ACRE Act of 2025

Tax Exclusion for Lenders: Gross income will not include interest received by a qualified lender on qualified real estate loans (Section 2(a)). This could impact the financial treatment of interest for institutions such as banks, savings associations, and insurance companies (Section 2(b)).

Support for Agricultural and Rural Property: The bill applies to loans secured by rural or agricultural real estate, forestland, or leasehold mortgages on such property (Section 2(c)(1)(A)). This includes property substantially used for the production of agricultural products (Section 2(c)(3)(A)).

Benefits for Rural Homeowners: The exclusion applies to certain single family residences that serve as a principal residence and are located in a rural area (Section 2(c)(3)(B)). This applies to loans used to purchase or improve these residences, provided the principal does not exceed $750,000 (Section 2(c)(1)(C)).

Support for Fishing and Aquaculture: The bill includes provisions for real property used in the trade or business of fishing or seafood processing, as well as aquaculture facilities (Section 2(c)(3)(C-D)).

Restrictions on Refinancing: Loans used to refinance a loan that was made on or before the date of the Act's enactment are not treated as new qualified loans (Section 2(c)(2)).

Exclusions Based on Entity Type: Loans made to a "foreign adversary entity" are not considered qualified real estate loans (Section 2(c)(1)(B)). This includes entities from the People's Republic of China, Cuba, Iran, North Korea, Russia, and Venezuela (Section 2(c)(5)).

Loan Principal Limits: For single family residences, the tax exclusion is subject to a principal limit of $750,000 when added to other such loans for the same residence (Section 2(c)(1)(C)(ii)).