SE Kansas News

U.S. Senators Jerry Moran, Mark Warner, Todd Young, and Peter Welch have reintroduced a bill aimed at amending the Internal Revenue Code. The proposed legislation seeks to clarify that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can participate in partnerships vital for low-income housing investments.

The current Internal Revenue Code has a provision that restricts investors partnering with Tax-Exempt Controlled Entities (TECEs) from accessing certain benefits such as accelerated depreciations, bonus depreciation, historic rehab tax credits, or specific energy credits that aid companies offering affordable housing tax credits. The new legislation intends to ensure that Fannie Mae and Freddie Mac are not bound by this rule, thereby safeguarding their involvement in essential partnerships for low-income housing.

"Housing affordability has a significant impact on rural Americans across the country," said one of the senators involved. "By making this technical change, rural housing investors that partner with Fannie and Freddie can confidently invest in affordable housing that is desperately needed in rural communities. I encourage my colleagues to support this bill so that we can continue to improve rural America by reducing housing costs."

Another senator highlighted the urgency of addressing the affordable housing crisis: "Far too many folks across Virginia – including those in rural communities – are suffering because of the affordable housing crisis. 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."

A third senator emphasized the necessity of building more units: "We can’t address our housing affordability crisis without building more units. By making one simple clarification, this bill will unlock much-needed new partnerships that are crucial for rural low-income housing investments."

In 2023, Senators Moran and Warner led efforts urging Treasury Secretary Janet Yellen to issue guidance clarifying that GSEs Fannie Mae and Freddie Mac are not considered TECEs.

An endorsement came from stakeholders working on rural community issues: "Rural communities face an unseen housing crisis that we work every day to address. This common-sense legislation will drive investment to critically needed affordable housing development and create more quality housing options in rural America, including rural communities we serve in the Midwest and Mid-Atlantic regions. We strongly endorse this bipartisan effort to make sure rural communities get the support they need to thrive. We are grateful to Senators Moran and Warner for their bipartisan leadership on this legislation and we encourage its swift adoption this year."

The importance of the Housing Credit program was also stressed: “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,” adding confidence that Senator Moran's and Senator Warner’s bill will enable Fannie Mae and Freddie Mac to efficiently meet underserved rural housing needs through the program.