…that can make it difficult to develop affordable housing projects. The complexities of the program include lengthy application processes and a variety of funding sources, as well as regulations that must be met in order for developers to qualify for the tax credits. Developers must also be aware of the different program requirements in each state, and must work with local governments to ensure that projects adhere to all applicable laws and regulations. LIHTC projects typically require partnerships between developers, investors, lenders and government entities. All of these factors create a complicated environment where timing is critical and errors can have costly consequences. Despite the complexities, the LIHTC Program remains one of the most important tools available to developers and investors for creating affordable housing projects. With careful planning and experienced professionals, it is possible to navigate the complexities of the program and successfully develop much needed affordable housing.
Time and again our team of licensed, bonded, and insured professionals have provided high-quality results on all our LIHTC construction and renovation projects. With our training, expertise, and enthusiasm, we ensure all parties—the property owner, developer, and tenant—are satisfied.
The Low-Income Housing Tax Credit (LIHTC) program is a federal initiative designed to promote the development of affordable rental housing for low-income families. To qualify for the LIHTC program, a property must meet certain criteria, such as being newly constructed or substantially rehabilitated and having at least 20% of its units occupied by households with incomes at or below 50% of the area median income. Additionally, the rents for LIHTC units are generally limited to 30% of a household’s income and must meet certain affordability requirements. The LIHTC program is administered by state housing finance agencies and provides developers with a dollar-for-dollar tax credit based on their qualified investments in affordable housing projects. By utilizing the LIHTC program, developers are able to finance the construction or rehabilitation of properties that would otherwise be cost-prohibitive in order to increase the availability of quality affordable rental housing. The LIHTC program is an important tool for providing affordable housing for low-income Americans and has been instrumental in helping to make affordable housing a reality. As such, it is essential that commercial property owners are aware of the qualifications for participating in the LIHTC program so they can take advantage of this important housing initiative.
Single-family, multi-family units, duplexes and apartment buildings can all be qualified for the Low-Income Housing Tax Credit. However, there is an income test and rent tests that property owners or developers must meet before they can get the tax credit. According to the Tax Policy Center, they can meet the income test in the following ways:
The federal government’s issuance of a state government tax credit is the starting point for affordable housing developers. This allows state housing agencies to award credits to developers via a competitive process. To finance their projects, these developers will then sell the credits to private investors. After that, construction and renovation are necessary in order for the project to be made available to tenants. Here, the experienced professionals at Rival Construction can provide valuable assistance in making sure that the project is completed to a high standard and ready for habitation. With expertise spanning decades, you can count on Rival Construction to provide the highest quality services throughout your affordable housing project’s journey.