PlainBillCongress, translated.Legislation. Context. Public interest.Congressional Research Service
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People & committees
Rep. Feenstra, Randy [R-IA-4] · R–IA
Legislative record
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Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
Source last updated: Dec 19, 2025. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-03-04 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed ACRE Act of 2025 would let specified lenders exclude interest on qualifying new property-backed loans from income for federal income-tax purposes. Eligible property includes agricultural land, forestland, certain rural homes, and fishing or aquaculture property. Lender, borrower, and home-loan restrictions would apply. Treasury would study whether the exclusion lowered borrowing rates; lower rates are not an established result.
This Act may be cited as the Access to Credit for our Rural Economy Act of 2025 or the ACRE Act of 2025.
Gross income shall not include interest received by a qualified lender on any qualified real estate loan.
(A) secured by— (i) rural or agricultural real estate or forestland, or (ii) a leasehold mortgage (with a status as a lien) on rural or agricultural real estate, (B) which is made to a person other than a foreign adversary entity, (C) in the case of any loan with respect to single family residence described in paragraph (3)(B)— (i) the proceeds of which are used to purchase or improve such residence, and (ii) the principal of which (when added to the principal of all other such loans with respect to such residence) does not (as of the time the interest income on such loan is accrued) exceed $750,000, and (D) made after the date of the enactment of this section.
The term rural or agricultural real estate means— (A) any real property which is substantially used for the production of one or more agricultural products, (B) any single family residence— (i) which is the principal residence (within the meaning of section 121) of its occupant, and (ii) which is located in a rural area within the meaning of section 1.11(b)(3) of the Agricultural Credit Act of 1987 (12 U.S.C. 2019(b)(3)), (C) any real property which is substantially used in the trade or business of fishing or seafood processing, and (D) any aquaculture facility.
Not later than 5 years after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall submit a written report to the Committee on Ways and Means of House of Representatives and the Committee on Finance of the Senate analyzing the impact of section 139J of the Internal Revenue Code of 1986 (as added by subsection (a)) on qualified real estate loans (as defined in such section), including whether such section has resulted in a reduction in the rate of interest on such loans.
The tax exclusion would apply to interest received by eligible lenders. Eligible lenders would include banks and savings associations with federally insured deposits, and state- or federally regulated insurance companies.
Gross income shall not include interest received by a qualified lender on any qualified real estate loan.
(1) any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), (2) any State- or Federally-regulated insurance company
Certain wholly owned subsidiaries of banking or insurance holding companies would also qualify. They would have to be formed under U.S. or state law and have their principal place of business in the United States, including its territories. The banking parent would have to satisfy the particular statutory classification cited in the proposal.
(3) any entity wholly owned, directly or indirectly, by a company that is treated as a bank holding company for purposes of section 8 of the International Banking Act of 1978 (12 U.S.C. 3106) if— (A) such entity is organized, incorporated, or established under the laws of the United States or any State of the United States, and (B) the principal place of business of such entity is in the United States (including any territory of the United States), (4) any entity wholly owned, directly or indirectly, by a company that is considered an insurance holding company under the laws of any State if such entity satisfies the requirements described in subparagraphs (A) and (B) of paragraph (3)
A federally chartered instrumentality established under the specified Farm Credit Act provision would qualify as a lender for interest on qualifying loans secured by property substantially used to produce agricultural products.
(5) with respect to interest received on a qualified real estate loan secured by real estate described in subsection (c)(3)(A), any federally chartered instrumentality of the United States established under section 8.1(a) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa–1(a)).
(A) any real property which is substantially used for the production of one or more agricultural products
A qualifying loan would have to be secured by rural or agricultural real estate, forestland, or a leasehold mortgage on rural or agricultural real estate. The proposal requires the leasehold mortgage to have the status of a lien.
(A) secured by— (i) rural or agricultural real estate or forestland, or (ii) a leasehold mortgage (with a status as a lien) on rural or agricultural real estate
The proposal's definition of rural or agricultural real estate would include property substantially used to produce agricultural products, property substantially used in fishing or seafood processing businesses, and aquaculture facilities.
The term rural or agricultural real estate means— (A) any real property which is substantially used for the production of one or more agricultural products
(C) any real property which is substantially used in the trade or business of fishing or seafood processing, and (D) any aquaculture facility.
Aquaculture facilities would include land, structures, and related features used for aquaculture, such as hatcheries, rearing ponds, raceways, pens, and incubators. They would have to be located in a U.S. state or territory.
The term aquaculture facility means any land, structure, or other appurtenance that is used for aquaculture (including any hatchery, rearing pond, raceway, pen, or incubator) that is located in any State or any territory of the United States.
A single-family home would qualify only if it were its occupant's principal residence and located in a rural area under the cited existing-law definitions. Home-loan proceeds would have to purchase or improve that residence. The combined principal of all such loans on the residence could not exceed $750,000 when interest income accrues.
(B) any single family residence— (i) which is the principal residence (within the meaning of section 121) of its occupant, and (ii) which is located in a rural area within the meaning of section 1.11(b)(3) of the Agricultural Credit Act of 1987 (12 U.S.C. 2019(b)(3))
(C) in the case of any loan with respect to single family residence described in paragraph (3)(B)— (i) the proceeds of which are used to purchase or improve such residence, and (ii) the principal of which (when added to the principal of all other such loans with respect to such residence) does not (as of the time the interest income on such loan is accrued) exceed $750,000
Whether property met the rural or agricultural real estate definition would be determined when the loan's interest income accrues, rather than solely when the loan is made.
For purposes of the preceding sentence, the determination of whether property securing such loan is rural or agricultural real estate shall be made as of the time the interest income on such loan is accrued.
Loans to a defined foreign adversary entity would be ineligible. That definition includes a foreign adversary itself, foreign persons subject to its jurisdiction or organized under its laws, and foreign persons owned, directed, or controlled by either of those categories.
(B) which is made to a person other than a foreign adversary entity
The term foreign adversary entity means— (i) a foreign adversary, (ii) a foreign person subject to the jurisdiction of, or organized under the laws of, a foreign adversary, and (iii) a foreign person owned, directed, or controlled by an entity described in clause (i) or (ii).
The proposal lists China, including its Special Administrative Regions, Cuba, Iran, North Korea, and Russia as foreign adversaries. It also includes Venezuela during any period in which Nicolás Maduro is its president.
The term foreign adversary means— (i) the People’s Republic of China, including all Special Administrative Regions, (ii) the Republic of Cuba, (iii) the Islamic Republic of Iran, (iv) the Democratic People’s Republic of Korea, (v) the Russian Federation, and (vi) the Bolivarian Republic of Venezuela during any period of time in which Nicholás Maduro is President of the Republic.
Qualifying loans would have to be made after enactment. The tax amendments would apply to taxable years ending after enactment; the source does not supply an actual enactment date.
(D) made after the date of the enactment of this section.
The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
For purposes of the specified collateral and home-loan conditions, the refinancing rule would treat a loan as not made after enactment to the extent its proceeds refinance debt made on or before enactment. A series of refinancings would be traced back to the original loan. The rule's cross-reference leaves uncertainty about its interaction with the separate loan-date requirement.
For purposes of subparagraphs (A) and (C) of paragraph (1), a loan shall not be treated as made after the date of the enactment of this section to the extent that the proceeds of such loan are used to refinance a loan which was made on or before the date of the enactment of this Act (or, in the case of any series of refinancings, the original loan was made on or before such date).
(D) made after the date of the enactment of this section.
For purposes of Internal Revenue Code section 265(a)(2), qualifying loans would be treated as obligations whose interest is wholly exempt from federal income taxes. The supplied text does not reproduce that existing provision, so it does not establish the full consequences of this coordination rule.
Qualified real estate loans shall be treated as obligations described in section 265(a)(2) the interest on which is wholly exempt from the taxes imposed by this subtitle.
Within five years after enactment, the Treasury Secretary or a delegate would have to give the House Ways and Means Committee and Senate Finance Committee a written report on the exclusion's impact on qualifying loans, including whether it reduced interest rates.
Not later than 5 years after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall submit a written report to the Committee on Ways and Means of House of Representatives and the Committee on Finance of the Senate analyzing the impact of section 139J of the Internal Revenue Code of 1986 (as added by subsection (a)) on qualified real estate loans (as defined in such section), including whether such section has resulted in a reduction in the rate of interest on such loans.
The supplied official-actions snapshot, updated December 19, 2025, records introduction in the House and referral to the House Committee on Ways and Means on March 4, 2025.
Source snapshot updated 2025-12-19T09:07:35Z. 2025-03-04: Referred to the House Committee on Ways and Means. 2025-03-04: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-03-04. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified in the complete supplied introduced text. This conclusion applies only to that version and does not establish absence in other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for a particular recipient or place was identified in the complete supplied introduced text. This conclusion applies only to that version and does not establish absence in other versions or accompanying materials.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
One narrowly specified lender-eligibility provision warrants scrutiny within the bill's main tax policy. This classification is not a judgment about its justification.
The proposal specifically extends eligible-lender status to a federally chartered instrumentality established under section 8.1(a) of the Farm Credit Act of 1971 for qualifying loans secured by agricultural-production property. This narrowly drawn eligibility would allow that statutory class of lender to receive the proposed interest-income exclusion for those loans. The referenced law is not supplied, so the beneficiary is identified here only by the bill's statutory description.
(5) with respect to interest received on a qualified real estate loan secured by real estate described in subsection (c)(3)(A), any federally chartered instrumentality of the United States established under section 8.1(a) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa–1(a)).
(A) any real property which is substantially used for the production of one or more agricultural products
Gross income shall not include interest received by a qualified lender on any qualified real estate loan.
Full text preserved for this analysis. Legislative record snapshot: Dec 19, 2025. How PlainBill uses AI