Legislation Introduced to Clarify Fannie Mae and Freddie Mac Can Participate in Partnerships for Low-Income Housing Investments

CARH’s BROADCAST EMAIL—Legislative Alert

August 2, 2024

On August 1, Senators Jerry Moran (R-KS) and Mark Warner (D-VA) introduced legislation (S. 4933) to amend the Internal Revenue Code to clarify that the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are able to participate in partnerships that are crucial for low-income housing investments. Companion legislation was introduced in the House by Representatives Darin LaHood (R-IL-16) and Dan Kildee (D-MI-08). (A bill number has not yet been assigned to the House bill.) The press release from Senator Moran can be found here.

As stated in the press release, Senators Moran and Warner led 20 of their colleagues urging Treasury Secretary Janet Yellen to provide written guidance that clarifies that the GSEs are not Tax-Exempt Controlled Entities (TECEs). The current Internal Revenue Code contains a provision stating that investors partnering with TECEs are not entitled to certain benefits, including accelerated depreciations, bonus depreciation, historic rehab tax credits or certain energy credits that support companies offering affordable housing tax credits. This proposed legislation would clarify that Fannie Mae and Freddie Mac are not subject to this rule, therefore protecting their participation in partnerships that are crucial for low-income housing investments.

On the introduction of the legislation, CARH stated, “The Council for Affordable and Rural Housing applauds the efforts and leadership of Senators Warner and Moran on this issue. Having both Fannie Mae and Freddie Mac invest in Housing Credits is vital to bring needed capital for rural multifamily housing throughout the country. Funds will help in the preservation of the aging portfolio. We would urge passage of this bill.” CARH is working with other affordable groups to garner support for the bills, with the idea that it could be added to a comprehensive tax bill that might be considered after the November elections.

CARH is urging our members to contact your Senators and Congressman and urge them to co-sponsor this legislation. To contact your Senators, click here. To contact your Representative, click here. As soon as a bill number for the companion House bill has been assigned we will add the bill number to this update on our website.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.