Last updated on August 4th, 2025
The budget reconciliation bill, known as the One Big Beautiful Bill Act (OBBBA), after being passed by the Senate and House, was signed into law by the president on July 4. This expansive piece of legislation introduces significant changes to existing tax and spending policies, impacting a wide range of government departments and funding sources. This article addresses some of the changes under the OBBBA relevant to the affordable housing space, as well as some policies that remain unchanged for now.
GRRP Funds Rescinded
The OBBBA rescinds all unobligated funding appropriated to the Green and Resilient Retrofit Program (GRRP). The GRRP is a program administered by HUD and funded by the Inflation Reduction Act (IRA), designed to improve the energy efficiency, water efficiency, and climate resilience of HUD-assisted multifamily properties. The program provided funding to owners of HUD-assisted multifamily housing for investments in green technologies, climate resilience strategies, and energy-efficient projects. The elimination of the GRRP may disrupt previously planned projects and may add strain to PHA budgets due to potentially higher energy costs.
Expansion of Low-Income Housing Tax Credit (LIHTC)
The OBBBA permanently increases allocations for 9% LIHTC by 12%, and also permanently reduces the private activity bond financing requirement for 4% LIHTC from 50% to 25%. These changes will become effective January 1, 2026. This expansion will encourage investment in the Low-Income Housing Tax Credit program and is expected to increase the affordable rental housing supply.
Qualified Opportunity Zones and New Markets Tax Credit Made Permanent
The OBBBA makes the Opportunity Zones (OZ) tax incentive permanent, with several modifications, including a narrower definition of “low-income community” and expanded reporting requirements. Every ten years, state governors will propose new opportunity zones. The bill also includes additional incentives for rural opportunity zones. The OBBBA also makes the Sec. 45D New Markets Tax Credit (NMTC) permanent. These provisions will encourage investment and construction in economically distressed communities and rural areas.
Changes to Medicaid and SNAP
The stricter eligibility requirements and funding cuts to Medicaid and SNAP programs imposed by the OBBBA will likely impact tenants of PHAs. Reduced access to government-funded benefits will require tenants to allocate more of their income towards food and medical costs, which may make it difficult for some to afford rent. As a result, housing authorities may face heightened rent collection challenges, including increased instances of arrears, evictions, and lease violations.
What the OBBBA Has Not Changed
- The OBBBA does not make any cuts or structural changes to Section 8, public housing, or HUD rental assistance. While the proposed FY26 budget includes potential significant cuts to HUD, funding for these programs remains unchanged for now as the FY26 budget is yet to be finalized.
- The OBBBA does not impose work requirements or two-year limits on rental assistance recipients, two proposals that have been put forward in recent months.
Conclusion
While HUD programs themselves may not be significantly impacted by the passage of the One Big Beautiful Bill Act, some provisions of the new legislation will affect tenants of PHAs, as well as the wider affordable housing space. For more information about the recent tax law changes, please don’t hesitate to reach out to our experts at RBT CPAs. And as always, RBT CPAs is here to support all of your PHA’s accounting, audit, tax, and advisory needs. Contact us today to find out how we can be Remarkably Better Together.