The 21st Century Road to Housing Act (H.R. 6644) has passed Congress and is headed to President Trump for signature. While the bill does not directly amend the Internal Revenue Code, there are provisions that could have tax consequences. Up to this point, the bill has gone back and forth between the House and Senate as they negotiated various portions of the bill. Ultimately, the passed version of the bill includes:
- Increasing Housing in Opportunity Zones (OZs): While the tax benefits of OZs are unchanged, the bill provides for the HUD Secretary to consider OZ status when providing applicants HUD grants.
- Affordable Housing Development Support: Various provisions were included that impact those constructing affordable housing, including The Community and Investment Prosperity Act (applicable to banks investing in affordable housing), the Whole-Home Repairs Act (providing loans and grants for home repairs), and the Revitalizing Empty Structures into Desirable Environments (RESIDE) Act (promoting conversion of vacant property to affordable housing).
- HOME Investment Partnerships Reauthorization and Reform Act: This act makes changes to and reauthorizes the HOME Investment Partnership Program.
- Community Bank Provisions: Various provisions impact the role of community banks in affordable housing.
- Institutional Investor Cap: Certain “large institutional investors” (controlling 350 or more single-family homes (with exceptions)) can no longer purchase (directly or indirectly any single-family home). “Excepted purchases” to this rule includes build-to-rent programs.
- Manufactured Housing Definition Change: The term “manufactured housing” expanded to include units not built on a permanent chassis.
More to come about this bill, possible tax implications, and action items surrounding the included changes. Be sure to subscribe to our FORsights and follow our podcast Tackling Tax for more.