Neighborhood Homes Investment Act
Summary
H.R. 2854 would establish a federal tax credit program designed to encourage private investment in affordable housing development and rehabilitation. The bill would provide tax credits covering up to 40% of costs for new home construction and 50% of costs for owner-occupied home rehabilitation in economically distressed urban, suburban, and rural areas. State agencies would administer the program by awarding credits to developers through annual competitions, with at least 60% of credits targeted to economically challenged communities.
The bill aims to address housing shortages and affordability challenges by closing the "value gap"—the difference between what it costs to build or rehabilitate a home and what it can sell for in the market. If enacted, supporters project the program could result in approximately 500,000 homes built or substantially rehabilitated over ten years. The legislation includes safeguards such as price caps on eligible homes and income limits for eligible homebuyers to prevent gentrification. The bill is currently in committee and has bipartisan support with 49 cosponsors.
