Affordable Housing Bond Enhancement Act
Ask: We ask MS CODEL members to cosponsor the Affordable Housing Bond Enhancement Act
The Affordable Housing Bond Enhancement Act, introduced on April 29, 2025, by Senators Catherine Cortez Masto (D-NV) and Bill Cassidy (R-LA), enacts several of NCSHA’s long-standing priorities for strengthening the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs. Notable provisions include increasing the MRB home improvement loan limit, allowing MRBs to be used to fund refinancing loans, providing HFAs additional flexibility in how they utilize carryforward housing bond authority, and simplifying how a borrower’s MCC benefit is calculated.
Key Points on the Affordable Housing Bond Enhancement Act
- The AHBEA would expand the supply of affordable homes and improve access to homeownership for low- and moderate-income home buyers through simple and impactful improvements to the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs.
- The AHBEA would update outdated rules, such as a limit on home improvement loan size that has not been adjusted — even to count for inflation — in more than four decades; thus, allowing homeowners to prevent their homes from falling into disrepair, make modifications to allow them to age in place, or repair damage resulting from natural disasters or other events when insurance payouts are insufficient.
- The AHBEA is fiscally responsible, cost-efficient legislation that does not add additional PAB authority but instead provides states flexibility so they can more efficiently use the PAB authority already provided to them under law.
- This legislation would free up more private activity bond (PAB) authority for affordable housing, so it does not expire unused and make state usage of PAB authority more transparent and flexible, allow states to use MRBs to refinance existing loans, make MRB-financed home improvement loans feasible, and streamline MRB and MCC program rules.
Some of the changes in the bill include:
- Increasing the MRB home improvement loan limit from $15,000 to $75,000 and indexing it for inflation
- Allowing MRBs to be used for refinancing loans
- Providing HFAs additional flexibility in how they utilize Housing Bond authority
- Simplifying how a borrower’s MCC benefit is calculated
- Reducing the time period for the MRB and MCC recapture tax from nine years to five
- Extending the amount of time HFAs can use converted MCC authority from two years to four
- Allowing HFAs to reconvert MCC authority back into MRBs two years after the conversion, rather than one
This bipartisan legislation has been endorsed by the National Association of REALTORS, National Association of Home Builders, Mortgage Bankers Association, and LISC.
