The One Big Beautiful Bill Act (OBBBA) delivers the most significant Low-Income Housing Tax Credit expansion in years, with major benefits for affordable housing developers and investors starting in 2026.
Key LIHTC Changes in the OBBBA:
Permanent 12% increase in 9% LIHTC allocations beginning 2026Bond financing threshold lowered from 50% to 25% for 4% LIHTC rehabilitation projectsEstimated 80,000 additional affordable units from 9% credit expansion through 2035Over 1 million additional affordable rental homes projected from bond threshold changeCalifornia: 200,000 new units projected through 2035Georgia: 98,000 new unitsTexas: 97,000 new unitsFor LIHTC developers, syndicators, and tax credit investors, the math on 4% acquisition-rehab deals just got significantly better. Properties placed in service after December 31, 2025 qualify under the new rules.
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