Members of Congress recently reintroduced the Affordable Housing Credit Improvement Act of 2025 (AHCIA), a bipartisan bill designed to significantly expand and modernize the Low-Income Housing Tax Credit. Backed by over 100 cosponsors and widespread support from housing advocates, the bill would increase credit allocations by 50 percent over two years, streamline development hurdles, and better target underserved communities. If enacted, the AHCIA could finance nearly 1.6 million additional affordable rental homes in the coming decade.

Key provisions: The reintroduced AHCIA includes several key provisions designed to increase the LIHTC’s impact, remove persistent barriers, and extend its reach:

• Credit expansion. The AHCIA proposes a 50 percent increase in annual LIHTC allocations.
• Lower financing barriers. The bill would reduce the Private Activity Bond financing threshold from 50 percent to 25 percent, unlocking more access to the 4 percent Housing Credit for projects that might not otherwise qualify.
• Targeted help. Basis boosts would incentivize developments for extremely low-income households, rural residents, and Native American communities. And enhanced access is built into the legislation for students, veterans, and survivors of domestic violence and trafficking.
• Program streamlining. AHCIA includes changes to streamline compliance, remove local vetoes that can delay projects, and allow greater flexibility for preservation and rebuilding efforts.

The bottom line: The reintroduction of the AHCIA may be signal that both Congress and the housing sector are ready to tackle America’s rental affordability crisis. The main differences between the prior version introduced in the 118th Congress and the current one are mostly technical clarifications, updates to effective dates, and some adjustments in provisions related to data transparency and land use. The substantive policy provisions remain largely the same across both versions. The bill has record bipartisan support in the House with more than 100 original cosponsors from over 30 states and a Senate companion bill is expected soon.