MBA Announces Support for H.R. 7024, the Tax Relief for American Families and Workers Act of 2024
On Jan. 16, Sen. Ron Wyden, D-Ore., and Rep. Jason Smith, R-Mo., released H.R. 7024, the Tax Relief for American Families and Workers Act of 2024. The Mortgage Bankers Association strongly supports the bipartisan, bicameral bill.
“The housing proposal you have put on the table builds on what we know works: the Low-Income Housing Tax Credit (Housing Credit) program,” MBA and 87 other organizations said in a joint letter to Senate Finance Committee Chairman Wyden and House Ways and Means Committee Chairman Smith. “For nearly 40 years, the Housing Credit has been our nation’s most essential housing production program, relying on a public-private partnership model that transfers risk away from the taxpayer to the private sector.”
“Your proposal would result in the production and preservation of over 200,000 additional rental homes for low-income households,” the joint letter said. “While this investment alone does not solve the housing crisis, it is a huge step in the right direction at a time when these resources are desperately needed. The demand and the capacity are there, with shovel-ready, would-be housing developments just waiting for these resources.”
In a statement commending the proposed legislation, MBA President and CEO Bob Broeksmit, CMB, noted MBA and its members have long called for enacting tax provisions that address our nation’s housing affordability crisis and the acute shortage of homes for owning and renting. “We support this bill, particularly for its meaningful enhancements to the Low-Income Housing Tax Credit that will produce an estimated 200,000 additional rental units over the next two years,” Broeksmit said.
“Specifically, the increased state allocations for affordable housing projects and reduced tax-exempt bond financing requirement will help more borrowers and lenders to use the LIHTC program to construct and rehabilitate housing for low- and moderate-income households,” Broeksmit said. “The LIHTC program is a successful public-private partnership that has supported the production of nearly three million rental units since its inception.”
“We commend House Ways and Means Committee Chairman Jason Smith and Senate Finance Committee Chairman Ron Wyden for their bipartisan, bicameral work on this tax package and call on lawmakers to pass the proposal as soon as possible,” Broeksmit said.
In a separate letter to Sen. Wyden and Rep. Smith, MBA Senior Vice President of Legislative and Political Affairs Bill Killmer noted MBA strongly supports Title V of the bill, which restores the Low-Income Housing Tax Credit ceiling increase from 9 percent to 12.5 percent for calendar years 2023 through 2025, thereby allowing states to allocate more credits for affordable housing projects, and temporarily lowers the Private Activity Bond threshold test from 50 percent to 30 percent for 4 Percent LIHTC property projects with an issue date prior to 2026.
“Importantly, these changes, which include a key transition rule for buildings that have already received a portion of the bond authority they need to benefit from the 30 percent test, and also provide that acquisition/rehabilitation buildings in which the acquisition aspect of a development was placed in service prior to yearend 2023, will serve as a catalyst to help produce an estimated 200,000 new multifamily units nationwide over the next two years.”
Killmer noted Section 202 of H.R. 7024 extends the Tax Cuts and Jobs Act method of calculating adjusted gross income for the purpose of applying the limitation on business interest deductibility. “MBA supports this section of the bill,” he said in the letter. “MBA was pleased that the tax changes in 2017 preserved business interest deductibility for real estate, as that provision has helped the cost of financing for commercial real estate activity remain affordable.”
