Summary of NHIA Bill Changes: 118th vs. 119th Congress

Revisions from the 118th Congress (S.657/H.R.3140)

A.    State Credit Allocations – To better address the national backlog in housing production and rising development costs, the formula allocation of NHIA credits to states is increased from $7 per capita to $9 per capita, and the minimum state allocation is increased from $9 million to $12 million. 

B.    Addressing Current Market Conditions and Costs – Given rising development costs, the credit for new for-sale homes that can be claimed is now 40% of the total development costs, up from 35% in the prior legislation. Notwithstanding this increase, the credit amount remains capped at the difference between the total development costs and the final sales price of the home. The maximum sales price of homes also remains capped at four times the area median family income. These guardrails ensure that properties are not over-subsidized and remain modest and affordable for first-time homebuyers.

C.    Geographic Flexibility for States

Legislation from the 118th Congress: Requires that 80 percent of all NHIA investments be made in NHIA eligible communities, which have higher poverty rates, lower family incomes, and lower home values relative to the area medians. State agencies could use up to 20 percent of allocations in “other eligible communities” (including rural communities and areas impacted by natural disasters) that might not otherwise meet all three criteria of distress.

Legislation introduced in the 119th Congress: Requires that: (i) at least 60 percent of all NHIA investments be made in NHIA eligible communities; (ii) up to 20 percent may be made in “other eligible communities”; and (iii) up to 20 percent may be made in any other community identified by the state agency as having a shortage of owner occupied homes. States that receive the small state minimum allocations can use up to 40% of their credit allocations in any combination of items (ii) and (iii) above.

D.    Building Codes and Standards – Requires that the states promulgate standards with respect to construction quality that are consistent with building codes or other standards required by the state or local jurisdiction in which the project is located.

E.     Small Residential Builders and Remodelers – Requires state allocating agencies to: (i) provide educational outreach on application and compliance requirements, including for small residential builders and remodelers; and (ii) develop applications that will minimize, to the extent practicable, application costs and barriers to entry for small residential builders and remodelers.