Increase and set aside for housing bonds for transit oriented developments

(a) In general Paragraph (5) of section 146(d) of the Internal Revenue Code of 1986 is amended to read as follows: (5) Increase and set aside for certain housing bonds (A) In general In the case of calendar years beginning after 2025, the State ceiling for each State shall be increased by 30 percent. (B) Set aside (i) In general Any amount of the State ceiling for any State which is attributable to an increase under this paragraph shall be allocated solely for one or more qualified housing issues. (ii) Qualified housing issue (I) In general For purposes of this paragraph, the term qualified housing issue means an issue 95 percent or more of the net proceeds of which are to be used to provide projects for residential rental property (within the meaning of section 142(d)(1)), if each qualified residential rental project with respect to such issue— (aa) is located within a transit hub, (bb) is occupied solely by individuals whose income is 120 percent or less of area median gross income (as determined under section 142(d)(2)(B)(i)), and (cc) meets the requirements of subclause (II). (II) Additional requirements A qualified residential rental project meets the requirements of this subclause if— (aa) 20 percent or more of the residential units in such project are both rent-restricted (as determined pursuant to rules similar to the rules under section 42(g)(2)) and occupied by individuals whose income is 50 percent or less of area median gross income (as determined under section 142(d)(2)(B)(i)), and (bb) 10 percent or more of the residential units in such project are both rent-restricted (as determined pursuant to rules similar to the rules under section 42(g)(2)) and occupied by individuals whose income does not exceed the higher of— (AA) the poverty guidelines updated periodically by the Department of Health and Human Services under the authority of section 673(2) of the Community Services Block Grant Act applicable to a family of the size involved (except that this clause shall not apply in the case of public housing agencies or projects located in Puerto Rico or any other territory or possession of the United States), or (BB) an amount equal to 30 percent or less of area median gross income (as determined under section 142(d)(2)(B)(i)). (iii) Transit hub For purposes of clause (ii)(I)(aa), the term transit hub means an area such that any point in such area is not more than 1/2 mile from a fixed guideway public transportation station, intercity bus station, intercity bus stop, or intercity passenger rail station.. (b) Effective date The amendment made by this section shall apply to bonds issued after December 31, 2025.