|Program (?)||Low-Income Housing Tax Credit|
The Low-Income Housing Tax Credit (LIHTC, pronounced “Ligh-TECK”) program provides a dollar-for-dollar reduction in federal income tax liability for investors in rental housing that serves very low-income and low-income households. LIHTC is administered by the Internal Revenue Service, which allocates tax credits to designated agencies based on a formula set by legislation. There are two types of LIHTCs: nine-percent credits and four-percent credits, which refer to the percentage of allowable development costs (eligible basis) that may be credited against the taxes of investors. Nine-percent credits are awarded to affordable housing developers on a competitive basis. Four-percent credits are provided as-of-right when a project is financed with tax-exempt bonds. Tax credits are further allocated based on criteria specified in the jurisdiction’s Qualified Allocation Plan. Once awarded Low-Income Housing Tax Credits, the developer is able to syndicate (or sell) tax credits to corporate investors to raise equity that is used towards the construction of the project. Tax credit investors receive a reduction in corporate federal income taxes for ten years; as a result, they usually make payments over time and these payments are capitalized by a bridge loan that represents the investor equity expected from the tax credits. Thus, the result of a tax credit investment is usually a significant percentage of equity in the project development that reduces the remaining development costs that require financing.
Although HCR is the main allocating agency of tax credits in New York State and supports projects in New York City, it sub-allocates LIHTCs to HPD to administer the program in New York City. During annual funding rounds, developers apply competitively to HPD for allocations of tax credits.
|Benefit Classification (?)|
|Supply or Demand||Supply|
|One-Time or Ongoing||One-Time|
|Benefit Type (?)||Financing, Grant, Property Tax Incentive|
|Government Agency (?)||US Internal Revenue Service|
|Program Information (?)|
|Scale||Very Large Scale (over 10,000 units produced)|
|Developer/Owners (?)||For-Profit, Non-Profit|
|Property Information (?)|
|Property Occupancy||Occupied, Vacant|
|Property Type||Land, Building|
|Construction Type||Rehabilitation, New Construction|
|Occupant Tenure (?)||Rental|
|Occupant Income Restrictions (?)||Very Low-Income, Low-Income|
|Other Targeting Information (?)||
At least 20 percent of units must be reserved for households with income 50 percent below AMI or 40 percent of units must be reserved for households with lower than 50 percent AMI
|More Information||NYC HPD
|Available on CoreData.nyc?||Yes|
|Last Updated||December 2016|
|Data Source||U.S. Department of Housing and Urban Development|
LIHTC data only includes the subsidy start date. We estimate the end date of a LIHTC subsidy to be 30 years from the start date. Data from U.S. Department of Housing and Urban Development accessed May 2016.