The Low-Income Housing Tax Credit, or LIHTC, is the country's largest affordable rental-housing production program. It encourages private investment in properties that reserve qualifying apartments for income-eligible households.
For renters, the most important point is this: LIHTC is not the same as Section 8, and LIHTC rent is not automatically set at 30% of each tenant's actual income.
How LIHTC works
The federal government allocates housing tax credits to state housing credit agencies. States award credits to qualifying developments. Developers sell or syndicate the credits to investors and use the equity to build or rehabilitate rental housing.
In exchange, owners agree to income limits, rent limits, compliance monitoring, and an extended affordability period.
Who can live in an LIHTC apartment
Eligibility is based on the income limit assigned to the unit and the household's income under program rules.
A property may have units restricted at different percentages of Area Median Income. Limits vary by:
- Location
- Household size
- Unit designation
- Project elections
- State requirements
- Applicable federal rules
Ask the property which income limit applies to the specific unit. Do not rely on a general advertisement saying only “income restricted.”
How LIHTC rent is calculated
Maximum LIHTC gross rent is generally based on:
- The income limit associated with the unit
- An assumed household size based on the number of bedrooms
- A 30% affordability calculation
- A utility allowance for tenant-paid utilities
It is not generally recalculated as 30% of the actual income of each tenant.
This distinction matters. A very-low-income tenant may find an LIHTC apartment too expensive unless the unit also has project-based assistance or the tenant has a voucher.
LIHTC versus Section 8
LIHTC primarily finances and regulates affordable properties. Section 8 provides rental assistance.
A renter with a Housing Choice Voucher may sometimes use it in an LIHTC property if the owner accepts the voucher, the unit meets program requirements, and the PHA approves the rent and tenancy.
For a broader explanation, read Section 8 Housing Choice Voucher: Complete Guide and Public Housing Explained.
How to find LIHTC properties
Try:
- State housing finance agency property lists
- HUD's LIHTC database
- Local affordable-housing search portals
- City or county housing departments
- Individual property websites
- RentAssistance.org's directory
Database inclusion does not guarantee a current vacancy. Contact each property.
How to apply
- Contact the property management office.
- Ask which units are income restricted.
- Confirm the applicable income and student rules.
- Ask the current rent and utility allowance.
- Request the application and tenant-selection criteria.
- Submit household and income documentation.
- Complete annual recertification if required.
- Report household changes according to the lease and program rules.
Each property manages its own leasing and waiting list. There is no single national LIHTC tenant application.
Common LIHTC eligibility issues
Income above the limit
If household income exceeds the unit's limit at move-in, the household generally cannot occupy that restricted unit.
Full-time student rule
LIHTC has a special rule affecting households composed entirely of full-time students, with statutory exceptions. Ask management to evaluate your circumstances rather than assuming you are ineligible.
Assets and irregular income
Properties must verify income under applicable rules. Applicants with self-employment, seasonal work, gig income, or assets may need additional documentation.
Occupancy and bedroom standards
Properties can apply reasonable occupancy standards and unit-specific eligibility criteria.
Benefits for renters
LIHTC can:
- Increase the supply of income-restricted apartments
- Finance new construction and rehabilitation
- Preserve affordability for an extended period
- Support mixed-income communities
- Work alongside vouchers and other subsidies
Limitations
- Rent may still be too high for extremely-low-income households.
- Available units and bedroom sizes may be limited.
- Properties can have waiting lists.
- Affordability requirements eventually expire or change.
- LIHTC does not by itself guarantee supportive services.
- A qualifying income does not guarantee approval under lawful screening criteria.
What to ask before applying
- What AMI level applies to this unit?
- What is the gross rent?
- Which utilities are included?
- What utility allowance is used?
- Is rental assistance attached to the unit?
- Are vouchers accepted?
- Is there a waiting list?
- Is there an application or screening fee?
- What are the student rules?
- How often is income recertified?
- How long is the unit required to remain affordable?
Frequently asked questions
Is LIHTC public housing?
No. LIHTC properties are generally privately or nonprofit owned, although public entities can participate in developments.
Will my rent decrease if my income drops?
Not necessarily. LIHTC rent is not usually based on your actual income. If the unit has a separate income-based subsidy, that subsidy may change the tenant payment.
Can I use a Section 8 voucher in an LIHTC property?
Often yes, subject to landlord participation, PHA approval, rent reasonableness, inspection, and other voucher rules.
Are all units in an LIHTC property affordable?
Not always. Some projects are mixed-income, with both restricted and market-rate units.
Official resources
- HUD LIHTC program information and database
- IRS Guide for Completing Form 8823
- HUD income limits
- National Council of State Housing Agencies directory
Find affordable housing resources: Search programs near you.
Independent-site disclaimer: RentAssistance.org is an independent directory and informational website. It is not a government agency, Public Housing Agency, or HUD-affiliated organization. Program availability, eligibility rules, waiting-list status, and application procedures vary by location and may change. Confirm details directly with the administering agency before applying.