U.S. Senators Todd Young and Jerry Moran have reintroduced a bill aimed at amending the Internal Revenue Code to allow Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to participate in partnerships essential for low-income housing investments. The current code contains a provision that restricts investors partnering with Tax-Exempt Controlled Entities (TECEs) from certain benefits, such as accelerated depreciation and historic rehab tax credits.
The proposed legislation seeks to clarify that Fannie Mae and Freddie Mac are not subject to this rule, thereby safeguarding their involvement in these critical partnerships. Senator Young emphasized the importance of building more units to address the housing affordability crisis, stating, “By making one simple clarification, this bill will unlock much-needed new partnerships that are crucial for rural low-income housing investments.”
Senator Moran highlighted the impact of housing affordability on rural Americans, noting that this technical change would enable rural housing investors partnering with Fannie and Freddie to invest confidently in affordable housing. He urged his colleagues to support the bill, saying it would help reduce housing costs in rural communities.
In 2023, Senator Young had joined others in urging Treasury Secretary Janet Yellen for written guidance clarifying that GSEs like Fannie Mae and Freddie Mac are not considered TECEs. Alongside Senators Young and Moran, U.S. Senators Mark Warner and Peter Welch also reintroduced the legislation.
The full text of the legislation is available online.
