ACRE Act of 2025

The "Access to Credit for our Rural Economy Act of 2025," or the ACRE Act of 2025 , proposes to amend the Internal Revenue Code of 1986. Its primary purpose is to exclude from gross income interest received by qualified lenders on certain qualified real estate loans , thereby aiming to stimulate investment and reduce borrowing costs in rural and agricultural sectors. A qualified lender includes FDIC-insured banks and savings associations, State or Federally-regulated insurance companies, and certain entities owned by bank or insurance holding companies. It also extends to federally chartered instrumentalities of the United States for specific types of agricultural loans. This broad definition ensures a wide range of financial institutions can participate in the program. A qualified real estate loan must be secured by rural or agricultural real estate, forestland, or a leasehold mortgage on such property. This includes land used for agricultural products, fishing, seafood processing, or aquaculture facilities. For single-family residences, the loan must be for purchase or improvement, with a principal limit of $750,000, and the residence must be the principal home located in a rural area. Importantly, loans made to "foreign adversary entities" are explicitly excluded from being qualified. Furthermore, the exclusion generally applies to loans made after the enactment date, with specific rules for refinancings to prevent the re-qualification of older loans. The bill also mandates the Secretary of the Treasury to submit a report within five years analyzing the impact of this exclusion, particularly on interest rates for these loans.