ACRE Act of 2025

This bill adds a new tax provision (Section 139J) to the Internal Revenue Code, excluding interest income from certain rural and agricultural loans from taxable income for qualifying lenders. It directly affects banks, insurance companies, and farm credit entities that provide loans secured by rural or agricultural property (including qualifying single-family homes in rural areas), while excluding loans to foreign adversary entities (like those linked to China, Russia, or Iran). The law requires lenders to report on how this tax exclusion impacts loan interest rates, with a Treasury report due to Congress within five years. The policy change aims to reduce lenders' tax burden on these specific loans, potentially lowering costs for borrowers in rural communities.