The Low-Income Housing Tax Credit (LIHTC) program is the most important resource for creating affordable housing in the United States today. The LIHTC database, created by HUD and available to the public since 1997, contains information on 48,672 projects and 3.23 million housing units placed in service between 1987 and 2018.
Program criteria require affordable rents to low-income households often for a period of 30 years, but with a minimum of 15 years. These units typically are made affordable to households earning 50% to 60% of the area median income (AMI). Currently, a housing unit is deemed affordable if the household is paying no more than 30% of its income for housing costs (including utilities).
The tax credit program includes a 4% tax credit and a competitive 9% tax credit. For both, the process for allocating tax credits is guided by federal regulations and distributed by states. Federal regulations incentivize development in high-poverty census tracts and areas where development is most difficult because of high construction costs, among other criteria. For Cincinnati, the Ohio Housing Finance Agency (OHFA) competitively distributes 9% credits to projects based on priorities they set each year through the Qualified Allocation Plan (QAP).
Financing and structuring an LIHTC deal requires several partners. In addition to federal, state, and often local government agencies, deals involve equity investors, who invest in a property in exchange for tax credits; attorneys, who navigate the legal process; and project developers or owners, who build and manage the property. Sometimes other housing funds are leveraged to finance projects. These funds can include the HOME Investment Partnerships Program and the Community Development Block Grant program, both run by the US Department of Housing and Urban Development.
For Developers to receive letters supporting their LIHTC applications to OHFA, they will need to submit the one-page letter request form and any attachments to the Department of Community & Economic Development by Friday, January 14, 2022, by 3:00 PM EST. Click the link below to access the LIHTC Letter Request Form. Submissions should be sent to email@example.com.
If you have any questions regarding the process or would like to schedule a meeting to learn more, please contact Anthony Cadle, Development Manager at (513) 352-6118 or firstname.lastname@example.org.