State Housing Finance Agencies (HFAs) were created to address the affordable housing needs of low and moderate-income persons by lending money for home purchases to first-time homebuyers and to assist in financing the development and preservation of affordable rental housing. Each state designates an agency (usually the housing finance agency) to administer the tax credit program. The agency must develop a plan for allocating the credits consistent with the state's consolidated plan. Federal law requires that the allocation plan give priority to projects that (a) serve the lowest income families and (b) are structured to remain affordable for the longest period of time.
If your firm has not yet used federal low-income housing tax credits (LIHTCs) to create affordable housing for low and moderate-income families, the program may seem complicated and difficult, but a wealth of information is at your fingertips. To determine whether a project qualifies for low-income housing tax credits, first, contact the agency responsible for tax credit allocation in your state to learn about the application process and the criteria by which the agency awards credits.