Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities

U.S. Government Accountability Office

Low-income housing tax credit

Administering Agency/Entity Internal Revenue Service
Short Description Allows developers and owners of qualified low-income housing projects to claim a tax credit for construction or rehabilitation costs. State housing finance agencies (HFA) allocate the credit to projects. The amount available to each HFA is limited; in 2010, the amount was the greater of $2.10 per capita or $2.43 million in total. Generally, partnerships own low-income housing projects, and secure equity to fund the project by selling partnership interests in exchange for capital contributions. The partners then can claim the credit, as well as other tax benefits available to owners over a 10-year period. To qualify for the credit, a minimum amount of low-income housing must be provided. A 9 percent credit is available for new construction or substantial rehabilitation not otherwise subsidized by the federal government. An approximate 4 percent credit is available for the cost of acquiring an existing building, and is also available for housing financed with rental housing bonds.
Primary Purpose Assistance for financing rental housing
Type of Housing Supported Rental housing
Type of Assistance Tax credit
Estimated Revenue Loss1 $5,650,000,000

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