The Low-Income Housing Tax Credit (Housing Credit) provides the private sector with an incentive to invest in affordable rental housing. Since 1986, the Housing Credit has financed more than 2.8 million affordable apartments nationwide, at a rate of nearly 100,000 per year. These properties have provided roughly 6.7 million low-income families, seniors, veterans, and people with disabilities homes they can afford. It has provided affordable housing to all 50 states and all types of communities, including urban, suburban, and rural.
The federal government issues Housing Credits to states based on their populations each year. States then establish credit allocation plans and the credits are then awarded to developers. You can learn more about how states prioritize their various housing needs in the Housing Credit program by visiting our preservation catalog, PrezCat.
Developers use the Housing Credit to raise equity capital from investors, which reduces the debt that would otherwise be required to build the property and makes it possible to offer apartments to low-income residents at an affordable rent.
Since its creation, Housing Credits have generated $310 billion in local income and $122 billion in tax revenues, and has supported approximately 3.25 million jobs over the past 30 years. Each year, Housing Credit development supports approximately 96,000 jobs across the country, while generating $3.5 billion in federal, state and local taxes and $9.1 billion in economic income.
Tax-Exempt Multifamily Housing Bonds and 4% Low Income Housing Tax Credits
4% Low Income Tax Credits that are allocated in conjunction with Tax-Exempt Multifamily Housing Bonds are an essential tool for preserving affordable housing. Housing Bonds and 4% Housing Credits are responsible for financing more than 40 percent of annual Housing Credit production.
Learn more about how states deploy their 4% Low Income Housing Tax Credits by visiting our preservation catalog, PrezCat.