LIHTC — Low-Income Housing Tax Credit
A federal tax incentive program that encourages private investment in the construction and rehabilitation of affordable rental housing for low-income.
Official source: hud.gov
The <a href="/glossary/public-housing">Low-Income Housing</a> Tax Credit (LIHTC) is a special program that helps build and fix up homes so they can be rented at lower prices to people who don't earn much money. It's not like getting money directly. Instead, the government gives tax breaks to companies that build or improve these homes. Because these companies get tax breaks, they can afford to charge less for rent.To live in a LIHTC home, your household’s income usually can't be more than 60% of what most people in your area make. Also, the rent you pay for these homes is set at a maximum amount, which is generally 30% of that 60% income level for your area. This helps make sure the rent is truly affordable. A common thing to know is that while LIHTC homes are cheaper, there might be a waiting list to get in because many people need affordable places to live. To find these homes, you can search affordable housing listings through your local housing authority.
In real life
- A builder used the LIHTC program to help pay for an apartment building where rents are kept low for families.
- Someone living on a small income found a good apartment thanks to a housing program that used LIHTC.
- A city wanted to build more affordable places to live and used LIHTC to get help from private companies.
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Frequently asked questions about LIHTC
What is Low-Income Housing Tax Credit (LIHTC)?+
A federal tax incentive program that encourages private investment in the construction and rehabilitation of affordable rental housing for low-income households. LIHTC is not a direct benefit — it funds the development of affordable housing units that then offer below-market rents.
Who qualifies for LIHTC?+
Households with income at or below local limits set by HUD; priority often goes to seniors, people with disabilities, and families with children.
How do I apply for LIHTC?+
Contact your local Public Housing Agency to get on the waiting list. Find yours at hud.gov.
Where can I get help?+
Contact your local Public Housing Agency for Section 8, public housing, and LIHEAP. BenefitKarma's Find Benefits tool lists housing programs for your state.
Source: hud.gov