6 Must-Know Facts About the Low-Income Housing Tax Credit Program
The LIHTC program is a federal tax incentive designed to encourage the construction or renovation of affordable housing for low-income families. It was created as part of the Tax Reform Act of 1986 and is administered by the Internal Revenue Service (IRS) and the Department of Housing and Urban Development (HUD).
Under the program, developers can apply for tax credits that can be used to offset their federal tax liability over a period of 10 years. The amount of tax credits a developer can receive is based on the cost of constructing or rehabilitating the affordable housing units and is subject to annual allocation limits.