Hope Manor (Chicago)
The Low Income Housing Tax Credit (LIHTC, Housing Credit) is a dollar-for-dollar federal tax credit for affordable housing investments. It was created under the Tax Reform Act of 1986 and gives incentives for the utilization of private equity in the development of affordable housing aimed at low-income Americans. The program is administered at the state level by state housing finance agencies (i.e. IHDA) with each state getting a fixed allocation of credits based on its population. IHDA evaluates applications against our “Qualified Allocation Plan” (QAP).
LIHTC accounts for the majority (approximately 90%) of all affordable rental housing created in the United States today, and is the most successful affordable housing tool in Illinois. The tax credits are more attractive than tax deductions as the credits provide a dollar-for-dollar reduction in a taxpayer’s federal income tax, whereas a tax deduction only provides a reduction in taxable income. Almost all investors in LIHTC projects are corporations.
The maximum rent that can be charged is based upon the Area Median Income (“AMI”) and is capped at 60% of AMI. Rents must be kept affordable for a 15-year initial “compliance period” and a subsequent 15-year “extended use period”.
LIHTC is awarded under two different methodologies. Under either methodology, a project’s “eligible basis” is determined (for an in-depth explanation of what constitutes eligible basis, please see the QAP). Projects for new construction or rehabilitation of an existing building, if not funded by tax-exempt bonds, can receive a maximum annual tax credit allocation based on a rate which is generally 9% of the project’s eligible basis (“9% credits”). IHDA awards 9% credits based on a competitive process via two allocation rounds per year.
Projects with at least 50% of the financing coming from tax-exempt bonds can receive a maximum annual tax credit allocation based on a rate which is generally 4% of the project’s eligible basis (“4% credits”). IHDA accepts applications for tax-exempt bond projects seeking 4% credits at any time. These credits are not awarded via a competitive application round and therefore the project need only satisfy the mandatory requirements under the QAP.
A developer proposes a project to IHDA, wins an allocation of tax credits, completes the project, certifies its cost, and rents-up the project to low-income tenants. Simultaneously, an investor makes a “capital contribution” to the project’s owner in exchange for being “allocated” the entity’s LIHTCs over a ten-year period (syndication).The program’s structure as part of the tax code ensures that private investors bear the financial burden if properties are not successful. This pay-for-performance accountability has driven private sector discipline to the LIHTC program, resulting in a foreclosure rate of less than 0.1%, far less than that of comparable market-rate properties. As a permanent part of the tax code, the LIHTC program necessitates public-private partnerships, and has leveraged more than $100 billion in private equity investment for the creation of affordable rental housing nationally.
The annual Qualified Allocation Plan (QAP) sets forth the criteria for evaluating all projects that apply for a tax credit allocation. The QAP takes effect upon the approval of the IHDA board and the governor.
2016-2017 Qualified Allocation Plan
For previous QAPs, please visit our Developer Resource Center.
IRS regulations for the federal tax credit program are found in Section 42 of the Code of 1986, as amended. Additionally, state rules governing the LIHTC program are found in the Illinois Administrative Code, Title 47, Chapter II, Part 350.
Recent PPA and LIHTC Full Round Results
2017
2017 – Full Applications Received
2017 Round II
Preliminary Project Assessment Submissions
Approved Preliminary Project Assessment Submissions
2017 Round I
Preliminary Project Assessment Submissions
Approved Preliminary Project Assessment Submissions
2016 Round II
Preliminary Project Assessment Submissions
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
Round II LIHTC Scoring Ranges
2016 Round I
Preliminary Project Assessment Submissions
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
Round I LIHTC Scoring Ranges
2015 Round II
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2015 Round I
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2014 Round II
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2014 Round I
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2013 Round II
Approved Preliminary Project Assessments (Updated 6/5/13)
Full Applications Received
LIHTC Projects Approved – Final
2013 Round I
Full Applications Received
LIHTC Projects Approved – Final
2012 Round II
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2012 Round I
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved – Final
2011
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved-Final
2010
Approved Preliminary Project Assessments
Full Applications Received
LIHTC Projects Approved, including Disaster Tax Credits-Final
2009 Round II
LIHTC Projects Approved, including Disaster Tax Credits – Final
2009 Round I
LIHTC Projects Approved-Final
2017 QAP Schedule
*Please note that all application materials are due to IHDA by 5:00 p.m. on the respective dates listed here.
| 2017 – 1st Quarter | Event | Date |
| March | Round II 2017 PPAs Due | 3/3/2017 |
| 2017 – 2nd Quarter | Event | Date |
| April | Round II 2017 PPA Announcements | 4/28/2017 |
| June | 2017 LIHTC Applications Due | 6/23/2017 |
| 2017 – 3rd Quarter | Event | Date |
| July | QAP Summit – Springfield | 7/10/2017 |
| July | QAP Summit – Belleville | 7/10/2017 |
| July | QAP Summit – Rockford | 7/13/2017 |
| July | QAP Summit – Chicago | 7/21/2017 |
| September | 2017 LIHTC Board | 9/29/2017 |
*Please note that all application materials are due to IHDA by 5:00 p.m. on the respective dates listed here.
IHDA is excited to once again host QAP Summits. Please take advantage of this opportunity to discuss the effectiveness of current and future QAP incentives. IHDA intends these sessions to be a partnership building exchange where IHDA will share preliminary thoughts regarding major changes being planned for the next QAP and will receive input and suggestions from the affordable housing community. The dates, times and locations of the 2017 QAP Summits are as follows:
July 10, 2017 – Springfield
10:00 a.m. – 12:00 p.m.
Wyndham Springfield City Centre – Plaza 3
700 E. Adams St.
Springfield, IL 62701
July 10, 2017 – Belleville
3:00 p.m. – 5:00 p.m.
Belleville Public Library
121 East Washington
Belleville, IL 62220
July 13, 2017- Rockford
10:00 a.m. – 12:00 p.m.
Rockford Public Library (Nordlof Center)
Sullivan Theater
118 N. Main Street
Rockford, IL 61101
July 21, 2017 – Chicago
1:30 p.m. – 3:30 p.m.
Illinois Housing Development Authority
111 East Wacker Dr. Suite 1000
Chicago, IL 60601
Please save these dates. Information on how to register for the summits will be forthcoming.
