The Housing Credit

The Low-Income Housing Tax Credit (Housing Credit) is our nation’s primary tool to create and preserve affordable rental housing.

Since 1986, the Housing Credit has financed the development of more than 3.5 million affordable homes in urban, suburban, and rural areas according to the National Council of State Housing Agencies.
These apartments have provided affordable homes to over eight million low-income households, including veterans of the armed forces, senior citizens, individuals with disabilities, families with children, and low-wage workers.

Since 1986 the Housing Credit has generated $593 billion in wages and business income and $206 billion in tax revenue, and has supported 5.2 million jobs, according to the National Association of Home Builders.

Approximately 45 percent of households served are extremely low-income, making 30 percent or less of area median income, according to HUD data.
Households living in Housing Credit properties have a median annual income of less than $18,000. If forced to pay market-rate rent, many of these households would be just one unforeseen event away from losing their housing.

Due to strong private-sector oversight stemming from the Housing Credit’s public-private partnership model, properties are built to durable, high-quality standards.
Since inception, the total foreclosure rate for all Housing Credit properties has been only 0.65 percent, which is lower than any real estate asset class, according to accounting firm CohnReznick.

The Housing Credit allows states to set their own affordable housing priorities and to award Housing Credits based on those priorities, e.g. senior housing, housing for veterans, housing in rural areas, or housing for special populations, such as extremely low-income households.
Housing Credit properties are built in large and small urban areas, suburban communities, rural towns, and on tribal land.
The Housing Credit has also been important for communities recovering from natural disasters – from the California wildfires to Hurricane Katrina to the floods in Iowa.

There is a vast and growing demand for affordable housing. More than 10 million low-income households spend more than half of their monthly income on rent, cutting into other essential expenses like childcare, medicine, groceries and transportation, according to Harvard’s Joint Center for Housing Studies.
Meanwhile, there is a growing shortage of affordable housing: For every 100 extremely low-income households, there are only 37 affordable homes available, according to the National Low Income Housing Coalition. There is also a shortage of 7.1 million rental homes affordable and available for households making 50 percent of area median income and below.
Virtually no new affordable housing can be constructed without the Housing Credit. As the affordable housing crisis continues to grow, it will be essential to expand and strengthen the Housing Credit.