The American Affordability Act of 2025 makes significant changes to the Low-Income Housing Tax Credit (LIHTC) program, which is a major federal tool for funding affordable housing development. The bill increases the amount of tax credits available to developers and makes it easier to build affordable housing in more communities, particularly in rural areas and Native American territories. It also expands protections for vulnerable tenants, including victims of domestic violence and young people aging out of foster care, by allowing them to stay in affordable housing units even if their income rises slightly. The bill makes it easier for developers to rehabilitate existing buildings and recover from disasters like hurricanes or floods without losing their tax credits. It also changes how housing agencies allocate credits, requiring them to consider community development plans and the actual costs of building affordable housing, rather than just local political support. Additionally, the bill provides new tax incentives for supportive services in affordable housing, allowing up to 5% of available credits to go to projects that serve formerly incarcerated individuals, former foster youth, and kinship caregivers with wraparound services like job training or mental health counseling.