Sen. Moran, Sen. Warner, Sen. Young, Rep. LaHood & Rep. Kildee Introduce Legislation to Increase Rural Housing Investment

WASHINGTON, D.C. - U.S. Senators Jerry Moran (R-Kan.) Mark Warner (D-Va.)and Todd Young (R.-Ind) and U.S. Representatives Darin LaHood (IL-16) and Dan Kildee (MI-08) today introduced legislation to amend the Internal Revenue Code to clarify that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are able to participate in partnerships that are crucial for low-income housing investments.

In 2023, Sens. Moran and Warner led 20 of their colleagues urging Treasury Secretary Janet Yellen to provide written guidance that clarifies that the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are not Tax-Exempt Controlled Entities (TECEs).

Current Internal Revenue Code contains a provision stating that investors partnering with TECEs are not entitled to certain benefits, including accelerated depreciations, bonus depreciation, historic rehab tax credits or certain energy credits that support companies offering affordable housing tax credits. This legislation 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.

"Housing affordability issues have a significant impact on rural Americans across the country," said Sen. Moran. "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. I encourage my colleagues to support this bill so that we can continue to improve rural communities in Kansas by reducing housing costs."

"Far too many folks across Virginia - including those in rural communities - are suffering because of the affordable housing crisis," said Sen. Warner. "We need an all-hands-on-deck approach to getting investments into rural communities and expanding housing options for low-income Americans. I've been continuously raising the alarm about the commonsense fix in the Preserving Rural Housing Investments Act. We must pass this bipartisan legislation so we can unlock investments in our rural communities and cut housing costs for hardworking Virginians."

"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."

"Affordable housing is vital for families in rural communities throughout Illinois," said Rep. LaHood. "To address the affordable housing crisis, we must strengthen tools to drive investments into low-income housing and expand options. 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."

"Our bipartisan bill, supported by Democrats and Republicans, will help expand rural affordable housing opportunities across Michigan," said Rep. Kildee. "By clarifying outdated rules in the tax code, we can protect investments in rural affordable housing in the small-town communities that need it the most."

You can read the bill text here.

"The members of the National Association of State and Local Equity Funds are not-for-profit providers of equity capital who are on the front lines financing affordable housing, including in difficult to serve rural areas," said Michelle Foster, Executive Director, NASLEF. "The residents we serve in small towns and rural areas are the most impacted by the uncertain interpretation of the tax-exempt controlled entity issue and we grateful to Senators Warner and Moran for their efforts to clarify this issue through this needed legislation. Senators Warner and Moran are rightfully focused on the needs of their rural constituencies and we hope this legislation can be enacted in the near future."

"Rural communities face an unseen housing crisis that we work every day to address," said Mark McDaniel, President and CEO of Cinnaire. "This common-sense legislation will help us bring investment to create more quality housing options in rural America. We strongly endorse this bipartisan effort to make sure rural communities get the support they need to thrive."

"The Housing Credit program is essential for building and preserving rental housing in rural America-the very communities that have some of our most dire affordable housing challenges," said Stockton Willions, Executive Director of National Council of State Housing Agencies. "Senator Moran and Senator Warner's bill will ensure Fannie Mae and Freddie Mac can continue to meet their statutory requirements to meet underserved rural housing needs in an efficient manner through the program."

"The need for safe, decent and affordable housing continues to grow," said John Wiechmann, President and CEO of MHEG. "Midwest Housing Equity Group, Inc. (MHEG) is committed to helping the rural Midwest meet its affordable housing needs. Low-Income Housing Tax Credit (LIHTC) equity investments through multi-investor funds has proven critical to ensuring robust rental housing preservation, production and investment in small-town America. To that end, we commend Senator Moran and Senator Warner for their bipartisan and commonsense legislation to ensure critical investments in rural housing continue. Otherwise, rural affordable housing production will struggle, and the small-town affordable housing crisis will get even worse."

"The Council for Affordable and Rural Housing applauds the efforts and leadership of Senators Warner and Moran on this issue," said the Council for Affordable and Rural Housing. "Having both Fannie Mae and Freddie Mac invest in Housing Credits is vital to bring needed capital for rural multifamily housing throughout the country. Funds will help in the preservation of the aging portfolio. We would urge passage of this bill."

# # #