Low-Income Housing Tax Credit (LIHTC) – Improvement Proposals
Current understanding
The Low-Income Housing Tax Credit (IRC §42) subsidizes construction and rehabilitation of affordable rental housing via allocated federal tax credits claimed by investors in qualifying projects. The Affordable Housing Credit Improvement Act is a recurring bipartisan bill proposing to expand credit allocations, lower bond-financing thresholds, and modify eligibility rules; the 2025 iteration (HR2725) has been referred to House Ways and Means. If enacted, LIHTC investors and affordable housing developers would benefit from expanded credit availability; the federal government would forgo additional tax revenue.
Evidence log
- 2026-10-22 — LIHTC Security Act: 2025 — LIHTC Security Act (House, 119th): introduced and referred to the House Ways and Means Committee; adds another LIHTC-related proposal in the pipeline alongside the Affordable Housing Credit Improvement Act and carryback proposals. (novelty: 2)
- 2025-01-31 — Working Families Housing Tax Credit Act: 2025 — Working Families Housing Tax Credit Act (HR893, 119th): another housing tax credit proposal in the LIHTC-adjacent policy space, referred to Ways and Means, Energy and Commerce, and Transportation and Infrastructure. (novelty: 2)
- 2026-04-30 — Workforce Housing Tax Credit Act: cross-connection with workforce-housing-tax-credit-act: Both propose federal tax-credit mechanisms to subsidize affordable/workforce rental housing supply. (novelty: 2)
- 2026-07-23 — To amend the Internal Revenue Code of 1986 to provide an elective exception from the volume cap on tax-exempt bonds for certain exempt facility bonds for qualified residential rental projects, and for other purposes.: cross-connection with tax-exempt-bond-volume-cap-residential-rental: Private-activity bond volume cap governs the 4% LIHTC pathway; a volume-cap exception for qualified residential rental projects would materially expand affordable housing financing capacity alongside LIHTC. (novelty: 2)
- 2026-05-22 — Affordable Housing Credit Carryback Act: 2025 — Affordable Housing Credit Carryback Act (HR9012, 119th): would allow carryback of unused LIHTC credits, benefiting investors with insufficient current-year tax liability; referred to House Ways and Means. (novelty: 2)
- 2026-06-30 — Senior Accessible Housing Tax Credit Act of 2026: cross-connection with senior-accessible-housing-tax-credit: Both use federal tax credits as the policy instrument for housing supply/quality, but target different populations (age-based accessibility vs. income-based affordability). (novelty: 3)
- 2023-05-11 — Affordable Housing Credit Improvement Act of 2023: 2023 — Affordable Housing Credit Improvement Act of 2023 (HR3238): earlier 118th Congress iteration of the recurring bill; proposes to rename LIHTC, increase per-capita allocations, broaden eligibility, add tenant protections, and enhance credits for extremely low-income and bond-financed projects. (novelty: 2) (novelty: 2)
- 2025-04-08 — Affordable Housing Credit Improvement Act of 2025: cross-connection with transit-oriented-development-tax-incentives: Both are supply-side federal tax incentives aimed at expanding housing availability, targeting affordable rental units (LIHTC) and transit-adjacent development respectively. (novelty: 2)