Illinois Affordable Housing Tax Credit

housing

Senior Suites of Bellwood (Bellwood)

 

The Illinois Affordable Housing Tax Credit (IAHTC) encourages private investment in affordable housing by providing donors of qualified donations with a one-time tax credit on their Illinois state income tax equal to 50 percent of the value of the donation. The donor can choose to transfer the credits to the project, which creates additional project financing through syndication of the credits.

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.

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

Eligible donations include money, securities, real estate or personal property. Donations must be provided, without consideration, to a qualified non-profit affordable housing 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 must exceed $10,000. All donors must submit a donor affidavit stating that they understand the donation is eligible for the IAHTC program and whether they will retain or transfer the tax credit certificate. The 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.

Donors may transfer some or all of their tax credits to another individual or entity. If the tax credits are transferred, the tax credit recipient must make a donation to the affordable housing project for which the credits were issued. 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.

The donor may also choose to transfer the credits to the project, which creates additional project financing through syndication of the credits.

For all but employer-assisted housing developments, 25 percent of the units in each development for rental projects and 100 percent of units in ownership projects must serve persons with incomes at or below 60 percent of the area median income. Rents or mortgage payments may not exceed 30 percent of the household income.

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.

You can find the Application Checklist and the documents that are require submission for all IAHTC resource requests in the Developer Resource Center.