S. 934 — American Housing and Economic Mobility Act of 2025

This section establishes a competitive grant program, to be administered by the Secretary of Housing and Urban Development (HUD) not later than one year after enactment, to award grants to eligible entities—States, units of general local government, and Indian tribes—to reform local land use restrictions and remove barriers to affordable housing production. Grant funds may be used for (1) any activities authorized under section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305), (2) any activities permitted under the Local and Regional Project Assistance Program (49 U.S.C. 6702), or (3) modernizing, renovating, or repairing facilities used by public elementary schools, public secondary schools, and public institutions of higher education (as defined in 20 U.S.C. 1001), including measures to promote physical, sensory, and environmental accessibility consistent with a recognized green building rating system. Grant applications must demonstrate that the eligible entity has carried out, or is carrying out, initiatives to expand the supply of well-located affordable housing—such as by-right development, revising parking and lot size requirements, density bonuses, inclusionary zoning, accessory dwelling units, local tax incentives, and tenant protections (e.g., right to counsel, just-cause eviction)—excluding changes to wage, labor, or antidiscrimination laws—and describe how proposed activities advance objectives in the entity's consolidated housing and community development plan. Construction work financed by grants is subject to Davis-Bacon prevailing wage requirements (40 U.S.C. ch. 31, subch. IV). The section authorizes appropriations of $2,00.

This section authorizes appropriations and makes direct appropriations for multiple affordable housing programs, including the following: (1) $48 billion annually for the Housing Trust Fund for FY2025 through 2034 (new authorization added to 12 U.S.C. 4568(a)), which provides grants to states to increase and preserve rental housing and homeownership opportunities for extremely low- and very low-income families, including homeless families; (2) $3 billion annually for the Capital Magnet Fund for FY2025 through 2034 (new authorization added to 12 U.S.C. 4569), which provides competitive grants to nonprofits and community development financial institutions to develop affordable housing; (3) $70 billion for the Public Housing Capital Fund for FY2025 (amending 42 U.S.C. 1437g(c)(2)(A)), which supports capital and management improvements for public housing agencies serving low-income families; (4) $2.5 billion for the Indian Housing Block Grant program for FY2025 and such sums as necessary for FY2026 through 2034 (from such sums as necessary for FY2009 through 2013; amending 25 U.S.C. 4117), which provides formula block grants to tribes for affordable housing activities; (5) $50 million for the Native Hawaiian Housing Block Grant program for FY2025 and such sums as necessary for FY2026 through 2034 (from such sums as necessary for FY2001 through 2005; amending 25 U.S.C. 4243), which supports housing development for Native Hawaiians; (6) for FY2025 rural housing programs under the Housing Act of 1949—from general Treasury funds—$420 million for section 502 direct single-family loans to low-income rural households (42 U.S.C. 1472), $54 million for section 514 farm labor housing loans (42 U.S.C. 1484), $420 million for section 515 rural rental housing loans for elderly and persons with disabilities (42 U.S.C. 1485), $75 million for section 516 farm labor housing grants (42 U.S.C. 1486), $75 million for section 523 self-help housing grants (42 U.S.C. 1490c), and $240 million for the Multifamily Preservation and Revitalization Demonstration Program; and (7) establishes the Middle Class Housing Emergency Fund, to award competitive grants to state housing finance agencies in states facing shortages of affordable rental or for-sale housing (i.e., rent or prices rising substantially faster than area median income over prior five years), for nonprofit acquisition or construction of units affordable to households up to 120% of area median income and anti-displacement measures (e.g., tenant legal aid, emergency rental assistance, anti-harassment enforcement); requires Davis-Bacon prevailing wages for construction labor.

This section states congressional findings recognizing the homeownership benefits provided by FHA, Fannie Mae, and Freddie Mac and establishes requirements, in new sections 259 and 260 of Title II of the National Housing Act (12 U.S.C. 1707 et seq.), to prioritize sales of FHA-acquired single-family residential properties and non-performing loans to owner-occupants or community partners (i.e., HUD-approved nonprofits). Section 259 requires the Secretary of Housing and Urban Development, not later than one year after enactment, to develop FHA programs ensuring that at least 75% of single-family REO properties—acquired after foreclosure or via the Claim Without Conveyance of Title program—are sold directly to owner-occupants or to community partners for rehabilitation and resale to owner-occupants; to issue guidelines for that program providing an exclusive bidding period for governmental entities, HUD-approved nonprofits, and owner-occupants; and to prohibit REO purchasers from reselling within 15 years via land installment contracts or other non-title-transfer mechanisms absent prior approval (thus, curbing predatory practices). Section 260 prohibits the Secretary from selling or transferring FHA-insured single-family non-performing loans except when the Mutual Mortgage Insurance Fund's capital ratio under section 205(f)(2) is substantially below the required level, no other restoration measures are available (as certified), and only the minimum necessary loans are sold; requires 90-day advance notice to borrowers and property owners detailing loss mitigation options and servicer actions; provides for judicial review of sales under the Administrative Procedure Act; bars auction sales until notice-and-comment rules address loan selection, borrower notice, loss mitigation review, bidder eligibility, post-sale guidelines, and purchaser reporting; and conditions insurance claim payments on lender/servicer certifications to the Secretary and borrower.

This section establishes a fund in the Treasury, administered by HUD, to provide grants of up to 3.5% of a property's appraised value (or 3.5% of the applicable FHA maximum principal obligation limit if higher) to eligible first-time, first-generation homebuyers (i.e., self-attesting individuals whose parents never owned a principal residence, excluding heir property, and whose spouse/domestic partner has not owned one in the prior three years; who also have not owned a principal residence in the prior three years, excluding heir property or divorce-related surrender) with incomes below 120% of area median income (140% in high-cost areas designated by the Secretary). The fund also supports related outreach, HUD-approved counseling for sustainable homeownership, and recordkeeping. Grants may be layered with other federal, state, local, public, private, or nonprofit down payment assistance and do not require an FHA-insured mortgage. This section appropriates such sums as necessary for FY2025 through FY2034; requires HUD regulations within one year, including verification methods and lender reimbursement options for closing; and amends the Real Estate Settlement Procedures Act to require program information in home-buying booklets and the National Housing Act to designate the program as a mortgage product.

This section establishes a formula grant program administered by the Secretary of Housing and Urban Development to provide funding to states for neighborhoods with an appraisal gap (i.e., census tracts where the median sales price of a dwelling unit is lower than the median cost to acquire and rehabilitate, or build, a new dwelling unit), including support for borrowers with negative equity in their primary residence. Funds may be used for (1) grants to borrowers to pay down arrears on affordable loans or principal to qualify for loan modifications, pay off second mortgages or home equity lines of credit or small-dollar mortgages, pay delinquent taxes or tax liens or water or sewer bills or liens, or pay for home repairs, maintenance, or code compliance modifications; and (2) programs to purchase or rehabilitate vacant or distressed properties to enhance neighborhood property values. Grants are allocated to states based on the number of borrowers with primary residences having negative equity and the share of appraisal gap neighborhoods in each state, with $5 billion authorized for FY2025.

This section revises the findings and purpose in section 802 of the Community Reinvestment Act of 1977 (CRA) to require regulated financial institutions to meet the credit, deposit, transaction, other financial services, and community development lending and investment needs of all local communities in which they are chartered or do business—including those where institutions make loans without accepting deposits or accept deposits without making loans—consistent with safe and sound operations. It also replaces the definitions in section 803 with new terms, including (1) assessment area, encompassing communities with deposit-taking branches, automated teller machines, retail offices, agents, or significant loan originations; (2) climate resiliency and disaster mitigation activities that aid low- and moderate-income or climate vulnerable communities in preparing for climate risks and disasters, in coordination with government or mission-driven nonprofits; (3) climate vulnerable communities facing heightened climate risks with limited adaptation capacity; (4) community benefits plan establishing measurable goals for loans, investments, and services in low- and moderate-income or underserved communities; and (5) community development, covering affordable housing for low- and moderate-income individuals, community services, integration-promoting activities, and economic development financing for small businesses or farms. (Thus, CRA evaluations may now consider a broader range of services and activities, with assessment areas extending beyond traditional branch footprints.)

This section amends the Federal Credit Union Act to facilitate Federal credit union service to underserved areas. Specifically, it (1) adds in section 101 a definition of "underserved area" as a local community, neighborhood, or rural district that is an investment area under the Community Development Banking and Financial Institutions Act of 1994 (meeting additional NCUA Board requirements) and underserved by other depository institutions (based on NCUA and federal banking agency data), or—for an existing Federal credit union—any geographic area previously approved as underserved with a service facility established before enactment; (2) requires in section 106 the NCUA Board to monitor Federal credit unions' adherence to significant unmet needs plans submitted under section 109(h); and (3) revises section 109 by (A) expanding the underserved area membership exception in subsection (c)(2) to allow inclusion of residents or businesses in such areas if the credit union is well capitalized or adequately capitalized and establishes ongoing services within 24 months (with automatic termination for noncompliance and Board termination authority for unmet needs plan failures), (B) requiring annual credit union reports on such members, facilities, and plan compliance (with NCUA publication of related data), (C) cross-referencing the exception in subsection (e)(2), and (D) adding subsection (h) to require community credit unions (under subsection (b)(3)) to submit a business plan with marketing to address demographic needs (especially underserved groups) and—for proposed communities spanning multiple jurisdictions with population over 2,500,000—public comment and hearing. Finally, it directs the NCUA Board to issue implementing regulations within one year of enactment.

This section revises limits on public welfare investments—i.e., those made directly or indirectly that promote public welfare primarily by benefiting low- and moderate-income communities or families (such as by providing housing, services, or jobs)—for national banks under 12 U.S.C. 24 (Eleventh) and state member banks under 12 U.S.C. 338a. Such investments by either type of bank must not expose the bank to unlimited liability; for national banks, the Comptroller of the Currency limits investments in any one project and aggregate investments, while state law further limits state member banks. For national banks, aggregate investments are limited as follows: (1) for banks not well capitalized (per 12 C.F.R. § 24.2(e) or successor), to the sum of 5% of capital stock actually paid in and unimpaired plus 5% of unimpaired surplus (waivable by Comptroller order to higher if no significant risk to the deposit insurance fund and bank is adequately capitalized, but not exceeding 15% of each); (2) for well capitalized banks, to 15% of each (waivable higher by Comptroller order if no significant risk), not exceeding 25% of each. Limits apply to investments by the bank and its subsidiaries. For state member banks, aggregate limits conform but are set by the Federal Reserve Board using well capitalized criteria in 12 C.F.R. § 208.43(b) or successor; the 15% and 25% tiers further require a Community Reinvestment Act examination rating (per 12 U.S.C. 2903) of "outstanding" or "satisfactory." Limits apply to investments by the bank and its subsidiaries.

This section establishes temporary eligibility for VA home loan guarantees for direct descendants (including legally adopted descendants) of deceased veterans who served on active duty from June 22, 1944, to April 11, 1968, and did not use a VA housing loan benefit during their lifetime, if the descendants are first-time homebuyers and first-generation homebuyers living as of enactment. (As background, the VA home loan guaranty program enables eligible veterans, servicemembers, and certain surviving spouses to obtain mortgages with no down payment, competitive rates, and other favorable terms.) This eligibility applies by treating such descendants as veterans under 38 U.S.C. §3701(b) and eligible borrowers under §3702(a)(2) during the period beginning one year after enactment and ending 10 years after VA prescribes required regulations (within 180 days of enactment), which must address verification using incomplete records and implementation if multiple descendants qualify.

This section amends the Fair Housing Act (FHA, 42 U.S.C. 3601 et seq.) to expand prohibited bases of discrimination in the sale, rental, financing, and brokerage of dwellings and related intimidation. Specifically, it (1) adds definitions in FHA section 802 for gender identity, marital status (as defined in 12 C.F.R. § 202.2 or successor), sexual orientation (i.e., homosexuality, heterosexuality, or bisexuality), source of income (e.g., expected continuing income from employment, government assistance including section 8 vouchers, gifts, pensions, or property sales), and veteran status (i.e., members of the uniformed services under 10 U.S.C. § 101 or veterans under 38 U.S.C. § 101); (2) revises FHA sections 804, 805, and 806 to insert "actual or perceived" before "race, color" wherever it appears and to replace "sex" with "sex (including sexual orientation and gender identity), marital status, source of income, veteran status"; (3) revises FHA section 808(e)(6) to make the same replacement of "sex"; (4) adds to FHA section 804(c) an exception permitting loan programs for veterans and federal housing assistance for veterans (e.g., section 8(o)(19) of the U.S. Housing Act of 1937, VA Homeless Providers Grant and Per Diem program); and (5) makes parallel changes to the FHA-related intimidation provision (42 U.S.C. § 3631). This section includes a rule of construction stating that the amendments do not imply any covered class lacked protection under prior law.

This section improves outcomes in housing assistance programs by (1) exempting tenant-based assistance under section 8(o) of the United States Housing Act of 1937 (i.e., Housing Choice Vouchers) from the termination of financial assistance and use restrictions applicable after September 30, 1997, to Indian housing developed or operated by Indian housing authorities under the 1937 Act; (2) expanding eligible uses of supplemental administrative fees under section 8(q)(2)(B) of the 1937 Act to include costs of assisting families with children or a member with a disability to move to lower-poverty, higher-opportunity neighborhoods (as determined by HUD based on objective, evidence-based criteria); (3) requiring public housing agencies (PHAs) administering the Housing Choice Voucher program in metropolitan areas to conduct location analyses of voucher holders at least every five years—considering families with children, households with disabilities, and other Fair Housing Act-protected groups—develop policies and regional strategies to increase access to higher-opportunity neighborhoods, incorporate them into administrative plans, and be assessed on performance by HUD; and (4) directing HUD, not later than one year after enactment, to establish policies enabling PHA consortia (excluding Moving to Work agencies) under section 13(a) of the 1937 Act to consolidate funding contracts for section 8(o) assistance and sections 9(d) and (e) assistance (i.e., voucher, public housing capital fund, and operating fund assistance) into single contracts.

This section specifies that, unless otherwise provided, all amendments and repeals in this title are to provisions of the Internal Revenue Code of 1986.

This section revises the federal estate tax by (1) replacing the rate table in 26 U.S.C. §2001(c) with new progressive rates of 55% on amounts up to $13 million, 60% on the excess over $13 million up to $93 million, and 65% on the excess over $93 million (from current progressive rates culminating in 40%); (2) reducing the basic exclusion amount to $3.5 million (from $10 million); and (3) imposing a new 10% surtax on the applicable amount—generally, the taxable estate plus adjusted taxable gifts—for estates exceeding $1 billion. The changes apply to estates of decedents dying, generation-skipping transfers, and gifts made after the date of enactment.

This section amends IRC §2702(b) to establish additional requirements for a grantor retained annuity trust (GRAT) retained annuity interest to qualify under the zero-valuation rule for gift tax purposes (previously, no such minimums applied). The requirements are (1) a term of not less than 10 years, (2) fixed annual amounts that do not decrease relative to any prior year during the first 10 years of the term, and (3) a remainder interest valued at 10% or more of the assets transferred to the trust as of the transfer date. The amendments apply to transfers made after the date of enactment.

This section establishes new IRC §2901 to apply estate and gift tax rules (chapters 11 and 12) to grantor trusts—i.e., trusts where the grantor or another person is treated as the owner of a trust portion for income tax purposes under IRC §§671-679 (subpart E). For applicable portions, it (1) includes all attributable assets in the deemed owner's gross estate at death, (2) treats any distributions to beneficiaries during the deemed owner's life as gifts, and (3) treats assets as a gift if the deemed owner ceases to be treated as such during life. The rules apply to (1) portions where the grantor is the deemed owner and (2) portions attributable to disregarded sales, exchanges, or comparable transactions by non-grantor deemed owners (including retained income, appreciation, and reinvestments net of consideration received); exceptions include trusts already includible in the deemed owner's estate or those the Secretary determines lack transfer tax avoidance as a significant purpose; amounts are reduced by the deemed owner's prior taxable gifts to the trust; and any tax is a liability of the trust. The amendments apply to trusts created on or after the date of enactment, contributions to pre-enactment trusts made on or after such date, and transactions described in §2901(b)(2) occurring on or after such date.

This section eliminates the generation-skipping transfer (GST) tax exemption—by setting the inclusion ratio to 1—for (1) any direct skip or taxable distribution to a non-exempt person; (2) any taxable termination occurring immediately after no exempt person remains a beneficiary of the trust. (As background, the GST tax imposes a 40% tax on transfers to persons two or more generations below the transferor or to trusts for such persons; each transferor may allocate a GST exemption amount—$13.61 million in 2024—to reduce the inclusion ratio to zero for covered transfers.) An exempt person is (1) a natural person assigned to a generation two or fewer generations below the transferor or whose date of birth precedes the trust's creation date; or (2) a trust in which all interests are held by such persons (disregarding any interest used primarily to postpone or avoid these rules). Pre-2026 trusts are deemed created on January 1, 2026; pour-over transfers between trusts take the earlier creation date of transferor or transferee trust (with iterative application for multiple transfers); and IRC §2653(a) generation rules do not apply. The section also repeals IRC §1433(b)(2) of the Tax Reform Act of 1986. (Thus, after enactment, the GST tax applies in full to transfers favoring great-grandchildren or further descendants, or persons born after a trust's (deemed) creation date.)

This section revises the annual gift tax exclusion for gifts to a fixed $10,000 per donee (from the current inflation-adjusted amount of $18,000 for 2024), eliminates the inflation adjustment by striking IRC §2503(c), and establishes a per-donor cumulative limit of $20,000 on exclusions for specified illiquid transfers (i.e., transfers in trust; of an interest in a passthrough entity; of an interest subject to a prohibition on sale; or of other property that cannot immediately be liquidated by the donee without regard to withdrawal, put, or similar rights). (Thus, a donor may exclude up to $10,000 of qualifying gifts to each donee but no more than $20,000 total in the aggregate for such illiquid transfers across all donees in a calendar year.) The changes apply to calendar years beginning after enactment.

This section disallows a step-up in basis at death under IRC §1014 for property (1) held in a grantor trust (i.e., where the transferor is treated as owner for income tax purposes under IRC §§671-679) and (2) not includible in the transferor's gross estate for estate tax purposes. (As background, IRC §1014 generally adjusts the basis of property included in a decedent's gross estate to its fair market value at death, minimizing capital gains tax for heirs on prior appreciation; thus, this change prevents such a step-up for grantor trust property that escapes estate tax.) The provision applies to transfers after the date of enactment and states that no inference may be drawn regarding prior transfers.

This section adds new IRC §2705 to Chapter 14 (special valuation rules in corporations and partnerships) to limit discounts and establish valuation rules for transfers of non-actively traded interests in entities (i.e., for estate, gift, and generation-skipping transfer tax purposes). Specifically, (1) if the transferor, transferee, and their family members control the entity immediately before the transfer, no discount is allowed for lack of control, lack of marketability, or any other reason (with control and family defined as in IRC §2704(c)); and (2) for any such transfer, nonbusiness assets (generally, assets not used in an active trade or business, including passive assets such as cash, stocks, debt, derivatives, real estate used in rental activities, royalties, commodities, and collectibles—subject to exceptions for certain working capital, hedges, and real property in which the transferor materially participates) held by the entity are valued as if transferred directly (with no discount allowed) and are excluded from valuing the transferred interest (with a look-thru rule applying to the entity's 10%-or-greater interests in other entities). Conforming amendments update the estate tax valuation provision (IRC §2031(b)) and the table of sections. The amendments apply to transfers after enactment.

This section establishes a new tax surcharge on estates and trusts equal to (1) 5% of modified adjusted gross income (MAGI) exceeding $200,000, plus (2) 3% of MAGI exceeding $500,000, for taxable years beginning after enactment. MAGI equals adjusted gross income (determined under IRC §67(e) and reduced by the charitable deduction under §642(c)) minus deductions for investment interest (§163(d)) and business interest (§163(j)); the surcharge exempts charitable trusts (i.e., those devoted exclusively to §170(c)(2)(B) purposes), is disregarded for most credits and the alternative minimum tax, and treats electing small business trusts as a single trust for AGI purposes. (Thus, for high-income estates and trusts—which are subject to compressed individual income tax brackets—this surcharge effectively increases marginal rates above these thresholds.) The section also amends various IRC provisions (e.g., §§453A(c), 904(b)(3)(E) and (d)(2)(F), 962(a), 1291(c), 1446(b), 6225(b) and (c), and 7519(b)) to include the surcharge rates in calculations of maximum tax rates for interest on deferred tax liabilities, foreign tax credit limitations, individual elections for corporate rates on Subpart F/PFIC income, partnership withholding, and required payments.

This section increases the maximum aggregate value of qualified farm, ranch, and closely-held business real property eligible for special use valuation under IRC §2032A(i.e., valuation at current use rather than fair market value for federal estate and gift tax purposes) to $3 million (from $750,000). It also revises the inflation adjustment for that limit by (1) changing the base year to 2026 (from 1998), (2) setting the base amount at $3 million (from $750,000), and (3) updating the reference calendar year to 2025 (from 1997). The changes apply to estates of decedents dying, and gifts made, after December 31, 2025.

This section modifies the estate tax exclusion for the value of land subject to qualified conservation easements (i.e., reduces the land's fair market value for estate tax purposes by up to 40% of the excess value attributable to the easement, capped at $500,000, to encourage farmland and open-space preservation). Specifically, it (1) increases the exclusion limitation to $2 million (from $500,000), and (2) increases the applicable percentage to 60% (from 40%). The changes apply to estates of decedents dying, and gifts made, after December 31, 2025.

This section doubles the number of dwelling units required to be accessible under 24 CFR 8.22 and 8.23 (or successor regulations) in housing constructed, altered, or otherwise assisted using amounts made available to the Secretary of Housing and Urban Development under this Act or amendments made by this Act. (As background, those regulations implement Section 504 of the Rehabilitation Act of 1973 by requiring a percentage of units in multifamily dwellings—typically 5%—to be accessible to persons with mobility impairments and visual/hearing impairments.)