US HB4385

Establishes a pilot program allowing up to 25 eligible entities to create interest-bearing escrow accounts for up to 5,000 families receiving Section 8 or Section 9 housing assistance, with deposits equal to rent increases attributable to earned income gains

Families can withdraw escrow funds (including interest) after ceasing welfare assistance and typically between 5-7 years after account establishment, with earlier withdrawals permitted for self-sufficiency goals or when housing assistance ends

Limits escrow contributions to families with adjusted income below 80% of area median income and exempts earned income increases from being counted as income for other HUD program eligibility

Requires participating entities to notify families of enrollment and provide opt-out opportunities, with no impact on housing assistance for those who decline participation

Authorizes $5 million for fiscal year 2026 for technical assistance and program evaluation, with the Secretary required to submit an outcomes report to Congress within 8 years and the program terminating after 10 years