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The Senate Finance Committee has unveiled its updated tax section of the Build Back Better bill that would bring a historic investment in affordable housing.

While it aligns closely with the House version, this early Senate proposal has several notable differences. Both call for increases to the annual 9% low-income housing tax credit (LIHTC) allocation, but the Senate version has an increase going through 2025 instead of 2024.

In addition, the Senate bill provides a permanent 50% basis boost for projects serving extremely low-income (ELI) households as well as requiring an 8% set-aside for properties for ELI properties, effective for buildings placed in service after Dec. 31, 2021. The bill also clarifies how to determine the portion of the building eligible for the boost.Like the House bill, it calls for lowering the 50% bond test to 25%.

To learn more about the Senate Finance Committee proposal, read summaries prepared by the Affordable Housing Tax Credit Coalition, the Housing Advisory Group, and The Action Campaign.