms. RIVAS, Mr. 
THANEDAR, Ms. BARRAGA´N, Mr. DAVIS of Illinois, Ms. SA´NCHEZ, Mr. 
CARSON, Mr. VARGAS, Mr. CARBAJAL, Ms. CHU, Ms. MATSUI, Mr. LIEU, 
Ms. WASSERMAN SCHULTZ, Mrs. BEATTY, Mr. JACKSON of Illinois, Ms. 
JACOBS, Mr. DELUZIO, Mr. SWALWELL, Mr. EVANS of Pennsylvania, Mr. 
LICCARDO, Ms. SIMON, Ms. LEE of Pennsylvania, Mr. MCGOVERN, Mrs. 
RAMIREZ, Ms. DEXTER, Mr. MULLIN, Ms. LEGER FERNANDEZ, Mrs. 
MCIVER, Mr. MENENDEZ, Mr. KRISHNAMOORTHI, Mr. COHEN, Ms. 
TITUS, Ms. RANDALL, Mr. VEASEY, Mr. PETERS, Mr. JOHNSON of Geor-
gia, Mr. POCAN, Mr. NADLER, Ms. KELLY of Illinois, Mr. BOYLE of 
Pennsylvania, Ms. DEAN of Pennsylvania, Ms. KAMLAGER-DOVE, Mr. 
FROST, Mrs. WATSON COLEMAN, Ms. BROWNLEY, Mr. LATIMER, Mr. 
SOTO, Ms. BALINT, Mrs. MCCLAIN DELANEY, and Ms. SCHAKOWSKY) in-
troduced the following bill; which was referred to the Committee on Ways 
and Means, and in addition to the Committees on Armed Services, Home-
land Security, and the Judiciary, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To rescind certain immigration enforcement funds and 
amend the Internal Revenue Code to provide for new 
credits related to expanding access to housing. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Make Housing Afford-
able and Defend Democracy Act’’. 
SEC. 2. RESCISSIONS OF CERTAIN IMMIGRATION ENFORCE-
MENT FUNDS. 
(a) FINDINGS.—Congress finds that the amount of 
$175,660,630,000.00 shall be rescinded. 
(b) DEPARTMENT OF DEFENSE.—There is perma-
nently rescinded $1,000,000,000.00, to be derived from 
the unobligated balances of amounts made available by 
section 20011 of the Act titled ‘‘An Act to provide for 
reconciliation pursuant to title II of H. Con. Res. 14’’ 
(Public Law 119–21), of the for improving Department 
of Defense border support and counter- drug missions. 
(c) INFRASTRUCTURE AND WALL SYSTEM.—There is 
permanently rescinded $46,550,000,000.00, to be derived 
from the unobligated balances of amounts made available 
by section 90001 of the Act titled ‘‘An Act to provide for 
reconciliation pursuant to title II of H. Con. Res. 14’’ 
(Public Law 119–21), for border infrastructure and wall 
system. 
(d) U.S. CUSTOMS AND BORDER PROTECTION PER-
SONNEL.—There 
is 
permanently 
rescinded 
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$4,100,000,000.00, to be derived from the unobligated 
balances 
of 
amounts 
made 
available 
by 
section 
90002(a)(1) of the Act titled ‘‘An Act to provide for rec-
onciliation pursuant to title II of H. Con. Res. 14’’ (Public 
Law 119–21), for U.S. Customs and Border Protection 
personnel. 
(e) RETENTION, HIRING, AND PERFORMANCE BO-
NUSES.—There 
is 
permanently 
rescinded 
$2,052,630,000.00, to be derived from the unobligated 
balances 
of 
amounts 
made 
available 
by 
section 
90002(a)(2) of the Act titled ‘‘An Act to provide for rec-
onciliation pursuant to title II of H. Con. Res. 14’’ (Public 
Law 119–21), for retention, hiring, and performance bo-
nuses of U.S. Customs and Border Protection personnel. 
(f) U.S. CUSTOMS AND BORDER PROTECTION VEHI-
CLES.—There is permanently rescinded $855,000,000.00, 
to be derived from the unobligated balances of amounts 
made available by section 90002(a)(3) of the Act titled 
‘‘An Act to provide for reconciliation pursuant to title II 
of H. Con. Res. 14’’ (Public Law 119–21), for U.S. Cus-
toms and Border Protection vehicles. 
(g) U.S. CUSTOMS AND BORDER PROTECTION FA-
CILITIES.—There 
is 
permanently 
rescinded 
$5,000,000,000.00, to be derived from the unobligated 
balances 
of 
amounts 
made 
available 
by 
section 
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90002(a)(4) of the Act titled ‘‘An Act to provide for rec-
onciliation pursuant to title II of H. Con. Res. 14’’ (Public 
Law 119–21), for U.S. Customs and Border Protection 
facilities. 
(h) DETENTION CAPACITY.—There is permanently 
rescinded $45,000,000,000.00, to be derived from the un-
obligated balances of amounts made available by section 
90003 of the Act titled ‘‘An Act to provide for reconcili-
ation pursuant to title II of H. Con. Res. 14’’ (Public Law 
119–21), for detention capacity. 
(i) BORDER SECURITY, TECHNOLOGY, AND SCREEN-
ING.—There is permanently rescinded $6,168,000,000.00, 
to be derived from the unobligated balances of amounts 
made available by section 90004 of the Act titled ‘‘An Act 
to provide for reconciliation pursuant to title II of H. Con. 
Res. 14’’ (Public Law 119–21), for border security, tech-
nology, and screening. 
(j) STATE AND LOCAL ASSISTANCE.—There is per-
manently rescinded $10,000,000,000.00, to be derived 
from the unobligated balances of amounts made available 
by section 90005(b) of the Act titled ‘‘An Act to provide 
for reconciliation pursuant to title II of H. Con. Res. 14’’ 
(Public Law 119–21), for the State Border Security Rein-
forcement Fund. 
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(k) DEPARTMENT OF HOMELAND SECURITY.—There 
is permanently rescinded $10,000,000,000.00, to be de-
rived from the unobligated balances of amounts made 
available by section 90007 of the Act titled ‘‘An Act to 
provide for reconciliation pursuant to title II of H. Con. 
Res. 14’’ (Public Law 119–21), for Department of Home-
land Security appropriations for border support. 
(l) IMMIGRATION AND LAW ENFORCEMENT ACTIVI-
TIES.—There 
is 
permanently 
rescinded 
$2,055,000,000.00, to be derived from the unobligated 
balances of amounts made available by section 100051 of 
the Act titled ‘‘An Act to provide for reconciliation pursu-
ant to title II of H. Con. Res. 14’’ (Public Law 119–21), 
for immigration and law enforcement activities. 
(m) HIRING AND TRAINING.—There is permanently 
rescinded $29,850,000,000.00, to be derived from the un-
obligated balances of amounts made available by section 
100052 of the Act titled ‘‘An Act to provide for reconcili-
ation pursuant to title II of H. Con. Res. 14’’ (Public Law 
119–21), for U.S. Immigration and Customs Enforcement 
hiring and training. 
(n) FEDERAL LAW ENFORCEMENT TRAINING CEN-
TERS.—There is permanently rescinded $750,000,000.00, 
to be derived from the unobligated balances of amounts 
made available by section 100053 of the Act titled ‘‘An 
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Res. 14’’ (Public Law 119–21), for the Operation 
Stonegarden Grant Program. 
(s) BUREAU OF PRISONS.—There is permanently re-
scinded $5,000,000,000.00, to be derived from the unobli-
gated balances of amounts made available by section 
100056 of the Act titled ‘‘An Act to provide for reconcili-
ation pursuant to title II of H. Con. Res. 14’’ (Public Law 
119–21), for the Bureau of Prisons. 
SEC. 3. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Section 36 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) IN GENERAL.—In the case of an individual who 
is a first-time homebuyer of a principal residence in the 
United States during a taxable year, there shall be allowed 
as a credit against the tax imposed by this subtitle for 
such taxable year an amount equal to so much of the 
amount of the qualified home purchase expenses paid by 
such taxpayer to purchase such principal residence as does 
not exceed $25,000. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) (determined without re-
gard to this paragraph) for the taxable year shall be 
reduced (but not below zero) by the amount which 
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bears the same ratio to the amount which is so al-
lowable as— 
‘‘(A) the excess (if any) of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for the preceding taxable 
year, over 
‘‘(ii) the applicable threshold amount, 
bears to— 
‘‘(B) $100,000. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
this 
subsection, 
the 
term 
‘threshold 
amount’ 
means— 
‘‘(A) $300,000 in the case of a joint return 
or surviving spouse, 
‘‘(B) $225,000 in the case of a head of 
household, or 
‘‘(C) $150,000 in the case of any other in-
dividual. 
‘‘(3) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of paragraph (1), the term ‘modified 
adjusted gross income’ means the adjusted gross in-
come of the taxpayer for the taxable year increased 
by any amount excluded from gross income under 
section 911, 931, or 933. 
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‘‘(c) INCREASE IN CREDIT FOR FIRST-GENERATION 
HOMEBUYER.— 
‘‘(1) IN GENERAL.—In the case of a first-gen-
eration homebuyer, subsection (a) shall be applied 
by substituting ‘$50,000’ for ‘$25,000’. 
‘‘(2) FIRST-GENERATION
HOMEBUYER.—For 
purposes of this subsection, the term ‘first-genera-
tion homebuyer’ means an individual who certifies 
that, as of the last day of the taxable year with re-
spect to which the credit is allowed (determined 
without regard to any ownership interest with re-
spect to which such credit is allowed), such indi-
vidual (and such individual’s spouse, in the case of 
a joint return) is an individual described in para-
graph (3). 
‘‘(3) INDIVIDUAL DESCRIBED.—An individual is 
described in this paragraph if— 
‘‘(A) such individual aged out of the foster 
care system, 
‘‘(B) such individual was emancipated 
from their parent, or 
‘‘(C) no parent of such individual had a major-
ity interest in a residential property at any time dur-
ing the lifetime of such individual. 
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‘‘(d) INCREASE
IN
CREDIT
FOR
HIGH
COST 
AREAS.—In the case of the purchase of a principal resi-
dence located in a high cost area (as such term is used 
in the Federal National Mortgage Association Charter 
Act), the amount in effect under subsection (a) (after the 
application of subsection (j)) shall be increased by an 
amount equal to the product of— 
‘‘(1) 3.5 percent, multiplied by 
‘‘(2) the excess of— 
‘‘(A) the conforming loan limit value for 
properties in high cost areas established under 
302(b)(2) of the Federal National Mortgage As-
sociation Charter Act, minus 
‘‘(B) the conforming loan limit value for 
properties established under section 305(a)(2) 
of the Federal Home Loan Mortgage Corpora-
tion Act, as most recently updated by the Fed-
eral Housing Finance Agency. 
‘‘(e) EXCEPTIONS.—No credit under subsection (a) 
shall be allowed to any taxpayer for any taxable year with 
respect to the purchase of a residence if— 
‘‘(1) the taxpayer is a nonresident alien, 
‘‘(2) the taxpayer disposes of such residence (or 
such residence ceases to be the principal residence of 
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the taxpayer (and, if married, the taxpayer’s 
spouse)) before the close of such taxable year, 
‘‘(3) a deduction under section 151 with respect 
to such taxpayer is allowable to another taxpayer for 
such taxable year, or 
‘‘(4) the taxpayer fails to attach to the return 
of tax for such taxable year a properly executed copy 
of the settlement statement used to complete such 
purchase. 
‘‘(f) ELECTION FOR ADVANCED PAYMENT.— 
‘‘(1) IN GENERAL.—At the election of the first- 
time homebuyer, the Secretary shall transfer to a 
qualifying escrow account an amount equal to the 
amount that is allowable to such first-time home-
buyer under subsection (a) in the present taxable 
year. 
‘‘(2) TREATMENT OF TRANSFER.—The amount 
of the credit allowed under subsection (a) to any 
taxpayer for any taxable year shall be reduced (but 
not below zero) by the aggregate amount of pay-
ments made under this subsection at the election of 
such taxpayer during such taxable year. Any failure 
to so reduce the credit shall be treated as arising out 
of a mathematical or clerical error and assessed ac-
cording to section 6213(b)(1). 
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‘‘(3) QUALIFYING ESCROW ACCOUNT.—For pur-
poses of this subsection, the term ‘qualifying escrow 
account’ means an escrow account established for 
the purchase of a principal residence by a qualified 
first-time homebuyer that meets the following re-
quirements: 
‘‘(A) Amounts in such account may only be 
used for a down payment or closing costs on a 
purchase with respect to which a credit is al-
lowed under subsection (a). 
‘‘(B) Such account is administered by a 
bank (as defined in section 408(n)). 
‘‘(C) The administrator of the account 
shall transfer to the Secretary any amount in 
such account not used under subparagraph (A) 
on the earlier of— 
‘‘(i) the date that is 180 days after 
the date on which such amount was trans-
ferred to such account under paragraph 
(1), or 
‘‘(ii) as soon as practicable upon re-
quest of the qualified first-time homebuyer. 
‘‘(g) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—If, during any taxable year, 
there is a recapture event with respect to any prop-
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erty with respect to which a credit was allowed 
under subsection (a), then the tax of the taxpayer to 
whom such credit was allowed under this chapter for 
such taxable year shall be increased by an amount 
equal to the amount of the credit that was allowed 
with respect to such property. 
‘‘(2) RECAPTURE EVENT.—For purposes of this 
section, the term ‘recapture event’ means, during the 
5-year period beginning on the date of the purchase 
with respect to which a credit was allowed under 
subsection (a)— 
‘‘(A) the sale, lease to a third party, or dis-
position of any part of the property with respect 
to which such credit was allowed, or 
‘‘(B) such property ceases to be the prin-
cipal residence of the taxpayer (or, in the case 
of a joint return, of the taxpayer’s spouse). 
‘‘(3) EXCEPTIONS.—Paragraph (1) shall not 
apply to any of the following: 
‘‘(A) PURCHASE OF NEW PRIMARY RESI-
DENCE.— 
‘‘(i) IN GENERAL.—A sale of a prop-
erty with respect to which a credit was al-
lowed under subsection (a) which is inci-
dent to the purchase by a taxpayer of a 
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new primary residence if the proceeds of 
such sale are used to carry out the pur-
chase of such new primary residence. 
‘‘(ii) TREATMENT OF NEW PRIMARY 
RESIDENCE.—In the case of a purchase of 
a primary residence described in clause (i), 
for purposes of paragraph (1), such pri-
mary residence shall be treated as a prop-
erty with respect to which a credit was al-
lowed under subsection (a), except that the 
period described in paragraph (2) shall 
begin on the date on which the original 
purchase with respect to which the credit 
was allowed under subsection (a) occurred. 
‘‘(B) DEATH.—Any taxable year ending 
after the death of the taxpayer (or, in the case 
of a joint return, of the spouse of the taxpayer). 
‘‘(C) DIVORCE.—A transfer of a residence 
to which section 1041(a) applies. 
‘‘(D) GOVERNMENT ORDERS.—A recapture 
event relating to a principal residence occurring 
in connection with Government orders received 
by such individual, or such individual’s spouse, 
for qualified official extended duty service. 
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‘‘(E) QUALIFIED
OFFICIAL
EXTENDED 
DUTY
SERVICE.—For purposes of this para-
graph, the term ‘qualified official extended duty 
service’ means service on qualified official ex-
tended duty as— 
‘‘(i) a member of the uniformed serv-
ices, 
‘‘(ii) a member of the Foreign Service 
of the United States, or 
‘‘(iii) an employee of the intelligence 
community. 
‘‘(h) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
FIRST-TIME
HOMEBUYER.—The 
term 
‘first-time homebuyer’ means any individual if such 
individual 
(and 
if 
married, 
such 
individual’s 
spouse)— 
‘‘(A) had no present ownership interest in 
a principal residence during the 10-year period 
ending on the date of the purchase of the prin-
cipal residence to which this section applies, 
‘‘(B) has not been allowed a credit under 
subsection (a) for any preceding taxable year, 
and 
‘‘(C) attests that such individual (and if 
married, such individual’s spouse) has never 
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had a majority interest in a residential prop-
erty. 
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(3) PURCHASE.— 
‘‘(A) IN GENERAL.—The term ‘purchase’ 
means any acquisition, but only if— 
‘‘(i) the property is purchased using a 
mortgage loan from a commercial lender, 
‘‘(ii) the property is not acquired from 
a person related to the person acquiring 
such property (or, if married, such individ-
ual’s spouse), and 
‘‘(iii) the basis of the property in the 
hands of the person acquiring such prop-
erty is not determined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
property in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a). 
‘‘(B) CONSTRUCTION.—A residence which 
is constructed by the taxpayer shall be treated 
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as purchased by the taxpayer on the date the 
taxpayer first occupies such residence. 
‘‘(C) GUARANTEED LOANS INCLUDED.—A 
loan shall not fail to be treated as a mortgage 
loan from a commercial lender under subpara-
graph (A)(i) merely because such loan is guar-
anteed under section 184 of the Housing and 
Community Development Act of 1992. 
‘‘(4) 
QUALIFIED
HOME
PURCHASES
EX-
PENSES.—The term ‘qualified home purchase ex-
penses’ means amounts paid for— 
‘‘(A) a down payment on the purchase of 
a home, and 
‘‘(B) closing costs with respect to such 
purchase. 
‘‘(5) RELATED
PERSONS.—A person shall be 
treated as related to another person if the relation-
ship between such persons would result in the dis-
allowance of losses under section 267 or 707(b) (but, 
in applying section 267(b) and (c) for purposes of 
this section, paragraph (4) of section 267(c)(4) shall 
be treated as providing that the family of an indi-
vidual shall include only his spouse, ancestors, and 
lineal descendants). 
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‘‘(i) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section in connection 
with any expenditure for any property, the increase in the 
basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so determined. 
‘‘(j) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—in the case of any taxable 
year beginning after 2025, the dollar amounts in 
this section shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2024’ for 
calendar year 2016 in subparagraph (A)(ii). 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $100, such increase 
shall be rounded to the nearest multiple of $100. 
‘‘(k) REPORTING.— 
‘‘(1) IN GENERAL.—If the Secretary requires 
information reporting under section 6045 by a per-
son described in subsection (e)(2) thereof to verify 
the eligibility of taxpayers for the credit allowable by 
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this section, the exception provided by section 
6045(e) shall not apply. 
‘‘(2) INFORMATION FROM LENDER.—The Sec-
retary may require any lender issuing a loan for the 
purchase of a property with respect to which a credit 
is allowed under subsection (a) or with respect to 
which a first-time homebuyer has made a request for 
a transfer under subsection (f)(1) to provide such in-
formation relating to the related purchase as the 
Secretary determines appropriate. 
‘‘(l) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to residences purchased in taxable 
years beginning after the date of the enactment of this 
Act. 
SEC. 4. STARTER HOME CONSTRUCTION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45BB. STARTER HOME CONSTRUCTION CREDIT. 
‘‘(a) IN GENERAL.—For the purposes of section 38, 
the starter home construction credit determined under this 
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section for any taxable year is an amount equal to 15 per-
cent of the qualified home construction costs of the tax-
payer for the taxable year. 
‘‘(b) LIMITATION.—The amount allowable as a credit 
under subsection (a) to any taxpayer for any taxable year 
shall not exceed the amount allocated to such taxpayer for 
the calendar year in which such taxable year ends under 
subsection (e). 
‘‘(c) INCREASE FOR FIRST-TIME HOMEBUYER.—In 
the case of a unit of housing sold to a first-time home-
buyer (as defined in section 36(g)(1)), subsection (a) shall 
be applied by substituting ‘30 percent’ for ‘15 percent’. 
‘‘(d) QUALIFIED HOME CONSTRUCTION COSTS.—For 
purposes of this section, the term ‘qualified home con-
struction costs’ means, with respect to a taxable year, 
amounts paid or incurred by the taxpayer for labor and 
material costs to construct a unit of housing placed in 
service during such taxable year— 
‘‘(1) the total square footage of which does not 
exceed 1200 feet, and 
‘‘(2) the sale price of which does not exceed 80 
percent of the area median home price. 
‘‘(e) STATE ALLOCATION.— 
‘‘(1) IN
GENERAL.—The aggregate starter 
home construction credit dollar amount which a 
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housing credit agency may allocate for any calendar 
year is the portion of the State starter home con-
struction credit ceiling allocated under this sub-
section for such calendar year to such agency. 
‘‘(2) STATE CEILING INITIALLY ALLOCATED TO 
STATE
HOUSING
CREDIT
AGENCIES.—The State 
starter home construction credit ceiling for each cal-
endar year shall be allocated to the housing credit 
agency of such State. If there is more than 1 hous-
ing credit agency of a State, all such agencies shall 
be treated as a single agency. 
‘‘(3) STATE
STARTER
HOME
CONSTRUCTION 
CREDIT CEILING.—For purposes of this subsection, 
the State starter home construction credit ceiling ap-
plicable to any State for any calendar year shall be 
an amount equal to $30 multiplied by the population 
of the State (determined in accordance with section 
146(j)). 
‘‘(4) REALLOCATION
OF
UNUSED
STARTER 
HOME
CONSTRUCTION
CREDIT
AMOUNTS
AMONG 
STATES.— 
‘‘(A) IN
GENERAL.—The unused starter 
home construction credit amount of a State for 
any calendar year shall be assigned by the Sec-
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retary for allocation among qualified States for 
the succeeding calendar year. 
‘‘(B) UNUSED STARTER HOME CONSTRUC-
TION CREDIT AMOUNT.—For purposes of this 
paragraph, the unused starter home construc-
tion credit amount of a State for any calendar 
year is the excess (if any) of— 
‘‘(i) the aggregate amount allocated to 
such State for such year under this sub-
section, over 
‘‘(ii) the aggregate starter home con-
struction credit dollar amount allocated for 
such year. 
‘‘(C) FORMULA FOR ALLOCATION OF UN-
USED STARTER HOME CONSTRUCTION CREDIT 
AMOUNTS
AMONG
QUALIFIED
STATES.—The 
amount allocated under this paragraph to a 
qualified State for any calendar year shall be 
the amount determined by the Secretary to bear 
the same ratio to the aggregate unused starter 
home construction credit amounts of all States 
for the preceding calendar year as such State’s 
population for the calendar year bears to the 
population of all qualified States for the cal-
endar year. For purposes of the preceding sen-
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tence, population shall be determined in accord-
ance with section 146(j). 
‘‘(D) QUALIFIED STATE.—For purposes of 
this paragraph, the term ‘qualified State’ 
means, with respect to a calendar year, any 
State— 
‘‘(i) which allocated its entire State 
starter home credit ceiling for the pre-
ceding calendar year, and 
‘‘(ii) which requests (not later than 
May 1 of the calendar year) an allocation 
under subparagraph (C). 
‘‘(E) SECRETARIAL
WAIVER.—The Sec-
retary may issue a waiver if the Secretary de-
termines such waiver will serve the purposes of 
this section to allow such portion of the State 
starter home credit ceiling of any State for any 
calendar year as was allocated to such State 
under paragraph (3) for such calendar year (de-
termined without regard to this paragraph)— 
‘‘(i) to be treated as allocated to such 
State for the following calendar year under 
such paragraph, and 
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‘‘(ii) to not be treated as unused 
starter home construction credit amount of 
such State for purposes of this paragraph. 
‘‘(5) 
CERTIFICATE
OF
OCCUPANCY
RE-
QUIRED.—The State starter home construction cred-
it ceiling determined under paragraph (3) for any 
calendar year shall be reduced by the amount equal 
to 50 percent of the amount of allocations made 
under this subsection by such State’s housing credit 
agency during the second preceding calendar year to 
construct housing with respect to which no certifi-
cate of occupancy has been issued. 
‘‘(6) HOUSING CREDIT AGENCY.—For purposes 
of this subsection, the term ‘housing credit agency’ 
has the meaning given in section 42(h)(8)(A). 
‘‘(f) TRIBAL ALLOCATION.— 
‘‘(1) IN
GENERAL.—The aggregate starter 
home construction credit dollar amount which an In-
dian Tribal Government may allocate for any cal-
endar year is the portion of the aggregate Indian 
starter home construction credit ceiling allocated 
under paragraph (3) for such calendar year to such 
Indian Tribal Government. 
‘‘(2) AGGREGATE INDIAN STARTER HOME CON-
STRUCTION CREDIT CEILING.—The aggregate Indian 
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starter home construction credit ceiling for any cal-
endar year shall be the greatest of— 
‘‘(A) $30 multiplied by total number of en-
rolled citizens of all Tribes estimated by the 
Secretary of the Interior with respect to such 
calendar year, 
‘‘(B) in the case of a calendar year begin-
ning after the first calendar year with respect 
to which an amount was determined under sub-
section (e)(3), the lowest amount determined 
with respect to any State in the preceding cal-
endar year under such subsection, or 
‘‘(C) $30,000,000. 
‘‘(3) ALLOCATION
OF
AGGREGATE
AMONG 
TRIBES.— 
‘‘(A) IN GENERAL.—Not later than 1 year 
after the date of the enactment of the American 
Homeownership Opportunity Act of 2025, the 
Secretary of the Treasury, in consultation with 
the Secretary of the Interior and representa-
tives of such Indian Tribal Governments as ad-
minister qualified Indian lands and request to 
participate in such consultation, shall determine 
an appropriate process to allocate the aggregate 
Indian starter home construction credit ceiling 
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among eligible Indian Tribal Governments for 
each calendar year. 
‘‘(B) REVISION.—The Secretary, in con-
sultation with the Secretary of the Interior and 
representatives of such Indian Tribal Govern-
ments as administer qualified Indian lands and 
request to participate in such consultation, shall 
evaluate the process established under subpara-
graph (A) not less frequently than every 5 years 
and may make such changes to such process as 
such Secretary, after such consultation, deter-
mines appropriate to further the purposes of 
this section. 
‘‘(4) INTERTRIBAL CONSORTIA.—Under regula-
tions prescribed by the Secretary, an Indian Tribal 
Government (or partnership of Indian Tribal Gov-
ernments) may authorize an intertribal consortium, 
an organization, or an Alaska Native regional or vil-
lage corporation, as defined in, or established pursu-
ant to, the Alaska Native Claims Settlement Act, to 
plan for, coordinate or otherwise administer services, 
finances, functions, or activities on behalf of such 
Government under this subsection, except that the 
authorized entity shall have the rights and respon-
sibilities of the authorizing Indian Tribal Govern-
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ment (or Indian Tribal Governments) only to the ex-
tent provided in the authorizing resolution. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) QUALIFIED
INDIAN
LANDS.—The 
term ‘qualified Indian lands’ means— 
‘‘(i) Indian lands within the meaning 
of section 29(j)(8) of the Stevenson-Wydler 
Technology Innovation Act of 1980, 
‘‘(ii) land held in fee simple by an In-
dian Tribal Government, 
‘‘(iii) land held by incorporated Native 
groups, regional corporations, and village 
corporations under the provisions of the 
Alaska Native Claims Settlement Act, and 
‘‘(iv) Hawaiian Home Lands (as de-
fined in section 801 of the Native Amer-
ican Housing Assistance and Self-Deter-
mination Act of 1996). 
‘‘(B) ELIGIBLE INDIAN TRIBAL GOVERN-
MENT.—For purposes of this subsection, the 
term ‘eligible Indian Tribal Government’ means, 
with respect to a calendar year, an Indian Trib-
al Government that— 
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‘‘(i) requests an allocation under this 
subsection for such calendar year, and 
‘‘(ii) 
administers 
qualified 
Indian 
lands. 
‘‘(C) INDIAN TRIBAL GOVERNMENT.—The 
term ‘Indian Tribal Government’ means the 
recognized governing body of any Indian or 
Alaska Native tribe, band, nation, pueblo, vil-
lage, community, component band, or compo-
nent reservation, individually identified (includ-
ing parenthetically) pursuant to section 104 of 
the Federally Recognized Indian Tribe List Act 
of 1994. 
‘‘(g) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2025, the dollar amounts in 
subsection (e)(3) and (f)(2) shall each be increased 
by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2024’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
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‘‘(2) ROUNDING.—If any increase under sub-
paragraph (A) is not a multiple of $5, such increase 
shall be rounded to the nearest multiple of $5. 
‘‘(h) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section in connection 
with any expenditure for any property, the increase in the 
basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so determined. 
‘‘(i) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code is amended by strik-
ing ‘‘plus’’ at the end of paragraph (40), by striking the 
period at the end of paragraph (41) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(42) the starter home construction credit de-
termined under section 45BB(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45AA the following new item: 
‘‘Sec. 45BB. Starter home construction credit.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this section. 
SEC. 5. AFFORDABLE HOUSING CONVERSION CREDIT. 
(a) INVESTMENT CREDIT FOR CONVERSION OF NON- 
RESIDENTIAL BUILDINGS TO AFFORDABLE HOUSING.— 
(1) IN GENERAL.—Subpart E of part IV of 
subchapter A of chapter 1 of subtitle A of the Inter-
nal Revenue Code of 1986 is amended by inserting 
after section 48E the following new section: 
‘‘SEC. 48F. AFFORDABLE HOUSING CONVERSION CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 46, the affordable housing conversion credit for any 
taxable year is an amount equal to 20 percent of the quali-
fied conversion expenditures of the taxpayer with respect 
to a qualified affordable housing building placed in service 
by the taxpayer during the taxable year. 
‘‘(b) QUALIFIED CONVERSION EXPENDITURES.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified conver-
sion expenditures’ means, with respect to any quali-
fied affordable housing building, any amount prop-
erly chargeable to capital account— 
‘‘(A) for property for which depreciation is 
allowable under section 168, and 
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‘‘(B) in connection with the qualified con-
version of a qualified affordable housing build-
ing. 
‘‘(2) 
CERTAIN
EXPENDITURES
NOT
IN-
CLUDED.—The term ‘qualified conversion expendi-
tures’ does not include— 
‘‘(A) LIMITATION ON PERIOD OF CONVER-
SION.—Except as provided in subsection (f), 
any amount paid or incurred other than during 
the 2-year period ending on the date on which 
the taxpayer places the qualified affordable 
housing building in service. 
‘‘(B) COST OF ACQUISITION.—The cost of 
acquiring any building or interest therein. 
‘‘(3) SPECIAL
RULE
FOR
BROWNFIELDS.— 
Paragraph (1)(A) shall not apply with respect to any 
expenditure for clean up of qualifying brownfield 
property (as defined in section 512(b)(19)). 
‘‘(4) COORDINATION
WITH
REHABILITATION 
CREDIT.—In the case of any qualified conversion ex-
penditures which are taken into account for pur-
poses of determining the rehabilitation credit under 
section 47, the amount of such expenditures taken 
into account under this section (determined without 
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regard to this paragraph) shall be reduced by 50 
percent. 
‘‘(c) QUALIFIED CONVERSION.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘qualified conver-
sion’ means the conversion of an eligible commercial 
building into a qualified affordable housing building 
if the qualified conversion expenditures of the tax-
payer with respect to such conversion exceed the 
greater of— 
‘‘(A) an amount equal to 50 percent of the 
adjusted basis of such building (determined im-
mediately prior to such conversion), or 
‘‘(B) $100,000. 
‘‘(2) ELIGIBLE
COMMERCIAL
BUILDING.—The 
term ‘eligible commercial building’ means any build-
ing which, with respect to any conversion— 
‘‘(A) was originally placed in service not 
less than 20 years before the date on which 
such conversion begins, and 
‘‘(B) immediately prior to such conversion, 
was nonresidential real property (as defined in 
section 168). 
‘‘(d) QUALIFIED AFFORDABLE HOUSING BUILD-
ING.—For purposes of this section— 
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‘‘(1) IN GENERAL.—The term ‘qualified afford-
able housing building’ means any residential building 
if during the 30-year period beginning on the date 
on which such building is placed in service by the 
taxpayer, not less than 20 percent of the residential 
units in the building are both rent-restricted and re-
served for individuals whose income is 80 percent or 
less of the area median income. 
‘‘(2) RENT
AND
INCOME
LIMITATION.—For 
purposes of this subsection, rules similar to the rules 
of subsection (g) of section 42 shall apply to deter-
mine whether a unit is rent-restricted, treatment of 
units occupied by individuals whose incomes rise 
above the limit, and the treatment of units where 
Federal rental assistance is reduced as tenant’s in-
come increases. 
‘‘(e) LIMITATION ON AGGREGATE CREDIT ALLOW-
ABLE.— 
‘‘(1) CREDIT
MAY
NOT
EXCEED
CREDIT 
AMOUNT ALLOCATED TO BUILDING.— 
‘‘(A) IN
GENERAL.—The amount of the 
credit determined under this section with re-
spect to any building shall not exceed the quali-
fied conversion credit dollar amount allocated to 
such building under this subsection by the 
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housing credit agency of the State in which 
such building is located. 
‘‘(B) TIME
FOR
MAKING
ALLOCATION.— 
Except in the case of an allocation which meets 
the requirements of subparagraph (C), an allo-
cation shall be taken into account under sub-
paragraph (A) only if it is made not later than 
the close of the calendar year in which the 
building is placed in service. 
‘‘(C) EXCEPTION
WHERE
BINDING
COM-
MITMENT.—An allocation meets the require-
ments of this subparagraph if there is a binding 
commitment (not later than the close of the cal-
endar year in which the building is placed in 
service) by the housing credit agency to allocate 
a specified housing credit dollar amount to such 
building beginning in a later taxable year. 
‘‘(2) STATE LIMITATION.— 
‘‘(A) IN GENERAL.—The aggregate quali-
fied conversion credit dollar amount which a 
housing credit agency of any State may allocate 
is the sum of— 
‘‘(i) the amount which bears the same 
ratio to the national qualified conversion 
credit limitation as— 
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‘‘(I) the population of such State, 
bears to 
‘‘(II) the population of all States, 
plus 
‘‘(ii) the sum of any amounts deter-
mined under subparagraph (C). 
‘‘(B) NATIONAL
QUALIFIED
CONVERSION 
CREDIT
LIMITATION.—The national qualified 
conversion credit limitation is $12,000,000,000. 
‘‘(C) ADDITIONAL
AMOUNTS
PROVIDED 
FOR
CERTAIN
BUILDINGS
IN
ECONOMICALLY 
DISTRESSED AREAS.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(ii), in any case in 
which— 
‘‘(I) the housing credit agency of 
a State allocates an amount to a 
building which is located in an eco-
nomically distressed area, and 
‘‘(II) the Secretary subsequently 
designates such amount for purposes 
of this paragraph, 
the amount determined under this para-
graph with respect to such building shall 
be the amount originally allocated by the 
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housing credit agency of the State under 
clause (i). 
‘‘(ii) 
LIMITATION.—The 
aggregate 
amount which the Secretary may designate 
under clause (i)(II) shall not exceed 
$3,000,000,000. 
‘‘(iii) MANNER
OF
DESIGNATION.— 
Not later than 120 days after the date of 
the enactment of this section, the Sec-
retary shall establish a program for deter-
mining the designation of amounts that 
may be designated under this subpara-
graph. 
‘‘(D) 
REALLOCATION
OF
CERTAIN 
AMOUNTS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraph (A)— 
‘‘(I) no amount may be allocated 
under paragraph (1) by a housing 
credit agency of an undersubscribed 
State after December 31, 2028, and 
‘‘(II) the dollar amount deter-
mined under subparagraph (A) with 
respect to any oversubscribed State 
after such date shall be increased by 
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such State’s share of the reallocation 
amount. 
‘‘(ii) STATE SHARE.—For purposes of 
clause (i), an oversubscribed State’s share 
of the reallocation amount is the amount 
which bears the same ratio to the realloca-
tion amount as— 
‘‘(I) the population of such State, 
bears to 
‘‘(II) the population of all over-
subscribed States. 
‘‘(iii) DEFINITIONS.—For purposes of 
this subparagraph— 
‘‘(I) 
UNDERSUBSCRIBED 
STATE.—The term ‘undersubscribed 
State’ means any State that is not an 
oversubscribed State. 
‘‘(II) 
OVERSUBSCRIBED 
STATE.—The 
term 
‘oversubscribed 
State’ means any State the housing 
credit agency of which has allocated 
all of the qualified conversion credit 
dollar amount which may be allocated 
by it before the date described in 
clause (i)(I). 
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‘‘(III) 
REALLOCATION 
AMOUNT.—The 
term 
‘reallocation 
amount’ means the sum of the 
amounts described in subparagraph 
(A) which have not been allocated by 
undersubscribed States before the 
date described in clause (i)(I). 
‘‘(3) MANNER OF ALLOCATION.— 
‘‘(A) PLAN FOR ALLOCATION.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this section, the 
qualified conversion credit dollar amount 
with respect to any building shall be zero 
unless such amount was allocated pursuant 
to a conversion credit allocation plan of the 
housing credit agency which is approved by 
the governmental unit (in accordance with 
rules similar to the rules of section 
147(f)(2) (other than subparagraph (B)(ii) 
thereof)) of which such agency is a part. 
‘‘(ii) CONVERSION
CREDIT
ALLOCA-
TION
PLAN.—For purposes of this sub-
paragraph, the term ‘conversion credit allo-
cation plan’ means a plan— 
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‘‘(I) which sets selection criteria 
for allocations, taking into account— 
‘‘(aa) whether the credit is 
needed to assure the financial 
feasibility of the conversion, 
‘‘(bb) the extent to which 
the conversion results in the cre-
ation of affordable housing, 
‘‘(cc) the extent to which the 
conversion results in the creation 
of housing near transportation, 
employment, and commercial op-
portunities, 
‘‘(dd) the extent to which 
the conversion will support small 
businesses and economic revital-
ization in the surrounding area, 
‘‘(ee) the degree of local gov-
ernment support for the conver-
sion, and 
‘‘(ff) the readiness of the 
building for a qualified conver-
sion, and 
‘‘(II) which provides a procedure 
that the agency (or an agent or other 
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private contractor of such agency) will 
follow in monitoring for noncompli-
ance with the requirements of sub-
section (d) and in notifying the Inter-
nal Revenue Service of such non-
compliance. 
‘‘(B) BINDING ALLOCATION AGREEMENTS; 
REPORTING.—In making allocations of qualified 
conversion credit dollar amounts, each housing 
credit agency shall— 
‘‘(i) enter into binding agreements 
with taxpayers for the allocation of quali-
fied conversion credit dollar amounts, 
which agreements shall specify the amount 
of qualified conversion credit dollar amount 
allocated to the building and the terms for 
any modifications or withdrawal of such al-
location, and 
‘‘(ii) report to the Secretary, at such 
time and in such manner as the Secretary 
may require, the amount of allocations 
made with respect to any building. 
‘‘(C) STATE
EXTENDED
USE
REQUIRE-
MENTS PERMITTED PAST 30 YEARS.—For pur-
poses of this paragraph, a housing credit agen-
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cy’s plan shall not fail to be treated as a con-
version credit allocation plan merely because it 
includes, and nothing in this section shall be 
construed to limit a binding allocation agree-
ment from including, affordability or rent re-
striction requirements with respect to the build-
ing that apply for a longer period than the 30- 
year period described in subsections (d) and 
(g)(1)(B). 
‘‘(4) DEFINITIONS AND OTHER RULES.— 
‘‘(A) HOUSING
CREDIT
AGENCY.—The 
term ‘housing credit agency’ means, with re-
spect to any State, the housing credit agency 
authorized under section 42(h)(8) or such other 
agency as authorized by the State for purposes 
of this section. 
‘‘(B) ECONOMICALLY DISTRESSED AREA.— 
The term ‘economically distressed area’ means 
any area which— 
‘‘(i) has been designated as a qualified 
census tract under section 42(d)(5)(B)(ii) 
or as a difficult development area under 
section 42(d)(5)(B)(iii), or 
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‘‘(ii) meets the requirement of section 
301(a)(3) of the Public Works and Eco-
nomic Development Act of 1965. 
‘‘(C) STATE.—The term ‘State’ includes a 
possession of the United States. 
‘‘(D) OTHER RULES.—Rules similar to the 
rules of subparagraphs (A) and (B) of section 
42(h)(7) shall apply for purposes of this sec-
tion. 
‘‘(f) PROGRESS EXPENDITURES.—If the Secretary 
determines, on the basis of architectural plans and speci-
fications that a qualified conversion is reasonably expected 
to exceed 2 years, rules similar to the rules of section 
47(d) shall apply with respect to such conversion for pur-
poses of this section. 
‘‘(g) SPECIAL RULES FOR CERTAIN AREAS.— 
‘‘(1) QUALIFIED
CENSUS
TRACTS
AND
DIF-
FICULT
DEVELOPMENT
AREAS.—In the case of a 
qualified affordable housing building— 
‘‘(A) which is located in any area which is 
designated as a qualified census tract under 
section 42(d)(5)(B)(ii) or as a difficult develop-
ment area under section 42(d)(5)(B)(iii)), and 
‘‘(B) with respect to which during 30-year 
period beginning on the date on which such 
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building is placed in service by the taxpayer, 
not less than 20 percent of the residential units 
in the building are both rent-restricted and re-
served for individuals whose income is 60 per-
cent or less of the area median income, 
subsection (a) shall be applied by substituting ‘30 
percent’ for ‘20 percent’. 
‘‘(2) 
HISTORIC
PRESERVATION
IN
RURAL 
AREAS.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fied affordable housing building which is in a 
rural area and is part of an historic preserva-
tion project, the taxpayer may elect to sub-
stitute ‘35 percent’ for ‘20 percent’ under sub-
section (a) with respect to such portion of the 
aggregate qualified conversion expenditures 
taken into account under such subsection as 
does not exceed $2,000,000. 
‘‘(B) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) RURAL AREA.—The term ‘rural 
area’ shall have the meaning given such 
term under section 1393(a)(2). 
‘‘(ii) 
HISTORIC
PRESERVATION 
PROJECT.—The term ‘historic preservation 
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project’ means a qualified conversion which 
involves the certified rehabilitation of a 
certified historic structure. Whether con-
version of a certified historic structure in-
volves certified rehabilitation shall be de-
termined under rules similar to the rules of 
section 47(c)(2)(C). 
‘‘(h) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section, includ-
ing regulations or other guidance— 
‘‘(1) providing for the recapture of the credit 
determined under subsection (a) if the qualified af-
fordable housing building ceases to be a qualified af-
fordable housing building during the 30-year period 
beginning on the date that such building is placed 
in service by the taxpayer, 
‘‘(2) detailing any certifications required from 
the taxpayer or any housing credit agency of a 
State, 
‘‘(3) with respect to the application of sub-
section (b)(4), 
‘‘(4) with respect to information reporting on 
allocations of qualified conversion credit dollar 
amounts, 
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‘‘(5) providing rules for making a determination 
as to whether an area is described in subsection 
(e)(4)(B), and 
‘‘(6) which encourages housing credit agencies 
to allocate, to the extent practicable, qualified con-
version credit dollar amounts to non-metropolitan 
counties within a State in proportion to the non- 
metropolitan population of the State, but only to the 
extent it is demonstrated within such non-metropoli-
tan counties that there are sufficient qualified con-
version expenditures to warrant such allocations.’’. 
(b) 
TRANSFERABILITY
OF
CREDIT.—Section 
6418(f)(1)(A) of such Code is amended by adding at the 
end the following new clause: 
‘‘(xii) The affordable housing conver-
sion 
credit 
determined 
under 
section 
48F.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 46 of such Code is amended in 
paragraph (5) by striking ‘‘and’’ at the end, in para-
graph (6) by striking the period at the end and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(7) the affordable housing conversion credit.’’. 
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(2) Section 49(a)(1)(C) of such Code is amend-
ed by striking ‘‘and’’ at the end of clause (v), in 
clause (vi) by striking the period at the end and in-
serting ‘‘, and’’, and by adding at the end the follow 
new clause: 
‘‘(vii) the basis of any property which 
is being converted as part of a qualified 
conversion under section 48F.’’. 
(3) Section 50(a)(2)(E) of such Code is amend-
ed by striking ‘‘or 48E(e)’’ and inserting ‘‘48E(e), 
or 48F(f)’’. 
(4) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 of subtitle A of 
such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 48F. Affordable housing conversion credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to qualified affordable housing 
buildings (as defined in section 48F of the Internal Rev-
enue Code of 1986, as added by this section) placed in 
service after the date of the enactment of this Act. 
SEC. 6. LIHTC BOOST FOR EXTREMELY LOW-INCOME 
HOUSEHOLDS. 
(a) IN GENERAL.—Section 42(d)(5) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
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‘‘(C) INCREASE IN CREDIT FOR PROJECTS 
DESIGNATED
TO
SERVE
EXTREMELY
LOW-IN-
COME HOUSEHOLDS.—In the case of any build-
ing— 
‘‘(i) 20 percent or more of the resi-
dential units (determined as if the imputed 
income limitation applicable to such units 
were 30 percent of area median gross in-
come) in which are designated by the tax-
payer for occupancy by households the ag-
gregate household income of which does 
not exceed the greater of— 
‘‘(I) 30 percent of area median 
gross income, or 
‘‘(II) 100 percent of an amount 
equal to the Federal poverty line 
(within 
the 
meaning 
of 
section 
36B(d)(3)), and 
‘‘(ii) which is designated by the hous-
ing credit agency as requiring the increase 
in credit under this subparagraph in order 
for such building to be financially feasible 
as part of a qualified low-income housing 
project, 
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subparagraph (B) shall not apply to the portion 
of such building which is comprised of such 
units (determined in a manner similar to the 
unit fraction under subsection (c)(1)(C)), and 
the eligible basis of such portion of the building 
shall be 150 percent of such basis determined 
without regard to this subparagraph.’’ 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to buildings which receive alloca-
tions of housing credit dollar amount after the date of en-
actment of this Act, or in the case of buildings that are 
described in section 42(h)(4)(B) of the Internal Revenue 
Code of 1986, for obligations that are part of an issue 
the issue date of which is after December 31, 2025. 
SEC. 7. RENTER TAX CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 36B the fol-
lowing new section: 
‘‘SEC. 36C. RENTER TAX CREDIT. 
‘‘(a) IN GENERAL.—In the case of an individual who 
leases the individual’s principal residence (within the 
meaning of section 121) during the taxable year and who 
pays rent with respect to such residence in excess of 30 
percent of the taxpayer’s adjusted gross income for such 
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taxable year, there shall be allowed as a credit against the 
tax imposed by this subtitle for such taxable year an 
amount equal to the applicable percentage of such excess. 
‘‘(b) CREDIT LIMITED BY 100 PERCENT OF SMALL 
AREA FAIR MARKET RENT.—Solely for purposes of deter-
mining the amount of the credit allowed under subsection 
(a) with respect to a residence for the taxable year, there 
shall not be taken into account rent in excess of an 
amount equal to 100 percent of the small area fair market 
rent (including the utility allowance) applicable to the resi-
dence involved (as most recently published, as of the be-
ginning of the taxable year, by the Department of Housing 
and Urban Development). 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means the percentage deter-
mined in accordance with the following table: 
The applicable 
‘‘If the taxpayer’s adjusted gross 
income is: 
percentage is: 
Not over $25,000 ..............................................................
100 percent
Over $25,000, but not over $50,000 ................................
75 percent
Over $50,000, but not over $75,000 ................................
50 percent
Over $75,000, but not over $100,000 ..............................
25 percent
Over $100,000 ..................................................................
0 percent. 
‘‘(2) PARTIAL
YEAR
RESIDENCE.—The Sec-
retary shall prescribe such rules as are necessary to 
carry out the purposes of this section for taxpayers 
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with respect to whom a residence is a principal resi-
dence for only a portion of the taxable year. 
‘‘(3) RENT.—The term ‘rent’ includes any 
amount paid for utilities of a type taken into ac-
count for purposes of determining the utility allow-
ance under section 42(g)(2)(B)(ii). 
‘‘(4) MARRIED INDIVIDUALS FILING SEPARATE 
RETURNS.—In the case of individuals who are mar-
ried to each other, have the same principal resi-
dence, and do not file a joint return for the taxable 
year, the credit determined under this section with 
respect to each such individual shall be 50 percent 
of the amount of the credit which would be deter-
mined under this section if such individuals filed a 
joint return, unless such individuals agree on a dif-
ferent division of such credit (in such manner as the 
Secretary may provide) which does not aggregate to 
more 100 percent of such amount. 
‘‘(d) RECONCILIATION
OF CREDIT
AND ADVANCE 
PAYMENTS.—The amount of the credit allowed under this 
section for any taxable year shall be reduced (but not 
below zero) by the aggregate amount of any advance pay-
ments of such credit under section 7527B for such taxable 
year.’’. 
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(b) ADVANCE PAYMENT.—Chapter 77 of the Internal 
Revenue Code of 1986 is amended by inserting after sec-
tion 7527A the following new section: 
‘‘SEC. 7527B. ADVANCE PAYMENT OF RENTER TAX CREDIT. 
‘‘(a) IN GENERAL.—Not later than 6 months after 
the date of the enactment of the Rent Relief Act of 2023, 
the Secretary shall establish a program for making ad-
vance payments of the credit allowed under section 36C 
on a monthly basis to any taxpayer who— 
‘‘(1) the Secretary has determined will be al-
lowed such credit for the taxable year, and 
‘‘(2) has made an election under subsection (c). 
‘‘(b) AMOUNT OF ADVANCE PAYMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the amount of the monthly advance payment of 
the credit provided to a taxpayer during the applica-
ble period shall be equal to the lesser of— 
‘‘(A) an amount equal to— 
‘‘(i) the amount of the credit which 
the Secretary has determined will be al-
lowed to such taxpayer under section 36C 
for the taxable year ending in such applica-
ble period, divided by 
‘‘(ii) 12, or 
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‘‘(B) such other amount as is elected by 
the taxpayer. 
‘‘(2) APPLICABLE
PERIOD.—For purposes of 
this section, the term ‘applicable period’ means the 
12-month period from the month of July of the tax-
able year through the month of June of the subse-
quent taxable year. 
‘‘(c) ELECTION OF ADVANCE PAYMENT.—A taxpayer 
may elect to receive an advance payment of the credit al-
lowed under section 36C for any taxable year by including 
such election on a timely filed return for the preceding 
taxable year. 
‘‘(d) INTERNAL
REVENUE
SERVICE
NOTIFICA-
TION.—The Internal Revenue Service shall take such 
steps as may be appropriate to ensure that taxpayers who 
are eligible to receive the credit under section 36C are 
aware of the availability of the advance payment of such 
credit under this section. 
‘‘(e) REGULATIONS.—The Secretary may prescribe 
such regulations or other guidance as may be necessary 
or appropriate to carry out the purposes this section.’’. 
(c) CLERICAL AMENDMENTS.— 
(1) IN
GENERAL.—The table of sections for 
subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by 
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inserting after the item relating to section 36B the 
following new item: 
‘‘Sec. 36C. Renter tax credit.’’. 
(2) ADVANCE PAYMENT.—The table of sections 
for chapter 77 of such Code is amended by inserting 
after the item relating to section 7527A the fol-
lowing new item: 
‘‘Sec. 7527B. Advance payment of renter tax credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2023. 
(e) COMMUNITY OUTREACH.—Immediately upon the 
enactment of this Act, in addition to amounts otherwise 
available, there are appropriated out of any money in the 
Treasury not otherwise appropriated $50,000,000 to re-
main available until 5 years after the enactment of this 
Act for necessary expenses for the Internal Revenue Serv-
ice to support efforts to increase enrollment of eligible 
households in the Renter Tax Credit allowed under section 
36C of the Internal Revenue Code of 1986 (including the 
advance payment of such credit under section 7527B of 
such Code), including but not limited to program out-
reach, costs of data sharing arrangements, systems 
changes, forms changes, and related efforts, and efforts 
by Federal agencies to facilitate the cross-enrollment of 
beneficiaries of other programs in such Renter Tax Credit, 
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including by establishing intergovernmental cooperative 
agreements with States and local governments, tribal gov-
ernments, and possessions of the United States: Provided, 
that such amount shall be available in addition to any 
amounts otherwise available: Provided further, that these 
funds may be awarded by Federal agencies to State and 
local governments, tribal governments, and possessions of 
the United States, and private entities, including organiza-
tions dedicated to free tax return preparation. 
Æ 
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