House Introduces $1.5 Trillion Infrastructure Legislation
This week, the House Ways and Means Committee released their $1.5 trillion infrastructure proposal, the Moving Forward Act (H.R. 2). The House proposal includes investment for highways, bridges, transit, rail, airports, ports/harbors; schools and child care; local financing and community development; housing; broadband; drinking water and wastewater; clean energy; health care; U.S. Postal Service; and environment/public lands.
For affordable housing, H.R. 2 would strengthen and expand the Low-income Housing Tax Credit (Housing Credit) by enacting numerous provisions including but not limited to: establishing a permanent minimum 4 percent Housing Credit rate; expanding states’ Housing Credit allocations; reducing the “50 percent test” for bond-financing to 25 percent; and enacting basis boosts for properties serving extremely low-income households, those in rural communities and Indian lands, and bond-financed properties. The proposal would also increase the private activity bond cap ceiling, allowing states to issue more multifamily Housing Bonds, provides $100 billion for a number of affordable housing programs, and would also expand and make permanent the New Markets Tax Credit, and establish a new tax credit through the Neighborhood Homes Investment Act, to encourage the rehabilitation of vacant homes or construction of new homes in distressed areas.
Additionally, appropriations for other Housing Related Provisions in the Moving Forward Act include:
- $70 billion for Public Housing Capital Fund
- $10 billion for The Community Development Block Grant (CDBG) Program
- $5 billion for the Housing Trust Fund
- $5 billion for The HOME Program • $2.5 billion for the Capital Magnet Fund
- $2.5 billion for Housing for the Elderly-Section 202
- $2.5 billion for Housing for Persons with Disabilities-Section 811
- $1 billion for Rural Multifamily Preservation and Revitalization Demonstration Program
- $1 billion for Flood Mitigation Assistance Program
- Native American Housing Block Grant Program ($1 billion)
- $100 million for USDA Section 504 Single-Family Housing Repair Loans and Grants Program
The House is scheduled to vote on this legislation next week. To view a section-by-section summary of the Moving Forward Act, click here.
Key Senators Introduces Housing Credit Bill
On June 25, the Senate Finance Committee Ranking Member Ron Wyden (D-OR) and Senator Maria Cantwell (D-WA) introduced the Emergency Affordable Housing Act, which would seek to preserve and expand affordable housing amidst the COVID-19 pandemic and economic crisis. The bill includes several Housing Credit priorities, and several new Housing Credit proposals including: a permanent 4 percent Housing Credit rate, an increase in Housing Credit allocation, a lowering of the “50 percent test” for bond-financing, and a correction to Qualified Contracts. The bill is cosponsored by Senators Michael Bennet (D-CO) and Ben Cardin (D-MD). To view a section-by-section summary of the Emergency Affordable Housing Act, click here.
House Considers Bill Extending Pandemic Housing Protections
The Emergency Housing Protections and Relief Act (H.R. 7301) was introduced on June 24 in the House and would seek to prevent evictions, foreclosures, and unsafe housing conditions resulting from the COVID-19 pandemic. H.R. 7301 is a collection of the various emergency housing provisions already approved by the House in the HEROES Act, and includes emergency rental assistance, a national, uniform eviction moratorium, resources to prevent and respond to outbreaks among people experiencing homelessness, and other resources targeting efforts towards greater housing stability during and after the pandemic. The bill has been referred to the House Financials Services Committee and the Judiciary Committee for further consideration, with members expected to vote on the bill as early as next Monday, June 29.
To view the full text of the Emergency Housing Protections and Relief Act, click here.
Senators Seek to Fix Housing Development Appraisal Gap
On June 25, Senators Ben Cardin (D-MD) and Rob Portman (R-OH) introduced S. 4073, the Neighborhood Homes Investment Act (NHIA). This legislation would seek to revitalize housing in distressed neighborhoods by creating a federal tax credit to cover the “appraisal gap” that prevents single-family housing development in many low-income neighborhoods. Currently, development lacks in some urban and rural areas because the cost of purchasing and renovating homes is greater than the value of the sale price of homes. The bill creates a federal tax credit that covers the cost between building or renovating a home in these areas and the price at which they can be sold (appraisal gap). The legislation would also seek to help existing homeowners in these neighborhoods to rehabilitate and stay in their homes. The maximum credit amount is the lesser of 35% of total development costs (property acquisition + construction and/or rehabilitation) or 80% of the national median home sale price. NHIA tax credits would be awarded to project sponsors—developers, lenders, or local governments—through a competitive statewide application process administered by state housing finance agencies. Sponsors would use the credits to raise investment capital for their projects, and the investors could claim the credits against their federal income tax when the homes are sold and occupied by eligible homebuyers. State agencies would have annual allocation of either $6 per capita or $8 million, whichever is higher.
The bill would require that homes constructed or revitalized under the program must be sold to homeowners making less than 140 percent of the area median income. This would ensure that improved housing directly benefits members of the communities targeted by the new tax credit. In addition, homeowners receiving funds for rehabilitation of their property would have to remain in their homes for five years or face a penalty. The Neighborhood Homes Investment Act is co-sponsored by Senators Chris Coons (D-DE, Sherrod Brown (D-OH), Todd Young (R-IN) and Tim Scott (R-SC).
To view a section-by-section summary of the Neighborhood Homes Investment Act, click here.
Inspector General Asked to Investigate Exclusion of DACA Recipients from FHA Loans
On June 23, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chair of the Subcommittee on Oversight and Investigations, sent a letter to Rae Oliver Davis, Inspector General for the Department of Housing and Urban Development (HUD), requesting an investigation into HUD’s decision to exclude Deferred Action for Childhood Arrivals (DACA) recipients from the Federal Housing Administration (FHA) mortgage insurance program. The lawmakers stated that HUD may have violated the Administrative Procedure Act by failing to provide adequate notice of this policy change and a meaningful opportunity for the public to comment. Representative’s Waters and Green wrote that the new policy prohibiting DACA recipients from receiving FHA loans limits opportunities for homeownership in communities throughout America and disenfranchises individuals who are residing in the United States legally. To read the full letter to Inspector General Davis, click here.