A bipartisan group of House of Representatives lawmakers has introduced the First-Time Homebuyer Affordability Act, legislation aimed at increasing access to affordable homeownership by exempting qualified mortgage bonds from existing private activity bond volume caps. The proposal would expand state and local housing finance agencies’ ability to issue tax-exempt mortgage revenue bonds, potentially lowering borrowing costs for first-time homebuyers while freeing additional bond capacity for affordable rental housing projects.
Key Takeaways
- Proposed Tax Code Change: The bill would remove qualified mortgage bonds from annual private activity bond volume limitations, eliminating competition between mortgage revenue bonds and other affordable housing financing tools for scarce allocation resources.
- Impact on Affordable Housing Finance: Affordable housing advocates say this change could increase funding availability for both homeownership programs and multifamily housing developments supported by 4% Low-Income Housing Tax Credits.
- Broad Industry Support: The legislation has garnered support from major housing and finance organizations, including the Mortgage Bankers Association, National Association of Home Builders, National Housing Conference, Council of Development Finance Agencies and RBC Capital Markets.
- Legislative Uncertainty: Although sponsored by bipartisan members of the House Ways and Means Committee, the bill currently lacks a Senate companion measure and faces an uncertain path forward, particularly given the reported absence of White House support.
Why It Matters
The proposal reflects Congress’s continuing focus on housing affordability and addresses a longstanding constraint in affordable housing finance: limited private activity bond capacity. If enacted, the legislation could significantly expand financing options for first-time homebuyers while indirectly increasing resources available for affordable rental housing production. However, as a standalone bill still awaiting committee action, its prospects remain uncertain and may ultimately depend on incorporation into broader tax or housing reform legislation.
Law Clerk Kate Silverstrim-Jensen contributed to this report.
Harris Beach Murtha’s Affordable Housing Industry Team is monitoring this legislation and what it could mean for real estate, redevelopment and affordable housing activity. If you have questions, please reach out to attorney Michael A. Discenza at (212) 912-3605 and mdiscenza@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.
