This bill makes changes to how the government handles tax credits for affordable housing. Specifically, it removes a loophole called the "qualified contract exception" that allowed developers to convert affordable housing buildings into market-rate housing after a certain period.

Here's what that means in practical terms: Right now, developers who build affordable housing using federal tax credits can, under certain conditions, eventually sell the building and convert it to regular market-rate housing. This bill closes that door for most future projects. However, it grandfathers in buildings that already received their tax credit allocation before January 1, 2025, meaning those existing projects can still use the old rules.

The bill also changes how the government values buildings when they transition out of the affordable housing program. Instead of just valuing the non-low-income portion, the new rules require valuing both the low-income and non-low-income portions at fair market value, while accounting for the rent restrictions that keep the affordable units affordable. This is meant to make it harder financially for developers to convert affordable housing to market-rate housing, thereby preserving more affordable units long-term. The changes apply to any new requests made after the bill becomes law.