How it Works
Developers of affordable rental housing developments apply to EOHLC for tax credits. If they are awarded the credit, the developers (either for-profit or nonprofit) seek investors to help pay for the development of the housing. Intermediaries (known as syndicators) act as a bridge between investors and projects and often pool investors' money into equity funds. In exchange for providing development funds, the investors receive a stream of tax credits. Projects can qualify for two types of credits: a 9% credit, or a 4% credit.* Tax credits can be claimed by the investors for 10 years. For example, based on an investor willing to pay $.75/tax credit dollar, a project eligible for $500,000 in annual credits, would receive $3,750,000 ($500,000 in credit x 10 years x $.75) in equity.
* 4% tax credits are allocated by the MassHousing (formerly Massachusetts Housing Finance Agency) in conjunction with MassHousing's tax-exempt bond financing. The Massachusetts Development Finance Agency (MDFA) also allocates 4% tax credits in conjunction with tax-exempt bonds.
Who is Eligible
Both for-profit and nonprofit developers can qualify for the credit. At least 20% of the units must be reserved for persons with incomes at/or below 50% of the area median income adjusted for family size; or at least 40% of the units must be made affordable for persons with incomes at/or below 60% of the area median income adjusted for family size. In addition, the project must be retained as low-income housing for at least 30 years.
LIHTC Eligible Activities and Affordability Requirements
Tax credits can be used to support the acquisition and/or rehabilitation of existing structures for rental use, including distressed or failed properties, or the new construction of rental projects. Projects seeking tax credits must have a minimum of 8 tax credit-assisted units. The minimum term of affordability is thirty years.
All units receiving tax credit assistance must have 20% or more households earning no more than 50% of area median income or 40% or more households earning no more than 60% of the area median income. In addition, ten percent of the total units must be reserved for persons or families earning less than 30% of area median income. (Please see the additional program information below for a list of maximum rents and household incomes for your community.)
LIHTC Funding Limits
The maximum tax credit award for a new assisted living project is $500,000. The maximum for any other project is $1,000,000. However, EOHLC may elect to award more than $1 million in credit (up to a maximum of $1.3 million in credit) to large scale neighborhood impact projects. Requests for allocations greater than $1 million will be considered on a case-by-base basis if the sponsor is able to demonstrate the potential impact of the project and if EOHLC has sufficient credit to make a larger allocation. EOHLC expects that a sponsor receiving an award greater than $1 million (up to $1.3 million) will request reduced amounts of subsidy financing from the Office. The maximum eligible basis per unit in tax credit developments is $250,000 per assisted unit for projects within the Boston metro area and $200,000 per assisted unit for projects outside the Boston metro area. EOHLC will cap the allowable eligible basis in the preservation set-aside at $175,000 per assisted unit.
LIHTC Selection Criteria
- Conformance with EOHLC Funding Priorities
- Strength of overall concept
- Strength of development team
- Demonstrated need for project in the target neighborhood
- Suitable site and design
- Appropriate scope of rehabilitation or construction
- Appropriate total development cost for properties included in proposal
- Financial viability of the project
- Degree of local support, including local funding commitments
- Evidence of readiness to proceed
- Evidence of satisfactory progress on projects previously funded with EOHLC resources
- Incorporation of sustainable development
LIHTC - How to Apply
EOHLC makes Low Income Housing Tax Credit funding available through a Notice of Funding Availability (NOFA), twice yearly. Applicants must complete and submit the One Stop Housing Application.
NOFA - Winter 2024 - Affordable Housing Competition for Rental Projects
Mini-Round 2023 NOFA (as amended)
2021 Mini Competition Notice of Funding Availability
NOFA - Rental Housing Rapid Production Initiative
NOFA - Winter 2021 - Affordable Housing Competition for Rental Projects
NOFA Winter 2020: Affordable Housing Competition for Rental Projects
DRAFT October 2019 Mini-Competition NOFA
NOFA Winter 2019: Affordable Housing Competition for Rental Projects
October Mini-Competition 2018: NOFA
LIHTC Guidelines
Massachusetts State Low Income Housing Tax Credit Program Regulations
HUD's Difficult to Develop Areas - (In addition to 'HUD's Difficult to Develop Area' list, EOHLC has also designated additional Difficult to Develop Areas in the QAP).
LIHTC News and Updates
LIHTC Carryover Forms
LIHTC - Regulatory Related Documents
Schedule of Sources and Application of Funds
Low Income Housing Tax Credit, Cost Certification Format
Prior Recorded Lienholder Consent
Certification of Project Placed in Service Date
Certification of Project Subsidies
LIHTC - Massachusetts State Tax Credit Documents
Contact
For additional information please call the Low Income Housing Tax Credit staff at (617) 573-1300.
Contact for Low Income Housing Tax Credit (LIHTC)
Online
Phone
Please listen for phone menu options for EOHLC divisions
Kevin Connor, press secretary
Mass211 is available 24/7 to answer general questions about EOHLC housing or home energy programs. Translation available.