On Friday, July 4th, President Trump signed the “One Big Beautiful Bill Act” (H.R. 1) – a sweeping budget reconciliation package that includes the most substantial expansion of federal affordable housing resources in 25 years. The bill narrowly passed through the House of Representatives on July 3rd, 217-214, with all Democrats and two Republicans voting no, and mirrors the version of the bill approved by the Senate on July 1st.
The housing credit provisions in the reconciliation bill include two long-sought reforms:
- A permanent 12% increase in 9% low-income housing tax credit (LIHTC) allocations, beginning in 2026.
- A permanent reduction in the 50% bond financing threshold to 25% for properties placed in served after December 31, 2025 – provided at least 5% of land and building costs are financed with bonds issued after that date.
Together, these changes are projected to finance 1.22 million additional affordable homes nationwide over the next ten years, according to Novogradac, a national professional services organization specializing in real estate, affordable housing, community development and renewable energy – 80,000 units from the 9% LIHTC expansion, and 1,143,000 units from the 4% bond threshold reduction.
Harris Beach’s Affordable Housing team is monitoring this development and related matters. For further details on how the expansion of the federal credits might impact your projects, or if you have questions for our housing lawyers, please reach out to attorney Michael A. Discenza at (212) 912-3607 and mdiscenza@harrisbeachmurtha.com; attorney Linnea Spagnoletti at (585) 419-8623 and lspagnoletti@harrisbeachmurtha.com; attorney Melanie C. Marotto at (716) 200-5230 and mmarotto@harrisbeachmurtha.com; or the Harris Beach attorney with whom you most frequently work.
Summer associate Ashanti Nelson contributed to this report.
This alert does not purport to be a substitute for advice of counsel on specific matters.
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.
