Low-Income Housing Tax Credits
The Federal Tax Reform Act of 1986 created Low-Income Housing Tax Credits for qualified residential properties to encourage the production of affordable low-income rental housing.
Credits provide a reduction in federal tax liability to owners and investors of qualified low-income housing developments. The owner/investors may use Credits annually for ten years, but qualified low-income housing projects must comply with federally-imposed rent and tenant income restrictions for 15 years with an extended use period of an additional 15 years. At a minimum, 40% of the units must be affordable and rented to households at or below 60% of the area median income (AMI) or 20% of units must be affordable and rented to households at or below 50% of AMI for the duration of the restricted period. Federal law also gives preference to selected properties which serve the lowest income qualified tenants for the longest period, and projects which are located in qualified census tracts for community revitalization.
The Housing and Redevelopment Authority (HRA) of the City of Saint Paul is accepting applications for the 2018 Federal Low-Income Housing Tax Credits for eligible rent housing developments located within the boundaries of the City of Saint Paul. The program offers a reduction in the tax liability to owners and investors in eligible low-income new construction, rehabilitation and/or acquisition of existing rental buildings. The HRA is anticipating an allocation of $760,022 of Low-Income Housing Tax Credits in 2018.
NOTE: Regarding ongoing Compliance requirements, the Housing Tax Credit Program Compliance Manual as well as other relevant tax credit compliance information is currently available at the Affordable Housing Connections website.