“A bill to amend the Internal Revenue Code of 1986 to establish a tax credit for neighborhood revitalization, and for other purposes.”
No CRS summary available for this bill.
This section sets forth congressional findings regarding the U.S. housing shortage, its disproportionate impact on low-income and distressed communities, the role of homeownership in building wealth and stability, the value gap impeding housing construction in distressed areas, and the potential of the Neighborhood Homes Investment Act to close financing gaps for development and rehabilitation. It expresses the sense of Congress that the neighborhood homes credit should revitalize distressed rural and urban communities, minimize application burdens on small businesses, and comply with the Fair Housing Act of 1968.
This section establishes a new Neighborhood Homes Credit under new IRC §42A (in subpart D of part IV of subchapter A of chapter 1), available to taxpayers for each qualified residence (i.e., a single-family house of 4 or fewer units, condominium unit, or cooperative unit located in a qualified census tract and part of a qualified project allocated by a neighborhood homes credit agency) sold in an affordable sale. The credit equals the lesser of (1) the excess of reasonable development costs (i.e., acquisition, construction, substantial rehabilitation, demolition, or remediation costs deemed necessary for financial feasibility) over the sale price (reduced by sales expenses), or up to 120% thereof if needed for feasibility; (2) 40% of eligible development costs (i.e., reasonable development costs excluding amounts for building/land acquisition exceeding 75% of total such costs); or (3) 32% of the national median sale price for new homes (per most recent census data). Reasonable and eligible development costs exclude amounts incurred before agency allocation (except building/land acquisition up to 3 years prior, subject to related-party limits), and substantial rehabilitation requires costs exceeding the greater of $25,000 or 20% of building/land acquisition costs. A qualified census tract is one meeting specified criteria on median family income (not exceeding area median or 80% thereof), poverty rate (≥130% or 150% of area rate), and owner-occupied home values (not exceeding area median or 80% thereof), depending on whether in a city of ≥50,000 population or a nonmetropolitan county.