Sweeping Housing Bill Proposes Affordable Housing Grants, Fair Housing Expansion, and Estate Tax Overhaul

Congress is looking at a hefty piece of legislation called the American Housing and Economic Mobility Act of 2025. Think of it as a multi-pronged attack aimed at tackling housing affordability, the lingering effects of discrimination, community isolation, and even how inheritances are taxed. It bundles together grants for building affordable homes, boosts funding for existing housing programs, updates fair housing laws, and makes significant changes to estate taxes.

Building Blocks for Better Housing

First up, the bill tries to grease the wheels for more affordable housing. It sets up a grant program dangling cash incentives for states and local governments if they cut through red tape and zoning rules that make building cheaper homes difficult (Title I). The idea is simple: fewer rules, lower costs, more houses. Alongside this, it pumps more money into established programs like the Housing Trust Fund and Public Housing Capital Fund, basically giving builders and agencies more resources to work with. There's also a focus on what happens after foreclosure. HUD, Fannie Mae, and Freddie Mac would have to prioritize selling foreclosed homes to people who will actually live there, or to community groups fixing them up for homeowners, rather than large investors (Title I). If you're facing trouble with your mortgage, the bill requires lenders to give you clear info on options before selling off your loan, and puts rules on who can buy these loans and what kind of payment plans they must offer.

Opening Doors to Opportunity

Recognizing that past discrimination still casts a long shadow, the bill introduces several measures aimed at boosting economic mobility (Title II). A key piece is a new down payment assistance program specifically for first-time, first-generation homebuyers – meaning neither you nor your parents have owned a home. This could offer grants up to 3.5% of the home's value. Another initiative targets neighborhoods stuck in an "appraisal gap," where homes are valued less than what it costs to build or fix them up. States would get funds to help homeowners in these areas catch up on mortgages, make repairs, or rehab empty properties. The bill also aims to beef up the Community Reinvestment Act, pushing banks harder to lend and invest in low- and moderate-income areas, even adding points for projects that help communities weather climate change. Credit unions could also get more leeway to serve underserved areas.

Leveling the Playing Field

Title III expands the Fair Housing Act, adding explicit protections against discrimination based on "gender identity," "marital status," "sexual orientation," "source of income" (like using a housing voucher), and "veteran status." This means landlords couldn't turn someone away just because they fall into one of these categories. Public housing agencies would also get a new mandate: figure out why voucher holders aren't living in areas with better schools or job opportunities and develop plans to fix it. HUD would need to provide maps and data to help them do this. The goal is to give families, especially those with kids or members with disabilities, a real shot at moving to neighborhoods that offer more resources.

Shifting the Tax Landscape

Get ready for some significant changes if you deal with estate planning (Title IV). The bill proposes lowering the amount you can inherit tax-free down to $3.5 million and hiking the tax rates on amounts above that. For the ultra-wealthy, there's a new 10% surtax on estates worth over $1 billion. Rules around certain trusts, like Grantor Retained Annuity Trusts (GRATs), would get tighter, requiring longer terms (minimum 10 years) to limit their use as tax shelters. The bill also aims to close loopholes related to Generation-Skipping Transfers and limit valuation discounts often used to lower the taxable value of family-owned businesses. On the flip side, the annual gift tax exclusion (how much you can give someone each year tax-free) would increase slightly to $10,000 per person. There are also adjustments potentially benefiting farmers and landowners using conservation easements.

Making Homes Work for Everyone

Finally, Title V focuses on accessibility. It mandates that new housing projects receiving HUD funding must include a higher percentage of units accessible to people with disabilities. This involves updating existing federal regulations to ensure more homes are built with features needed by individuals with mobility or sensory impairments. While this could slightly increase construction costs, the aim is to expand housing choices and create more inclusive communities.