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  MULTI-FAMILY HOUSING

LOW-INCOME HOUSING TAX CREDIT PROGRAM

Description and General Information

Multi-Family Housing
Low-Income Housing Tax Credit Program

Created by the Tax Reform Act of 1986, the Low-Income Housing Tax Credit (LIHTC) program gave State and local LIHTC-allocating agencies authority to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. This program provides incentives for non-profit and profit motivated organizations and businesses to develop housing for low-income persons and families.

Arkansas receives an allocation of approximately $6.5 million in Low-Income Housing Tax Credits per year. This does not include tax credit developments utilizing tax-exempt bond financing.

Program Guidelines

     Tax Credits may be provided to owners of residential rental developments providing low-income housing units. The credits are taken annually for a term of ten years beginning with the tax year in which the development is placed in service or the following year.

     The maximum allowable annual credits are computed so that the annual credits equals approximately 9% of the total development costs, minus the land cost. Developments must be conventionally financed and reserved for low-income residents of newly constructed or substantially rehabilitated developments.

     Tax credits equal to approximately 4% of the total project cost, minus land cost, are available for new construction or substantial rehabilitation developments financed with tax-exempt bond financing and or other federal funds. Acquired developments must be rehabilitated in an amount exceeding $15,000 per unit, and acquisition of an existing development must meet several requirements to be eligible for tax credits such as not having changed ownership in the past ten years.

       All developments receiving tax credits must comply with income and rent limitations for a minimum of 30 years.

For more information about the Low-Income Housing Tax Credit Program call Kuhl Brown, Multi-Family Housing Manager, 501-682-5927 or kuhl.brown@adfa.arkansas.gov .

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