Source: Governing

Date Published: 9/15/2025

Link: One Housing Assistance Program Congress Is Actually Expanding

The One Big Beautiful Bill Act (OBBBA), passed in July, expanded the Low-Income Housing Tax Credit (LIHTC), the federal government’s main tool for financing affordable housing, while simultaneously cutting other social programs. The law increased the amount of credits states receive and lowered the bond financing threshold needed to qualify for 4% tax credits, making it easier to finance more projects. These changes could support the development of up to 1.22 million additional rental homes over the next decade, though success depends on securing other financing sources, many of which face potential cuts. Since its creation in 1986, LIHTC has funded 3.7 million affordable units by blending public subsidies with private investment. While LIHTC expansion could help families access affordable housing, OBBBA will also cut programs such as Medicaid, food assistance, and HUD grants, straining the same low-income households. Therefore, advocates warn that housing production may stall if other supports are reduced. So, while the OBBBA provisions mark a significant step toward expanding affordable housing supply, their full impact will hinge on whether broader social safety nets and funding sources remain strong enough to support the low-income families these homes are meant to serve.