Wildfire Insurance Affordability Act

This legislation establishes the Wildfire Risk Reduction Grant Program, administered by the United States Fire Administrator, to provide formula grants to states, territories, and Indian Tribes. These grants promote wildfire resilience investments, including home hardening and defensible space, for owner-occupied primary residences, small multifamily properties, and affordable housing. Funds are distributed based on population, wildfire risk, and equity considerations for low-income and rural communities, with a maximum of $10,000 per household.

Grant funds can be used for various mitigation activities, such as improving roof fire resistance, installing ignition-resistant components, and creating defensible space, all while adhering to recognized industry standards like Firewise USA. Additionally, the bill creates a Homeowner's Wildfire Insurance Premium Assistance Voucher Pilot Program. This pilot offers means-tested vouchers to qualifying low-income households, defined as those with incomes at or below 80% of the area median, residing in high-risk areas, and having completed specified risk reduction investments.

Both programs allow for up to 10% of funds for administrative costs. The voucher pilot program is set to expire after five years and requires reports on its effectiveness in reducing insurance costs. Crucially, the bill amends the Internal Revenue Code to ensure that any financial assistance received through these grant and voucher programs is excluded from gross income, making these benefits non-taxable for recipients.