New Homes Tax Credit Act

S 5196 establishes a new federal tax credit for investors who make cash contributions to housing development organizations building or renovating homes for low- and moderate-income buyers. The credit equals 7% of the investment in the first year and 8% in subsequent years, with annual funding limits ranging from $1 billion (2025) to $3.5 billion (2030-2031). To qualify, homes must be sold to buyers earning no more than 120% of local median income, and the housing development organization must ensure the home remains the buyer’s primary residence for five years. Annual reports will track project locations and residents’ income levels to monitor program effectiveness.