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On Friday, November 19, 2021, The House of Representatives passed the Build Back Better (BBB) Act that included a $150 billion investment in affordable housing. The bill includes $12 billion to expand the Low-Income Tax Credit and $6 billion for a new initiative, the Neighborhood Homes Investment Act.

The U.S. Senate Finance committee released on December 11, 2021 their own text of the Build Back Better (BBB) Act. See the Senate Finance Committee bill text here. The Senate’s text differs from the House’s version in that it includes language that ensures that the housing credit cap increase goes to 2025 and clarifies the provision authorizing a basis boost for buildings serving extremely low-income (ELI) households.

Affordable Housing Provisions in the Build Back Better (BBB) Act:

Housing Credit Cap Increase

  • 2021- $2.81 per capita and a $3.25M small-state minimum
  • 2022 – $2.93 per capita and a $3.34M small-state minimum
  • 2023 – $2.98 per capita and a $3.43M small-state minimum
  • 2024 – $3.04 per capita and a $3.50M small-state minimum
  • 2025 – $3.86 per capita and a $4.48M small-state minimum

Neighborhood Homes Credit program

  • Awards credits to projects that are new construction or substantial rehabilitation of affordable, owner-occupied housing in distressed neighborhoods
  • 2022 – 2024: the greater of $3 per capita or $4 million 2023 – $2.98 per capita with a $3.43M small-state minimum
  • 2025 – $6 per capita with a $8M small-state minimum

Other Housing Credit Provisions

  • Buildings that reserve 20% of their total units for extremely low-income households (ELI) will receive a 50 percent basis boost for the basis associated with the ELI units, and an 8 percent set-aside for ELI properties.
  • Obligations issued from 2022 through 2026 will have a lower bond-financing threshold from 50 to 25 percent.
  • Allow the usage of Section 48 Investment Tax Credit for renewable energy without reduction in housing credit basis.

The bill includes funding for the following programs in the housing section:

  • $15 billion for the Housing Trust Fund through FY 2026
  • $10 billion for HOME available through FY 2026.
  • $65 billion for formula- and needs-based public housing
  • $25 billion for the HOME Investment Partnerships Program to construct and rehabilitate affordable homes for low-income families, and $750 million for a new Housing Investment Fund to leverage private-sector investments to create and preserve affordable homes.
  • $24 billion for housing choice vouchers and support services, including for individuals at risk of homelessness and for survivors of domestic violence and sexual assault.
  • $10 billion to offer down payment assistance to first-generation home buyers, and $5 billion for a home loan program to subsidize 20-year mortgages for first-generation home buyers.
  • $1.75 billion for a new initiative called the Unlocking Possibilities Program that will provide grants to communities for housing planning activities, including streamlining regulatory requirements, reforming zoning codes
  • $5 billion to address lead paint and other health hazards in housing for low-income families.
  • $3.05 billion for the Community Development Block Grant
  • $3 billion for a new Community Restoration and Revitalization Fund offering competitive grants to local partnerships led by nonprofits for accessible housing and neighborhood revitalization initiatives.
  • $2 billion for rural rental housing
  • $2 billion for a new grant program to make energy efficiency upgrades to affordable housing.
  • $700 million for the Fair Housing Initiatives Program and $100 million for the Fair Housing Assistance Program.
  • $1.6 billion for revitalization of distressed multifamily housing properties
  • $1 billion for project-based rental assistance
  • $100 million for capacity building
  • $500 million for Section 811 Housing for Persons with Disabilities
  • $500 million for Section 202 Housing for the Elderly
  • Increases each individual Federal Home Loan Bank’s (FHLB) contribution to their Affordable Housing Programs (AHP) from 10 to 15 percent of the previous year’s net income for 2022 through 2027. The bill also requires that the aggregate contributions from the FHLBs to their AHPs be at least $100 million each year during that time period.