This bill significantly enhances the existing rehabilitation tax credit for buildings located in rural areas. For these applicable rural projects , the credit rate is increased to 30% of qualified rehabilitation expenditures. Furthermore, projects designated as affordable housing projects in rural areas will receive an even higher credit of 40% of their qualified expenditures, aiming to boost housing accessibility. An applicable rural project is defined as a qualified rehabilitated building situated in an area outside of cities or towns with populations greater than 50,000 or their contiguous urbanized zones. The total qualified rehabilitation expenditures eligible for this enhanced credit are capped at $5,000,000 per project. A key improvement is the allowance for taxpayers to transfer all or a portion of these enhanced credits, providing greater flexibility for project financing. The bill also eliminates the requirement for applicable rural projects to reduce the basis of the rehabilitated property by the amount of the credit received, further increasing the financial benefit. For affordable housing projects receiving the 40% credit, specific provisions are included for recapture if the affordable housing requirements are not maintained, though a 45-day rectification period is provided. These changes are designed to stimulate economic development and provide much-needed affordable housing options in underserved rural communities, applying to properties placed in service after December 31, 2025.