Program Overview
The Low Income Housing Tax Credit (LIHTC) Program was enacted by Congress under the Tax Reform ACT of 1986. State agencies, such as the California Tax Credit Allocation Committee (CTCAC), Idaho Housing and Finance Agency (IHFA) and Oregon Housing and Community Services (OHCS) are responsible for allocating tax credits to properties like yours at the state level. The allocation of tax credits is handled by the owners of your property and is established by the time the property is built.
The LIHTC program allows owners of apartment buildings to provide affordable housing to households that meet income and other eligibility guidelines. The amount of credits allocated to properties is related to the number of qualified low-income units that meet federal and income limit requirements.
You play a very important role in ensuring the property can keep its tax credits by:
- Determining income and all other eligibility requirements are being met for both applicants and residents.
- Ensuring any and all non-compliance (whether it be related to resident files or physical aspects of the property) are actively being addressed and corrected
- Ensuring that no fraud has been or is being committed by any residents in regards to income, assets, household composition or student status.
- Maintaining an attractive and clean property
Compliance Period
When your property is built, the owners of your property “promised” the tax credit allocation committee for your state that the property would remain compliant with affordability and eligibility requirements in exchange for the tax credits issued for at least fifteen (15) years. This period is known as the Compliance Period. Additionally, the owners promised that not only would the property remain in compliance for the first fifteen (15) years, but the property would remain in compliance for AT LEAST fifteen (15) more years after that – for a total of at least thirty (30) years.
Throughout the first fifteen years (aka the Compliance Period), your property is consistently monitored by the state agency to ensure that income and other eligibility requirements are being followed. After the Compliance Period, your property is still subject to monitoring by state agencies; this period is known as the Extended Use Period. There are a few differences for properties in the Extended Use Period. These properties are still required to recertify households after the first 12 months of tenancy. However, some property owners of Extended Use Periods do not require a recertification to be completed after the first recertification; instead households can “self-certify.” There are very few properties Cambridge manages that are in its Extended Use Period; therefore, please consult your Property Supervisor to understand if your property is one of them.
Tax Credit Manual by State
- Oregon – LIHTC Compliance Manual
- Idaho – Low Income Housing Tax Credit Manual (IHFA)
- California – Tax Credit Allocation Committee Compliance Reference Manual