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Executive budget expands tax credits, trust fund and veteran homelessness initiative
Summary
The FY2026 executive budget proposes expanding the Arizona low-income housing tax credit, deposits to the Housing Trust Fund and a Homes for Heroes fund to address veteran homelessness alongside ARPA investments and H2O transitional housing drawdowns.
Lexi Bburg, a budget analyst with OSPB, outlined housing-related proposals in the FY2026 executive budget that aim to spur affordable housing production and address veteran homelessness.
Key measures include an expansion of the Arizona low-income housing tax credit (LITEC) to provide $10 million in credits annually starting FY2026 and an extension of the program's scheduled sunset to FY2031. The administration also proposes a $15 million general fund deposit to the Housing Trust Fund to continue grants for emergency rental assistance, home repair and gap financing for affordable housing developers.
To address veteran homelessness, the executive budget includes a $5 million general fund deposit to create a Homes for Heroes fund housed at the Department of Veteran Services; OSPB said the fund will begin with an interagency strategic planning process in FY2026. The budget also allocates ARPA funds and state monies to expand homeownership assistance programs, and OSPB explained that a $5.3 million state investment in the H2O program could leverage roughly $49.8 million in federal dollars for transitional housing services tied to Medicaid.
