The Federal Low-income Housing Tax Credit (LIHTC) helps produce affordable housing throughout the U.S. The tax credit program is administered by each individual state’s housing agency on behalf of the federal government.
There are two LIHTC programs:
- A 9% competitive LIHTC awarded by each State annually to projects, and
- 4% non-competitive LIHTC used in conjunction with tax-exempt bonds. Each State will then have certain criteria used to evaluate projects that desire to utilize LIHTCs.
Generally the tax credit is based upon the cost of creating the affordable housing. In order to live in a LIHTC project, residents will need to satisfy certain income restrictions based upon the project’s area median income.
If you are interested in learning about LIHTCs and how they might work for your project, contact our BW&A team.
