Strategy HC2.5: Revise state policies related to low-income housing tax credits to enable greater availability and use of these tax credits.
The Low Income Housing Tax Credit (LIHTC) is one of the largest sources of federal funding for affordable housing, responsible for the creation or rehabilitation of over one million units of rental housing for low- and moderate-income families. The LIHTC is a federal program, but is administered principally through state housing finance agencies, giving states substantial discretion in setting priorities for allocating this valuable subsidy. The two types of tax credits—the 4 percent and the 9 percent—provide a range of opportunities for states and localities to increase and preserve the stock of affordable rental homes. Local advocates for housing should work with the North Carolina Housing Finance Agency to identify mechanisms that optimize use of the tax credits.