HR7414-119

What This Bill Does

The Affordable Housing Bond Enhancement Act makes a package of Internal Revenue Code changes for private activity bonds, mortgage revenue bonds, and mortgage credit certificates. Treasury must report annually to congressional committees on state volume caps, carryforwards, total bond authority, private activity bond issuance by purpose, expired carryforwards, and unused excess amounts, using electronic issuer reporting and limited disclosure authority. Issuing authorities can transfer or redesignate certain carryforward bond authority within a state for qualified mortgage bonds, mortgage credit certificates, or multifamily exempt facility bonds. The bill allows certain income-qualified borrowers to refinance through mortgage revenue bonds, raises qualified home-improvement loan financing limits from $15,000 to $75,000 with inflation indexing, shortens the recapture-tax period from nine to five years, changes mortgage credit certificate rates to 1 to 5 percent with different annual rates allowed, extends how long MCCs can remain effective, allows revocation of MCC elections by the end of the next calendar year, reduces public notice from 90 to 30 days, and shifts reporting from lenders to MCC issuers.

Who Benefits and How

State housing finance agencies, local issuing authorities, affordable housing developers, low-income homebuyers, mortgage-credit-certificate users, and homeowners needing repairs benefit from more flexible bond authority and higher home-improvement financing limits. Congressional tax and housing committees benefit from annual volume-cap transparency. Borrowers who meet mortgage revenue bond income and residence rules benefit from refinancing access and shorter recapture exposure.

Who Bears the Burden and How

Treasury and IRS must collect electronic issuer data, disclose information to committees, write rules, adjust inflation limits, administer revised recapture and MCC formulas, and manage issuer reporting. State and local issuing authorities must provide annual data, manage transfers and redesignations, and adjust public notices and MCC election procedures. Federal taxpayers bear revenue risk from expanded tax-favored housing finance and reduced recapture.

Key Provisions

• Requires Treasury annual reports on state private activity bond volume caps, carryforwards, issuance by purpose, expired amounts, and unused excess authority.
• Allows housing-related transfer or redesignation of carryforward bond authority within a state for qualified mortgage bonds, mortgage credit certificates, and multifamily exempt facility bonds.
• Allows income-qualified mortgage revenue bond refinancing and raises qualified home-improvement loan financing limits from $15,000 to $75,000 with inflation indexing.
• Shortens mortgage revenue bond recapture rules from nine years to five years and modifies mortgage credit certificate rates and annual calculations.
• Extends MCC timing, allows later revocation of MCC elections, reduces public notice to 30 days, and shifts reporting from lenders to issuing authorities.