Low-Income Housing Tax Credit
Definition of 'Low-Income Housing Tax Credit'
The LIHTC is a valuable tool for creating affordable housing because it can leverage private capital to build or rehabilitate affordable housing units. The program is also flexible, allowing developers to use a variety of financing structures to create affordable housing projects.
To qualify for the LIHTC, a project must meet certain requirements, including:
* The project must be located in a qualified census tract or area.
* The project must provide affordable housing units for households with incomes at or below 60% of the area median income (AMI).
* The project must be developed by a qualified developer.
* The project must be financed with a qualified equity investment.
The LIHTC is a valuable tool for creating affordable housing, but it is not without its challenges. One challenge is that the program is subject to annual funding limits. This can make it difficult for developers to secure LIHTCs for their projects.
Another challenge is that the LIHTC is a complex program with a number of requirements. This can make it difficult for developers to understand and comply with the program's requirements.
Despite these challenges, the LIHTC is a valuable tool for creating affordable housing. The program has helped to create over 2.5 million affordable housing units since its inception in 1986.
The LIHTC is a key component of the U.S. government's efforts to address the affordable housing crisis. The program is a successful public-private partnership that has helped to create affordable housing units for low-income households.
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