Proposal directs housing financing to income-qualified rentals near transit

Each state's bond limit would rise by 30%, with the added amount reserved for qualifying rental housing bonds. At least 95% of each bond issue's net proceeds must fund rental projects in areas within one-half mile of specified public transit, bus, or rail stops or stations. Every occupant must have income at or below 120% of the area's median income. At least 20% of units must have limited rents and occupants with income at or below 50% of the area's median income. At least 10% of units must have limited rents and occupants with income at or below the higher of the federal poverty guideline or 30% of the area's median income. The poverty-guideline option does not apply to public housing agencies or projects in U.S. territories. The 30% rule would cover calendar years beginning after 2025 and bonds issued after December 31, 2025.

Tax-credit calculations would count 150% of eligible new-building costs or 150% of qualifying rehabilitation costs for existing buildings. A building qualifies when eligible transit-area housing bonds finance at least 25% of the combined tax basis of the building and its land. The percentage would rise to 200% when construction workers receive at least the local prevailing wage most recently set by the Secretary of Labor. This calculation would apply to buildings financed by bonds issued after December 31, 2025.

The federal government would put $30 billion into the Housing Trust Fund for each covered fiscal year. States distributing this money would give priority to projects in areas within one-half mile of specified public transit, bus, or rail stops or stations. A deadline referenced elsewhere in Housing Trust Fund law would not apply to this money. The funding would cover each fiscal year from 2026 through 2035, including both years.