The Affordable Housing Credit Improvement Act of 2025 aims to significantly reform and expand the Low-Income Housing Tax Credit (LIHTC) program, now renamed the Affordable Housing Tax Credit . This legislation seeks to increase the availability of affordable housing across the United States. A primary mechanism for this expansion is the substantial increase in State allocations for the credit, raising both the per capita and minimum amounts with annual cost-of-living adjustments. The bill introduces several key changes to tenant eligibility . It allows the average income test to apply to exempt facility bonds, broadening the types of projects that can utilize this flexibility. Crucially, it codifies rules ensuring that a unit can remain classified as low-income even if the tenant's income increases, provided initial income was below 60% or 80% of the area median gross income. These provisions help maintain housing stability for residents whose financial situations improve. Reforms to student occupancy rules expand eligibility for certain student populations, including married students, individuals with disabilities, veterans, those with qualifying children, and victims of domestic violence or human trafficking. Additionally, the bill mandates that LIHTC-supported housing projects implement protections for victims of domestic abuse , prohibiting lease refusal or termination based on related criminal activity and allowing for lease bifurcation. It also clarifies that veterans and victims of domestic abuse meet the general public use requirement. The legislation introduces greater flexibility and support for project development. It allows for a reconstruction or replacement period after a federally declared casualty loss without triggering credit recapture, providing up to 25 months for recovery. The bill also includes certain relocation costs as eligible rehabilitation expenditures, easing the financial burden on projects undergoing renovation. Furthermore, it repeals the population cap for qualified census tracts , expanding areas eligible for increased credit. To ensure fair practices and efficient use of funds, the bill modifies previous ownership rules and limits the acquisition basis for buildings placed in service within the last 10 years, preventing inflated property values. It also restricts planned foreclosures that could prematurely terminate the compliance period. State housing credit agencies are empowered to determine community revitalization plans based on specific criteria, and local approval or contributions are prohibited as selection criteria in Qualified Allocation Plans (QAPs), except when part of broader leveraging considerations. The bill provides targeted credit increases for specific project types. Projects designated to serve extremely low-income households (30% of area median gross income or 100% of the federal poverty line) will receive a 150% increase in eligible basis. It also increases credit for certain bond-financed projects designated by state agencies and eliminates the basis reduction for LIHTC properties claiming the energy-efficient commercial building deduction, encouraging sustainable development. The tax-exempt bond financing requirement is reduced from 50% to 25% for certain buildings. Recognizing specific housing needs, the bill includes provisions for Native American and rural communities . Qualified Allocation Plans must now consider the affordable housing needs of Native Americans. "Indian areas" and "rural areas" are explicitly included as difficult development areas , making projects in these regions eligible for increased credit. This aims to stimulate development in underserved communities. Finally, the bill includes a Sense of Congress emphasizing the importance of increased data sharing and transparency within the program. It also calls for action to discourage discriminatory land use policies and remove barriers to affordable housing, encouraging states and localities to adopt inclusive land use and zoning regulations to boost housing supply and affordability.