LIHTC Development

The LIHTC is attractive to developers because it can be leveraged with private capital to finance new construction, or for the acquisition and rehabilitation of existing affordable housing. Furthermore, the tax credit enables properties to be operated at below market rents and still produce competitive returns that attract investment.

Developers typically finance their developments with equity capital from tax-credit investors in combination with a loan from a bank or other lender, repaying the loan from net rental revenues. After a development has been awarded tax credits, the developer usually partners with a syndicator like Alliant to provide the equity.