NLBMDA breaks down the Biden budget
President Joe Biden has released his fiscal year (FY) 2024 budget request to Congress.
The proposed budget features several notable items for the National Lumber and Building Material Dealers Association (NLBMDA), including significant boosts in funding for the Low-Income Housing Tax Credit (LIHTC), the HOME Program, a new Neighborhood Homes Tax Credit, and numerous programs that would increase residential construction across the country.
Now that the White House has released its official budget request, Congress can begin drafting the FY 2024 appropriations bills for all federal agencies.
The NLBMDA has broken down some of the notable programs included in the budget request.
Low-Income Housing Tax Credit (LIHTC): LIHTC is the largest Federal incentive for affordable housing construction and rehabilitation. The budget invests $28 billion in expanding this tax credit in order to boost the supply of housing that is affordable for low-income renters. Specifically, the Budget permanently increases the allocation of tax credit states receive. It also reduces the private activity bond financing requirement from 50 percent to 25 percent in order to leverage more private capital into LIHTC deals and build more units of affordable housing and repeals the qualified contract provision and right of first refusal provision – both of which allowed some owners of LIHTC units to exit requirements to keep rents at affordable levels.
HOME Program: The Budget provides $1.8 billion for the HOME Investment Partnerships Program (HOME), an increase of $300 million over the 2023 enacted level, to construct and rehabilitate affordable rental housing and provide homeownership opportunities.
Down Payment Assistance: The budget provides $10 billion for a program to target down payment assistance to first-time homebuyers whose parents do not own a home and are at or below 120% of the area median income or 140% of the area median income in high-cost areas. Eligible activities would include costs in connection with acquisition such as down payment costs, closing costs, and costs to reduce the rates of interest on eligible mortgage payments.
New Neighborhood Homes Tax Credit: The budget proposes a new Neighborhood Homes Tax Credit, which would be the first tax provision to directly support building or renovating affordable homes for homeownership. At a cost of $16 billion over ten years, the credit would cover the gap between the cost of construction and the sale price for rehabilitated or newly constructed single-family homes in low-income communities, encouraging investment in homes that would otherwise be too costly or difficult to develop or rehabilitate – and spurring investment and economic activity in communities that have long suffered from disinvestment. The tax credit would be provided on the condition that the home is occupied by low- or middle-income homeowners.
Homeless Assistance Grants: To prevent and reduce homelessness, the budget provides $3.7 billion, an increase of $116 million over the 2023 enacted level, for Homeless Assistance Grants to meet renewal needs and expand assistance to approximately 25,000 additional households, including survivors of domestic violence, dating violence, sexual assault, stalking, and human trafficking and homeless youth.
Tribal Communities: The budget provides over $1 billion to fund tribal efforts to expand affordable housing, improve housing conditions and infrastructure, and increase economic opportunities for low-income families. Of this total, $150 million would prioritize activities that advance resilience and energy efficiency in housing-related projects.
