LIHTC Income Limits, Rent Limits and Utility Allowances

Section 42 Low Income Housing Tax Credit (LIHTC) properties impose maximum household income limits that are based upon Area Median Income (AMI). Rent restrictions are also derived from the AMI and tenant-paid utility costs (the “utility allowance”.) AMI varies depending location and household size and is revised annually. However, a household is not required to vacate a unit if its income later exceeds the LIHTC limits. At least 20% of…

Understanding the LIHTC (Low Income Housing Tax Credit)

Introducing the LIHTC The Section 42 Low Income Housing Tax Credit (LIHTC) program is a federal tax incentive that encourages private sector investors, developers and lenders to finance, construct and operate affordable housing. Since the program’s founding in 1986, LIHTC tax credits have been allocated for the construction and rehabilitation of more than three million housing units. About one of every six units of new rental housing built in the…