Low-Income Housing Tax Credit Improvements in House-Passed Reconciliation Bill; House Appropriations Plans Its FY 2026 Work
(May 27, 2025) The reconciliation bill that passed the U.S. House of Representatives on May 22nd, the One Big Beautiful Bill Act, H.R. 1, includes provisions that LeadingAge supports to expand and improve the Low-Income Housing Tax Credit (LIHTC) program.
According to the National Council of State Housing Agencies, whose state housing finance agency members administer state LIHTC allocations, the bill “represents the largest increase in Housing Credit resources since Congress raised the caps on Housing Credits and Private Activity Bonds and indexed the caps for inflation 25 years ago.”
The bill would increase the LIHTC volume cap for 9 percent properties by 12.5 percent for 4 years, through calendar year 2029; lower the bond financing threshold to 25 percent for 4 percent LIHTC properties placed in service after Dec. 31, 2025, as long as the bonds financing the project have an issue date between Dec. 31, 2025 and Jan. 1, 2030; and allow state agencies to provide a basis boost of up to 30 percent for properties located in rural and Native American areas placed in service after Dec. 31, 2025 and before Jan. 1, 2030. These LIHTC changes will cost $14.1 billion over 10 years and, according to Novogradac, will result in about 527,000 homes.
Despite LeadingAge’s support for these provisions, it continues to find much more harm than good in H.R. 1 and continues to work to ensure the Senate does not follow the House reconciliation bill’s lead. “If enacted, the policies in the House-passed bill will have a devastating impact on millions of older adults and their families who rely on Medicaid and Medicare for health care and long-term care and services, and on our nonprofit provider members who serve them,” said LeadingAge on the bill after its House passage. “LeadingAge will continue to work with the Senate to oppose the House’s purposeful removal of at least 10 million people from their health insurance, cutting $500 billion from Medicare, and the slashing of $800 billion in federal Medicaid funding to states – actions that will shred the health safety net for older adults and ultimately drive up healthcare costs.”
“Recognize this for what it is: cold-hearted legislation that will have ugly consequences, essentially eliminating for vulnerable people the support they rely on, leaving them with few options. The Medicaid and Medicare programs, and the aging services infrastructure they support, help older Americans age with dignity, not desperation. They must be protected. We urge the Senate: do not follow in the House’s footsteps,” Katie Smith Sloan, president and CEO of LeadingAge, said in a May 22nd statement.
Members can follow all budget reconciliation developments through this LeadingAge serial post.
Meanwhile, on May 21st, House Appropriations Committee Chair Tom Cole (R-OK) released the markup schedule for the House’s fiscal year (FY) 2026 appropriations bills. The Transportation, Housing and Urban Development (HUD), and Related Agencies Subcommittee is scheduled to mark up its subcommittee bill on July 7th, with a full committee markup on July 10th. While a notice has not yet been issued, LeadingAge understands that the subcommittee’s hearing with HUD Secretary Scott Turner will likely be on June 12th.
The Labor, Health and Human Services (HHS), Education, and Related Agencies Subcommittee is scheduled to mark up its subcommittee bill on July 21st, with a full committee markup on July 24th. HHS Secretary Robert F. Kennedy, Jr. testified before the subcommittee on May 14th.
President Trump delivered a broad overview of his FY 2026 budget requests to Congress, dubbed his “skinny” requests because of lack of detail, on May 2nd. For HUD and HHS’s annually appropriated programs, the skinny request seeks deep cuts for both agencies (a 43.6 percent cut to HUD and a 26.2 percent cut to HHS).
See the House Appropriations Committee’s full schedule here.
Additionally, a May 23rd letter to Senate Appropriations Subcommittee on Transportation, HUD, and Related Agencies Chair Cindy Hyde-Smith (R-MS) and Ranking Member Kirsten Gillibrand (D-NY), led by longtime affordable housing champion Senator Jack Reed (D-RI) and signed by 37 senators, requests strong HUD funding for affordable housing for older adults in the FY 2026 appropriations bill. The letter requests full funding for contract renewals for the Section 202 Supportive Housing for the Elderly program, an additional $600 million for capital advances and operating subsidies for 2,000 new Section 202 homes to meet increasing need, $50 million to fund a new Older Adult Special Purpose Housing Choice Voucher program for 5,000 older adults, $10 million in Rental Assistance Demonstration conversion subsidy to support preservation of 3,000 Section 202 homes, and full funding to renew and expand Service Coordination in Section 202 housing.
“Higher costs for housing, food, and other necessities have strained budgets for many older Americans on fixed incomes. Last year, one in five people experiencing homelessness was aged 55 or older – a six percent increase from 2023 – while older adults have experienced some of the fastest growing rates of homelessness in recent years. Our request would help stem this crisis by creating a new Older Adult Special Housing Purpose Voucher program specifically to help low-income older Americans cover rising housing costs in the private market and increasing 202 housing funding to build more affordable housing for older adults. Together, these requests would ensure more older Americans have a safe, affordable place to live, both now and for the long-term,” the senators say in the letter.
LeadingAge is grateful for Senator Reed’s leadership and to all senators who joined the letter, which gained three senators compared to a somewhat similar letter sent for FY 2025 funding. Read the letter – which LeadingAge collaborated with Senator Reed to draft – here, and take action to support HUD’s FY 2026 funding here.
Contact: Annalyse Komoroske Denio, akomoroskedenio@leadingageny.org, 518-867-8866