Housing Tax Credit (HTC) Program
The HTC program is a tax incentive program designed to increase the supply of quality, affordable rental housing by helping developers offset the costs of rental housing developments for individuals with low- to moderate-income. This program has been the largest driver of the production of new affordable housing in the state and nation over the past several years. Since 1987, OHFA has used the HTC Program to facilitate the development of over 89,000 affordable rental housing units in Ohio.
Who Can Apply
Organizations committed to developing low- to moderate-income homes for Ohioans can apply for an allocation of federal housing tax credits. Due to the demand for credits, OHFA typically funds only 25-30% of the applications submitted. In addition, because of the cost of applying for the program and the extensive compliance requirements, the program is best suited for rental housing developments with 20 or more units. OHFA strongly encourages all applicants to seek experienced legal and accounting counsel in order to comply with all program requirements.
How the Program Works
The amount of housing tax credits is based on the total development cost to be financed. Developers use the credits by selling them to investors to raise cash for acquisition, rehabilitation, and construction costs. The individual or corporation that purchases the housing tax credit will receive the credit for 10 years and can subtract the amount of the housing tax credit on a dollar-for-dollar basis from federal income tax liability. In exchange for the credits, the owner of the development must maintain income and rent restrictions for 15 years. Following the compliance period, the owner must enter into an extended use period of an additional 15 years by filing a Restrictive Covenant on the development with the County Recorder. The IRS regulates the HTC program, and additional details can be found in Section 42 of the Internal Revenue Code.
Recipients can use the housing tax credit to offset the cost of acquiring, substantially rehabilitating, and/or constructing residential rental housing to be occupied by low-income individuals and families. These units must be available to the general public and have initial leases of six months or longer. Some costs and types of developments are not eligible for housing tax credits. For complete details, please see Section 42 of the Internal Revenue Code.
The Allocation Process
Every year OHFA creates a Qualified Allocation Plan that describes the competitive application process and the procedures and policies for the distribution of the state's allocation of housing tax credits. For additional information, please see the 2014 Qualified Allocation Plan.
Applying for Credits
OHFA accepts applications at one time during the year—usually in the spring. Follow this link for the program calendar.
Questions concerning the Housing Tax Credit program should be directed to:
Ohio Housing Finance Agency
57 East Main Street
Columbus, Ohio 43215