Senators Cortez Masto and Cassidy Reintroduce Bipartisan Legislation to Strengthen MRBs and MCCs

Senators Catherine Cortez Masto (D-NV) and Bill Cassidy (R-LA) earlier today introduced the Affordable Housing Bond Enhancement Act (S. 1511). This legislation, which NCSHA has worked on closely with the senators’ offices, will expand the state housing finance agencies’ ability to provide affordable homeownership and rental housing and use tax-exempt bond authority more efficiently by strengthening the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs.

The bill enacts a series of simple, commonsense reforms to the MRB and MCC programs that will allow HFAs to better stretch their bond resources and help more under-served households. It contains many of NCSHA’s long-standing priorities for improving Housing Bonds. These include:

• Increasing the MRB home improvement loan limit from $15,000 to $75,000 and indexing it for inflation;
• Allowing MRBs to be used for refinancing loans;
• Providing HFAs additional flexibility in how they utilize housing bond authority;
• Simplifying how a borrower’s MCC benefit is calculated;
• Reducing the time period for the MRB and MCC recapture tax from nine years to five;
• Extending the amount of time HFAs can use converted MCC authority from two years to four;
• Allowing HFAs to reconvert MCC authority back into MRBs two years after the conversion, rather than one;
• Eliminating lenders’ MCC reporting requirements;
• Reducing the required MCC public comment period; and
• Requiring the Internal Revenue Service to report to Congress annually on states’ use of private activity bond authority.

MRBs and MCCs historically have served as HFAs’ primary means of financing their affordable homeownership programs, having helped nearly four million home buyers combined since they were established.

Senators Cortez Masto and Cassidy introduced a nearly identical bill last Congress. The one change is that the new bill would increase the MRB home improvement loan limit to $75,000 rather than $50,00 to reflect recent cost increases.

NCSHA has written a section-by-section analysis of the bill that describes each of the provisions in more detail, as well as a one-page summary of the bill.

In her press release announcing the bill, Cortez Masto declared, “Hardworking families deserve the safety and security of a roof over their heads,” and said MRBs and MCCs give working families a “meaningful break as they take the important step of buying a first home.” Cassidy noted, “Buying a home is increasingly out of reach for first-time buyers,” and the Affordable Housing Bond Enhancement Act “addresses that issue.”

In addition to NCSHA, the bill is supported by LISC, National Association of REALTORS®, Mortgage Bankers Association, Community Home Lenders of America, and Prosperity Now.

NCSHA thanks Senators Cortez Masto and Cassidy for their continued leadership on this critical affordable housing issue. We look forward to working with them, the HFAs, and industry partners to advance the legislation.