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Housing Tax Credit Program

Credit for Developing Our Communities

The federal low-income housing tax credit program acts as an incentive for property owners to invest in the development of rental housing for individuals and families with fixed or limited incomes.

The housing tax credit provides a dollar for dollar reduction (or credit) to offset an owner’s federal tax liability on ordinary income for a 10-year period.

This tax credit often provides the last critical element to ensure the financial feasibility of the project.

These affordable housing developments often attract young professionals, working families, seniors or persons with disabilities who are unable to maintain a house but want to live independently.

9% Housing Tax Credit Program

Determination of Credit Amount

The amount of the credit is limited to no more than the amount necessary for the financial feasibility of the project. The credit amount is determined as a percentage of the “qualified” cost of development. The maximum percentage for new construction and rehabilitation is 9%. The maximum percentage for acquisition and federally subsidized projects is approximately 4%.

Eligibility Requirements

  • Must be a residential rental property.

  • Be new construction, substantial rehabilitation or acquisition and rehabilitation project

  • Must meet one of the following requirements:
    • 20% or more of the units in the project will be occupied by individuals or families whose income is 50% or less than the area median gross income (AMI) and the unit is rent-restricted.
    • 40% or more of the units in the project will be occupied by individuals or families whose income is 60% or less than the area median gross income (AMI) and the unit is rent-restricted.
    • 40% or more of the units in the project will be occupied by individuals or families whose income is 80% or less than the area median gross income (AMI) and the units are rent-restricted, as long as the average income/rent limit in the project is 60% or less AMI.

Applicants

  • Individuals

  • Nonprofit or for-profit organizations

  • Partnerships

  • Limited Liability Companies

Application Facts

  • The 9% housing tax credit program is a highly-competitive process, and applications may be submitted annually.

  • Potential applicants are encouraged to familiarize themselves with all requirements, including previous experience and training.

  • Full requirements are available in the Qualified Allocation Plan for that year.

  • Online Application Create & Submit an Application

4% Housing Tax Credit Program

Application Procedures

The application requirements are detailed in the 4% Qualified Allocation Plan. Applications are accepted on an ongoing basis.

Reservation Procedures

An administrative review is conducted on each application. The application must pass threshold requirements for the Housing Tax Credit Program. A non-refundable reservation fee is assessed at 1% of the total 10-year tax credit amount.

Determination of Credit Amount

The amount of credit is limited to no more than the amount necessary for the financial feasibility of the project. The credit is determined by taking a percentage of the “qualified” costs of the development.

Compliance

IFA monitors all housing tax credit, HOME program and National Housing Tax Credit projects for compliance throughout the designated compliance period.

Compliance Information

For questions about tax credits reach out to

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