Understanding Tax Credit

So, you’ve applied for a Low Income Housing Tax Credit Apartment…

We would like to help you better understand the process we must take to determine your eligibility.

The Low Income Housing Tax Credit Program is an affordable housing program for individuals and families on fixed or lower incomes. The Program was created by Congress in 1986 as part of the Tax Reform Act and is administered by the Internal Revenue Service (IRS).

Benefits To You

The benefit to Residents living in such housing is a newly constructed or substantially rehabbed apartment home with rents lower than the market rate. The rents are 30% of the area median income as published by HUD, often resulting in rents substantially lower than other comparable apartments. Each year the rents will be reviewed to ensure they remain at 30% of the area median income.

Incentives To Owners

Owners are offered a reduction in their tax liability in exchange for offering quality housing at these fixed rents. To receive this reduction, the Owners must certify the Residents are qualified under the Program requirements and are paying the correct amount of rent.

Difference From Other Housing Programs

This program is not a subsidized housing program. Each resident is responsible for the full amount of rent each month. The rental amount is not based on your individual household income, rather the pre-set income limits in the area. It is also important to note that some apartment homes in the building may not be part of this program. The rent of these apartments will often be higher.

If you would like more information about how we determine your eligibility, you may download a printable PDF with details.