|On August 22, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced the Middle Income Housing Tax Credit Act of 2018, S. 3365, which would create a new state-administered tax credit, modeled after the Low Income Housing Tax Credit (Housing Credit), to stimulate the development of rental housing for middle-income households earning up to 100 percent of area median gross income (AMGI). Senator Wyden introduced similar legislation in 2016.
The new legislation would create a 15-year tax credit for 50 percent of the present value of qualifying costs, with a minimum Credit rate of 5 percent. As they do under the Housing Credit, the bill would require allocating agencies to provide no more Credit authority to a property than would be necessary for its financial feasibility. The bill would provide each state an allocation of $1 per capita in 2019 with a $1.14 million small-state minimum, with indexing for inflation each year thereafter. In each year, the state’s middle income Housing Credit ceiling would be increased by 5 percent, with the additional 5 percent reserved for rural areas. Like the Housing Credit program, the bill would require a 15-year compliance period and an additional 15-year extended use period.
If the Housing Credit allocating agencies does not use all of its middle income Housing Credit authority in any given year, the excess authority would be added to the state’s low income Housing Credit ceiling for the following year. The bill also contains a Sense of the Senate resolution encouraging Congress to pass the remaining unenacted provisions of the Affordable Housing Credit Improvement Act.
Wyden also introduced on August 22 the First-Time Homebuyer Credit Act of 2018, S. 3364, which would create a refundable first-time homebuyer tax credit equal to 2.5 percent of the home purchase price up a maximum of $10,000. The credit would phase out for homes selling for $600,000 to $700,000. The credit would also phase out for individual taxpayers with incomes between $80,000 and $100,000 and joint taxpayers with incomes between $160,000 and $180,000.
Senator Wyden’s press release on the bills notes, "My bills aim to remodel housing policy by targeting improvements to help American families struggling to pay soaring rents and trying to save for a down payment on their first home." Wyden’s office also released summaries of the Middle Income Housing Tax Credit Act and the First-Time Homebuyer Act.