Affordable Housing Credit Improvement Act of 2025

The Affordable Housing Credit Improvement Act of 2025 aims to address the national housing shortage by expanding and strengthening the Low-Income Housing Tax Credit (LIHTC). The bill proposes to increase the number of tax credits allocated to states by 50% over the next two years and would make a previous 12.5% credit increase permanent. These changes are designed to incentivize private investment in affordable housing, potentially supporting the creation or preservation of nearly 2 million additional rental units over the next decade.

Beyond increasing funding, the legislation proposes technical changes to make housing projects more financially viable. It would lower the threshold for projects financed by tax-exempt bonds to qualify for credits, reducing the amount of debt developers must carry. The bill also includes provisions to better serve specific populations, such as veterans, rural communities, and Native American groups, by offering "basis boosts" or extra credits for projects in those areas.

If enacted, the bill would also streamline administrative rules to help survivors of domestic violence and students access affordable housing more easily. By simplifying compliance and increasing available resources, the bill aims to lower rent burdens for low-income families and seniors who currently spend a large portion of their income on housing costs.