Looking for affordable rental housing for low-income households? Look no further than the Housing Tax Credit (HTC) program, which directs private capital towards developing and preserving affordable housing. Funded by the U.S. Treasury Department and overseen by the Internal Revenue Service, this program provides equity financing for affordable housing, maximizes the number of affordable units, ensures well-maintained and operated housing, and prevents losses in the affordable housing supply. Eligible participants can receive tax credits to offset federal tax liability in exchange for producing or preserving affordable rental housing. There are two types of HTCs: Competitive (9%) and Non-Competitive (4%), and private for-profit and nonprofit multifamily housing developers are eligible to apply for housing tax credits.
If you’re a tenant earning up to 60% of the area median family income (AMFI) for your household size, you may qualify for a reduced rent unit through the HTC program. HTC units offer income-qualified tenants a unit at a reduced rental rate, while Section 8 determines rent based on 30% of a tenant’s actual income.
Regarding the HTC program types, 9% HTC applications are scored and ranked within their region or set-aside based on various criteria, while 4% HTC applications are accepted throughout the year and available statewide. 9% HTC applications allow public comment and are subject to scoring criteria found in state law and program rules, while the local governing body may submit a certified resolution expressing objection or no objection to 4% HTC developments.
Final funding decisions on all HTC applications are made by TDHCA’s Governing Board, which also monitors and physically inspects all properties that have received tax credits and/or multifamily funds from any TDHCA program. Properties that do not follow applicable program rules and regulations may be subject to penalties or debarment from TDHCA’s affordable multifamily programs. TDHCA monitors properties on a routine schedule and for up to 40 years or the term of their affordability period.
Looking for resources related to the HTC program? Check out the Vacancy Clearinghouse to search for affordable rental properties, or direct complaints about HTC properties to the TDHCA Housing Resource Center (HRC) line. The TDHCA Public Comment Center provides resources for participating in the public comment process, and federal regulations guiding the program can be found in IRC Code Section 42 or by visiting the NOFAs and Rules page.
In the highly competitive 9% HTC program, separate set-asides are available for at-risk and USDA-assisted developments, and at least 10% of the allocation must be used for qualified non-profits. Scoring criteria range from financial feasibility to various indicators of local support, amenities, and services for tenants. HTC rental rates may increase or decrease annually based on published limits, while Section 8 rents increase only when the occupying household’s income increases or decreases.