Illinois Affordable Housing Tax Credit (IAHTC)

The Illinois Affordable Housing Tax Credit (IAHTC) program encourages private investment in affordable housing by providing donors to qualified non-profit affordable housing sponsors with a tax credit on their Illinois state income tax equal to 50 percent of the donation.

IHDA administers the statewide program, and the City of Chicago’s Department of Housing and Economic Development (HED) administers the program in the City of Chicago. IHDA receives 75.5 percent of the annual IAHTC allocation, while the City of Chicago receives 24.5 percent. Each administrative entity has its own application process.

Program rules and guidelines

Rules governing the IAHTC program are found in the Illinois Administrative Code, Title 47, Chapter II, Part 355.

A donation must occur within 12 months of the receipt of an IAHTC reservation. Non-employer-assisted housing projects may apply for a 12-month extension in writing. During this time, the sponsor must procure any additional financing needed to complete the project. The administering agency will issue the credits upon receipt of evidence of the donation and other project information, such as final cost, unit mix and financing on IHDA forms. Transfer of credits from the donor to the project can create additional project financing resources.

Eligible donations

Eligible donations include money, securities, or real or personal property provided without consideration to a sponsor for an affordable housing project. The donations may be aggregated if more than one donation is received for a development, but the total donation may never be less than $10,000. All donors must submit a donor affidavit stating that they understand they are making a donation that is eligible for the Illinois Affordable Housing Tax Credit program and if they will be keeping or transferring the tax credit certificate.

Eligible costs

Costs associated with purchasing, rehabilitating, constructing or providing financing for a development are eligible; technical assistance for the project, or general operating support of the sponsor in connection with the project are also eligible costs, but will only be available until the set-aside for these costs is expended.

Credit transfers

Donors may transfer some or all of their IAHTCs to another individual or entity. The individual or entity receiving the transfer of credits must make a donation to the affordable housing project at the time of transfer. If the amount transferred is less than $100,000, the donation must be 10 percent of the amount transferred. The donation must be $10,000 for amounts $100,000 and greater.

Income levels served

For all but employer-assisted housing developments, 25 percent of the units in each development must serve persons with incomes of 60 percent of the area median income or less. Rents or mortgage payments may not exceed 30 percent of the household income.

Employer–assisted housing

For employer-assisted housing developments, 100 percent of units must serve eligible employees whose adjusted income is equal to 120 percent or less of the area median income. Eligible activities for employer-assisted housing include: down payment and closing cost assistance, reduced-interest mortgages, mortgage guarantee programs, rental subsidies and individual development account savings plans.

Applying for IAHTC

Applications are accepted year-round. IHDA will review applications for financial feasibility, impact on the local housing market and conformity with program preferences.

For information about applying for Illinois Affordable Housing Tax Credits, please see application for multifamily financing and program timelines.