HR6390-119

What This Bill Does

The Make Housing Affordable and Defend Democracy Act redirects fiscal policy away from immigration enforcement and toward housing affordability. One title rescinds large unobligated or available immigration-enforcement and border-related appropriations, including funds for border infrastructure, enforcement, detention, and related programs. The housing title rewrites Internal Revenue Code section 36 to create a first-time homebuyer credit up to $25,000, doubled to $50,000 for first-generation homebuyers, with income phaseouts at $300,000 for joint filers, $225,000 for heads of household, and $150,000 for other filers, plus a high-cost-area adjustment tied to conforming loan limits. It creates a starter home construction credit equal to 15 percent of qualified construction costs, or 30 percent when the home is sold to a first-time homebuyer, for homes no larger than 1,200 square feet and sold for no more than 80 percent of area median home price, with State housing-credit-agency allocation ceilings. It also creates a 20 percent affordable housing conversion credit for converting eligible commercial buildings into affordable housing, adds a LIHTC basis boost for projects with at least 20 percent extremely low-income units, creates a renter tax credit for rent above 30 percent of income subject to small-area fair-market-rent caps, and requires Treasury to build a monthly advance payment program for that renter credit.

Who Benefits and How

First-time homebuyers benefit from a refundable-style tax benefit up to $25,000, and first-generation buyers benefit from a larger $50,000 ceiling. Builders of modest starter homes benefit from a 15 percent construction credit, rising to 30 percent when selling to first-time buyers. Developers converting commercial buildings to affordable housing benefit from a 20 percent conversion credit. Extremely low-income tenants benefit if LIHTC projects receive a basis boost for reserving at least 20 percent of units for households at or below the greater of 30 percent of area median income or the poverty line. Renters paying more than 30 percent of income for housing benefit from a tax credit and potential monthly advance payments.

Who Bears the Burden and How

DHS, CBP, ICE, and border-infrastructure contractors lose or face cancellation of rescinded funds. Treasury and IRS must administer multiple new credits, income phaseouts, advance-payment rules, and anti-duplication provisions. State housing credit agencies must allocate starter-home credits and designate LIHTC projects needing the extremely low-income basis boost. Federal taxpayers bear the revenue cost of housing credits and the budgetary effects of rescissions.

Key Provisions

• Rescinds large immigration-enforcement and border-related appropriations.
• Creates a first-time homebuyer credit up to $25,000 and a first-generation homebuyer credit up to $50,000.
• Adds income phaseouts and a high-cost-area adjustment for the homebuyer credit.
• Creates a starter home construction credit of 15 percent, or 30 percent for homes sold to first-time buyers, for homes up to 1,200 square feet and priced at no more than 80 percent of area median home price.
• Creates a 20 percent credit for converting eligible commercial buildings into affordable housing.
• Adds a LIHTC basis boost for projects with at least 20 percent extremely low-income units.
• Creates a renter tax credit for rent above 30 percent of income and requires monthly advance payments.