What is the Low Income Housing Tax Credit (LIHTC) Program?

The Low Income Housing Tax Credit Program (LIHTC) and HUD 221(d)(4) Loans

The Low Income Housing Tax Credit (LIHTC) program is a tax incentive designed to increase low-income housing availability. This tax credit can be claimed by developer-owners of LIHTC properties on their federal income taxes for up to ten years after the property’s completion and leasing up.

The tax credit is available as long as the property adheres to LIHTC requirements. Typically, this involves following either the “20/50” rule, which mandates that 20% of a project’s units be reserved for residents making less than or equal to 50% of the area median income (AMI), or the “40/60” rule, which mandates that 40% of a project’s units be reserved for residents making less than or equal to 60% of the AMI.

Properties using HUD 221(d)(4) loans and those using HUD 223(f) loans are both eligible for the LIHTC program.


To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form below and a HUD lending expert will get in touch.