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Low-Income Housing Tax Credit Program

The Tax Reform Act of 1986 created the tax credit as an incentive for Low-Income Housing Tax Credit (LIHTC) project owners to invest in the development of rental housing for individuals and families with fixed or limited incomes. The tax credit, rather than a direct federal subsidy, provides a dollar for dollar reduction (or credit) to offset an owner's federal tax liability on ordinary income. Tax credit interest may be syndicated or sold to generate equity for the developments, thus reducing the necessary mortgage financing and providing more affordable terms. The tax credit frequently provides the last critical element to ensure the financial feasibility of the project.

The Iowa Finance Authority (IFA) has been the tax credit allocating agency for the state of Iowa since 1986.  Since then, IFA has helped create more than 17,000 LIHTC units in more than 400 projects located in 83 counties throughout Iowa.

IFA also monitors all tax credits developments for compliance throughout the designated compliance period. 

SPECIAL UPDATE: At the Iowa Finance Authority Board of Director’s special telephonic board meeting held Monday, August 18, 2008, the Board passed a resolution approving the 2009 First Amended Qualified Allocation Plan (QAP) for the Low-Income Housing Tax Credit Program (LIHTC).  The primary changes to the QAP include the addition of Section 2.2.4, Disaster Relief Set-Aside, and other allowances created by the Housing and Economic Recovery Act of 2008.  IFA has decided to apply the thirty percent (30%) increase in eligible basis to projects in counties designated through the Disaster Relief Set-Aside as needing the additional basis in order to be financially feasible. The 2009 First Amended Qualified Allocation Plan went into effect on September 3, 2008, and replaces the original, filed 2009 Qualified Allocation Plan.  Formal comments about the 2009 First Amended Qualified Allocation Plan will be accepted from September 10, 2008, through September 30, 2008.  Send comments to Carla Pope, Director of Affordable Rental Production. The 2009 LIHTC Application was posted on this Web site on September 3, 2008.  Drafts of accompanying appendices and exhibits have also been posted.

PROGRAM ELIGIBILITY 
An eligible LIHTC project must be a residential rental property.  The property may be apartments, single-family houses, duplexes, town homes or condominiums.

If a project is eligible, the owner will receive a tax credit for 10 years, with one of the following options:

• 20% or more of the units in the project are occupied by individuals or families whose income is 50% or less than the area median gross income and the unit is rent restricted.
• 40% percent or more of the units in the project are occupied by individuals or families whose income is 60% or less than the area median gross income and the unit is rent restricted.

The credit is available to individuals, corporations and partnerships for new construction, substantial rehabilitation or acquisition and rehabilitation of LIHTC projects.

The credit is available to nonprofit and for-profit organizations.

ALLOCATION INFORMATION Reserved Set-Aside 9% Tax Credits 4% Tax Credits With Tax-Exempt Bonds OTHER Applicant Fee Remittance Form Active Tax Credit Projects by County Historical Tax Credit Rates Request to Copy/Review Tax Credit Files

COMPLIANCE INFORMATION Property Tax Related Forms and Documents