H.R. 3964House119th Congress (2025-2027)In Committee

Affordable Housing Equity Act of 2025

To amend the Internal Revenue Code of 1986 to increase the low-income housing tax credit for projects designated to serve extremely low-income households.

AI-Generated Summary

Updated November 24, 2025 at 12:01 AM UTC

The Affordable Housing Equity Act of 2025 changes the tax code to give a bigger low‑income housing tax credit to developments that set aside a significant share of units for extremely low‑income families. By letting developers count 150% of the eligible building cost for those units, the bill aims to make such projects more financially viable. The credit increase kicks in for new allocations after the law takes effect.

Key Provisions

Adds a new rule that raises the low‑income housing tax credit for projects where at least 20% of the units are set aside for households whose total income is at or below the greater of 30% of the area median income or the federal poverty line.
The increase only applies if the housing credit agency determines that the boost is needed for the project to be financially feasible.
For the qualifying portion of a building, the amount of property value that can be used to calculate the credit is increased to 150% of its normal value, effectively raising the credit amount.
The higher credit applies to projects that receive credit allocations after the law is enacted, and to certain obligations issued after December 31, 2025.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 12, 2025

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HouseIntro Referral

Introduced in House

June 12, 2025

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 12, 2025

Bill Text

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Introduced in HouseIssued June 12, 2025

119th CONGRESS

1st Session

H. R. 3964

IN THE HOUSE OF REPRESENTATIVES

June 12, 2025

Mr. Gomez (for himself and Ms. DelBene) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to increase the low-income housing tax credit for projects designated to serve extremely low-income households.

Short title

This Act may be cited as the Affordable Housing Equity Act of 2025.

Increase in credit for certain projects designated to serve 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:

(C)

Increase in credit for projects designated to serve extremely low-income households

In the case of any building—

(i)

20 percent or more of the residential units (determined as if the imputed income limitation applicable to such units were 30 percent of area median gross income) in which are designated by the taxpayer for occupancy by households the aggregate 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 housing 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,

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 allocations of housing credit dollar amount after the date of enactment 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.