WASHINGTON – U.S. Senators Jerry Moran (R-Kan.), Mark Warner (D-Va.), Todd Young (R-Ind.) and Peter Welch (D-Vt.) reintroduced legislation to amend the Internal Revenue Code to clarify that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are able to participate in partnerships that are crucial for low-income housing investments.

Current Internal Revenue Code contains a provision stating that investors partnering with Tax-Exempt Controlled Entities (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 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.

“Housing affordability has a significant impact on rural Americans across the country,” said Sen. Moran. “By making this technical change, rural housing investors that partner with Fannie and Freddie can confidently invest in affordable housing that is desperately needed in rural communities. I encourage my colleagues to support this bill so that we can continue to improve rural America by reducing housing costs.”

“Far too many folks across Virginia – including those in rural communities – are suffering because of the affordable housing crisis,” said Sen. Warner. “We need an all-hands-on-deck approach to getting investments into rural communities and expanding housing options for low-income Americans. I’ve been continuously raising the alarm about the commonsense fix in the Preserving Rural Housing Investments Act. We must pass this bipartisan legislation so we can unlock investments in our rural communities and cut housing costs for hardworking Virginians.”

“We can’t address our housing affordability crisis without building more units,” said Sen. Young. “By making one simple clarification, this bill will unlock much-needed new partnerships that are crucial for rural low-income housing investments.”

In 2023, Sens. Moran and Warner led 20 of their colleagues urging Treasury Secretary Janet Yellen to provide written guidance that clarifies that the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac are not Tax-Exempt Controlled Entities (TECEs).

You can read the bill text here.

"Rural communities face an unseen housing crisis that we work every day to address," said Sarah Greenberg, President of Cinnaire Lending. "This common-sense legislation will drive investment to critically needed affordable housing development and create more quality housing options in rural America, including rural communities we serve in the Midwest and Mid-Atlantic regions. We strongly endorse this bipartisan effort to make sure rural communities get the support they need to thrive. We are grateful to Senators Moran and Warner for their bipartisan leadership on this legislation and we encourage its swift adoption this year."

“The Housing Credit program is essential for building and preserving rental housing in rural America—the very communities that have some of our most dire affordable housing challenges,” said Stockton Williams, Executive Director of National Council of State Housing Agencies. “Senator Moran and Senator Warner’s bill will ensure Fannie Mae and Freddie Mac can continue to meet their statutory requirements to meet underserved rural housing needs in an efficient manner through the program.”

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