From Bond Breakthroughs to Blockbuster Booms: Tax Credits in Transition

This week on The Tax Credit Talk, hosts Hallie James and Parker An dive into a packed episode covering major updates across housing, film, brownfield, and renewable energy credits. From a permanent federal change to LIHTC bond thresholds to California’s aggressive new film strategy, the latest policy moves are reshaping where and how investment flows.

Whether you’re developing affordable housing, financing renewable projects, or eyeing opportunities in film or brownfield redevelopment, this episode unpacks the decisions driving momentum—and the challenges still ahead.

What We Covered:

🏘️ Federal Bond Threshold Permanently Lowered for LIHTC
Congress has permanently lowered the private activity bond financing threshold for 4% LIHTCs from 50% to 25%. California quickly adopted new regulations, encouraging developers to size bond requests closer to the new minimum. Incentives like higher developer fees and tiebreaker advantages are designed to keep projects competitive while managing bond supply. Meanwhile, states like Ohio and Georgia are expanding their own housing credit programs—Ohio boosting allocations to $109M in 2025 for nearly 1,850 new units, while Georgia contends with property tax treatment challenges that may require legal reform.

🎥 California Doubles Down on Film Credits
The state has doubled funding for its Film and Television Tax Credit program, from $330 million annually to $750 million through 2030. Key changes include refundable credits, broader eligibility, and diversity incentives. The results have been immediate: a 400% surge in applications and over $1.1 billion in projected spending tied to just 16 projects awarded in July, supporting nearly 6,700 jobs. The move signals California’s determination to reclaim its role as the undisputed leader in film production.

🌱 Brownfields Tax Incentive Extended Through 2028
The Brownfields Redevelopment Tax Incentive Reauthorization Act (H.R. 15) extends the federal tax credit that lets developers fully deduct cleanup costs for contaminated sites in the year they’re incurred. By ensuring no lapse in Section 198 coverage starting January 1, 2025, the extension is designed to lower redevelopment costs, attract private capital, create jobs, and transform polluted sites into productive community assets.

⚡ IRS Tightens Rules for Renewable Credits
IRS Notice 2025-42 removes the familiar 5% safe harbor for most renewable energy projects after September 2, 2025. Developers must now rely on the physical work test to qualify for Sections 45Y and 48E credits, raising the bar for eligibility. Smaller solar projects under 1.5 MW remain an exception, but for most developers, this stricter standard will significantly impact project timing, financing, and tax credit strategy.

Key Takeaways:

• Affordable housing finance enters a new era with lower bond thresholds and expanded state programs.
• California’s massive investment in film credits is already reshaping production decisions.
• Brownfield tax incentives offer a win-win for redevelopment and the environment.
• Renewable developers face higher hurdles as safe harbor rules tighten.

The common thread: policy is setting the pace for where capital, projects, and opportunities take root.

🎧 Listen to the full episode: https://podcasts.apple.com/us/podcast/from-bonds-to-blockbusters-tax-credits-reshaped/id1816285847?i=1000723627491
📩 Want to buy, sell, or strategize credits?
Email us at team@fallbrookfinance.com with subject line: “The Tax Credit Talk sent me.”

About Fallbrook Financial Services
Fallbrook Financial Services has placed over $6 billion in state tax credits across housing, renewable energy, film, brownfields, and more. We’re one of the largest brokerages in the country—here to help you make your credits count.