To ensure critical investments in low-income housing, U.S. Sens. Jerry Moran (R-KS) and Todd Young (R-IN) joined U.S. Rep. Darin LaHood (R-IL) to unveil bipartisan, bicameral legislation that aims to address the lack of clarity around the Tax-Exempt Controlled Entity (TECE) status for Fannie Mae and Freddie Mac.
Specifically, the measure would amend the Internal Revenue Code to clarify that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac may participate in partnerships that are crucial for low-income housing investments by clarifying that Fannie Mae and Freddie Mac are not TECEs.
“Housing affordability issues have a significant impact on rural Americans across the country,” Sen. Moran said. “By making this technical change, rural housing investors that partner with TECEs can confidently invest in the affordable housing tax credits that many rural communities rely upon.”
Sen. Moran on Aug. 1 sponsored the Preserving Rural Housing Investments Act, S. 4933, with seven original cosponsors, including Sen. Young and U.S. Sens. Mark Warner (D-VA) and Shelley Moore Capito (R-WV). Rep. LaHood on Aug. 2 sponsored the identical H.R. 9267 with lead original cosponsor U.S. Rep. Dan Kildee (D-MI).
Currently, a provision in the Internal Revenue Code states that investors partnering with TECEs are not entitled to certain benefits, including accelerated depreciation, bonus depreciation, historic rehab tax credits, or certain energy credits that support companies offering affordable housing tax credits, according to a bill summary provided by the lawmakers.
Their proposed bill would clarify that Fannie Mae and Freddie Mac are not subject to this rule, therefore protecting their participation in partnerships that are crucial for low-income housing investments.
“We can’t address our housing affordability crisis without building more units,” said Sen. Young. “By making one simple clarification, this bill will unlock new partnerships that are crucial for rural low-income housing investments, bringing much-needed projects to our rural communities.”
“To address the affordable housing crisis, we must strengthen tools to drive investments into low-income housing and expand options,” added Rep. LaHood. “I am proud to introduce the bipartisan, bicameral Preserving Rural Housing Investments Act, which will help reduce housing costs for families and strengthen affordable housing in Illinois.”
The bill is endorsed by the National Association of State and Local Equity Funds, Cinnaire, the National Council of State Housing Agencies, Midwest Housing Equity Group Inc., the Council for Affordable and Rural Housing, and Enterprise Community Partners.
“I encourage my colleagues to support this bill so that we can continue to improve rural communities in Kansas by reducing housing costs,” Sen. Moran said.