H.R. 893 — Working Families Housing Tax Credit Act

This section states the sense of Congress that (1) the working family housing tax credit under section 42A of the Internal Revenue Code of 1986 is a critical federal policy tool to encourage production of quality housing for teachers, firefighters, police officers, veterans, and working Americans; and (2) Congress should improve and enhance the credit by passing pro-housing legislation.

This section establishes a new working families housing tax credit under a new section 42A of the Internal Revenue Code (modeled on the low-income housing tax credit under section 42), equal to the applicable percentage of the qualified basis of each qualified working families building during the credit period. The applicable percentage is prescribed by the Secretary of the Treasury for the month a building is placed in service (or, if elected, the month of binding allocation agreement) to yield a present value over 15 years equal to 50% of qualified basis for new buildings and 60% for existing buildings, with minimums of 5% for non-federally subsidized buildings and 2% for federally subsidized buildings (zero for certain federally subsidized buildings unless also eligible for section 42 credit and tax-exempt bond financing). Qualified basis equals the smaller of the working families unit fraction (working families units divided by total residential rental units) or floor space fraction (floor space of working families units divided by total residential rental floor space) times eligible basis, which equals adjusted basis as of the close of the first credit year for new buildings and qualifying existing buildings (i.e., purchased after at least 10 years out of service and not previously placed in service by taxpayer or related person) and zero otherwise.

This section establishes a program under which the Secretary provides grants and below-market-rate loans, as appropriate, to local governments in rural and exurban areas for covered infrastructure projects—including electricity, water, sewers, local access roads, and other projects as determined appropriate—carried out in connection with qualified working families housing projects (terms as defined in IRC §42A). For electricity projects, the Secretary must prioritize clean energy; requirements similar to IRC §45(b)(7) (i.e., domestic content rules) apply; and $100 million is authorized to be appropriated.