Opinion ID: 2377818
Heading Depth: 3
Heading Rank: 1

Heading: LIHTC Program Properties

Text: Congress created the low-income housing tax credit (LIHTC) program as part of the Tax Reform Act of 1986. [1] The program is intended to encourage the private sector to develop affordable rental housing. [2] Each state receives and distributes an annual allotment of low-income housing tax credits based on the state's population. [3] A developer can apply for a ten-year allocation of federal income tax credits, [4] but must commit to record a restrictive covenant to rent to low-income households at restricted rental rates for not less than 30 years, [5] certify compliance annually, [6] and keep compliance records. [7] The tax credits depend on continuing compliance and may be recaptured. [8] Typically a developer finances a LIHTC project by attracting limited liability partners to invest in return for use of the stream of tax credits. [9] Tax credits can also be transferred through sale of the property, provided the new owner continues to comply with the LIHTC program. [10]