Low Income Housing Tax Credit (LIHTC) Update

The Low-Income Housing Tax Credit (LIHTC) program is a federal program that has been implemented over the last three decades to encourage the acquisition, rehabilitation, and new construction of rental housing targeted to lower-income households. Since its inception in 1986, LIHTC has contributed to the leveraging of nearly $100 billion in private investment capital, resulting in the financing of almost 2.8 million housing units. It is one of the nation’s most critical tools for creating and rehabilitating affordable housing.

LIHTC was originally established by the U.S. Internal Revenue Code (IRC) and involves multi-level cooperation and supervision. State housing agencies administer many aspects of the program, including income and rent compliance for housing sites. The Internal Revenue Service (IRS) oversees the state housing agencies; they act to ensure that federal LIHTC monies are appropriated and applied correctly according to the law. LIHTC monies are provided during the first 10 years of a minimum 30-year compliance period during which rent and income restrictions apply to the housing projects.

LIHTC tax credits are divided into two separate rates. The maximum 70% present value credit rate (PVC) can be applied to non-federally subsidized low-income new construction and substantial rehabilitation; this excludes funding with tax-exempt bond proceeds and below-market federal loans. The maximum 30% PVC rate applies to acquisition expenditures and federally subsidized low-income new construction or substantial rehabilitation expenditures.

Since many PolicyMap users are engaged in the construction and rehabilitation of affordable housing, the LIHTC dataset on PolicyMap tends to be one of our most popular. As such, we are excited to let users know that it has now been updated to include LIHTC units placed in services through 2013. As always, the projects can be filtered by percent low-income units, year placed in service, allocation year, credit percentage, as well as other project characteristics. You can use the map below to explore LIHTC properties in your target area.

In 2008, Congress passed the Housing and Economic Recovery Act (HERA), requiring each state housing finance agency administering the LIHTC program to submit certain demographic and economic information on tenants in LIHTC units to HUD. Last year, HUD released the first public publication analyzing this data. While it is not inclusive of all tenants served by LIHTC, the publication is certainly helpful in providing a picture of the program’s beneficiaries. You can read that article here.