Federal Updates

 
 

The One Big Beautiful Bill Act is Signed by President Trump, Here’s How it Impacts Housing 

7/7/25 

President Trump signed the One Big Beautiful Bill Act into law on Independence Day following a chaotic house vote lasting through Thursday night. The massive spending bill cuts funding for safety net programs such as Medicaid and SNAP, while also extending the Trump Tax Cuts and providing historic investment in the Low-Income Housing Tax Credit.

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President Trump signed the One Big Beautiful Bill Act into law on Independence Day following a chaotic house vote lasting through Thursday night. The massive spending bill cuts money for safety net programs such as Medicaid and SNAP, while also extending the Trump Tax Cuts and providing historic investment in the Low-Income Housing Tax Credit.

So, here’s how the bill impacts housing:

Following strong bipartisan support for the Affordable Housing Credit Improvement Act, the reconciliation bill includes a major expansion to the Low-Income Housing Tax Credit and makes new provisions permanent. Total investment will be over $14 billion from 2026-2034.

The bill includes the following changes to the LIHTC:
• A permanent 12% increase in 9% low-income housing tax credit allocations • A reduction in the bond financing threshold test from 50% to 25% for 4% credits These changes can potentially finance over a million homes in the United States, with a significant percentage of those being in California.

Additionally, it would revamp opportunity zones by having states redesignate new zones every 10 years, beginning in 2027.

Senate Proposes Permanent Expansion of LIHTC

6/19/25 

The United States Senate has proposed a permanent expansion of the Low-Income Housing Tax Credit, a significant change from the House version which would have expanded it, but only until the end of the decade.

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The Senate Finance Committee has released the text for their version of the One Big Beautiful Act, which is the budget reconciliation legislation that recently passed the House of Representatives.

The Senate version cuts Medicaid even further than the House, retains deep cuts to SNAP, relaxes some of the Green Energy rollbacks, and decreases the State and Local Tax (SALT) deduction cap.

On housing, the Senate version of the bill expands on the progress that the House made in regards to the Low-Income Housing Tax Credit (LIHTC). In the Senate bill, the LIHTC allocation from nine percent increases to 12 percent (House bill increases to 12.5 percent and lowers the 50 percent bond test to 25 percent. However, instead of the provisions expiring at the end of the decade as the House proposed, these changes would be permanent. According to Novagradac, the changes in the bond test will finance over 1 million affordable homes over the next decade.

Other changes include making Opportunity Zones permanent and extending the phase-out period for green tax credits.

The One Big Beautiful Act has a long way to go before it will be passed and on the President’s desk. With disagreements over the SALT deduction cap, harsh Medicaid cuts, and the impact on the deficit, negotiations will continue to happen over the next few weeks.

The GOP has set an unofficial deadline of Jul 4, 2025 for when they want the One Big Beautiful Bill Act to pass, giving them a little amount of time to settle disagreements over key provisions of the bill.