What Is LIHTC

What is LIHTC?

 

What is LIHTC – Affordable housing developers use LIHTC which stands for low income housing tax credits.  This is section 42 of the Internal Revenue Code (IRC).  Passed back in 1986, its purpose is to provide an economic framework, incentive and mechanism to develop, build and renovate affordable housing units across the country and Puerto Rico.  This program has been very successful in meeting its primary objectives as thousands and thousands of apartment units have been constructed via this federal program. Many states also have their own versions of this program.

 

There are two primary federal LIHTC programs that account for the majority of the affordable housing transactions in this particular industry.  The 4% tax credit program and the 9% tax credit program.  The 4% tax credit program is used with private activity bonds to finance these transactions while the 9% tax credit is used with regular conventional debt to finance these transactions.

What Is LIHTC. Blue Moon Realty Group

Each state administers this program by issuing a primary document called the Qualified Allocation Plan (QAP) The housing objectives of each state is discussed in these plans and the QAP is updated yearly as these objectives or priorities change.  This is a extremely large subject and worth your time to learn more. 

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We Buy HousesRick ToneyToneyRickPrincipalOffice210 Pine StreetHolbrookMassachusetts02343United StatesReal Estate Investing

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Rick Toney

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Rick Toney Is A Seasoned Real Estate Professional With Over 25 Years Of Real Estate Experience, Writes A Weekly Real Estate Blog And Is A Principal of Blue Moon Realty Group And Mesa Realty Advisors. Blue Moon Realty Group Is A Residential Redevelopment Company Specializing In The Purchase And Renovation Of Older And Physically Distressed Homes (Flip This House Boston). Mesa Realty Advisors Is An Affordable Housing Developer Specializing In The Redevelopment Of Existing Low-Income Housing Properties. Rick Is A Certified Public Accountant (CPA - Retired) In The State Of California, A Certified Property Manager (CPM - Retired) And A Real Estate Broker In The States Of California (Retired) And Massachusetts.

1 Comment

  1. Andrew ClauerFebruary 14, 2018

    Short and easy to read. A huge subject!!!

    Reply

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