Low income housing tax credit(LIHTC) is a tax credit given to owners for the construction or rehabilitation of low-income housing.

The program was created by the Tax Reform Act of 1986 as an alternate method of funding housing for low- and moderate-income households. Tax Credits must be used for new construction, rehabilitation, or acquisition and rehabilitation.

To qualify for the credit, the property must be at least 20 percent occupied by individuals with incomes of 50 percent or less for the area median income, or be at least 40 percent occupied by individuals with incomes of 60 percent or less of the area median income.

All fifty stses are allocated monies to be used toward the LIHTC program. Typically, the greater the population of the state, the more monie is allocated to the program in that particular state. For example; Currently the top five states - in order, are California, Texas, New York, Florida, and Illinois.

 

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