What is the low-income housing tax credit?

HOUSING low-income tax credit
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What is the low-income housing tax credit?

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Congress enacted Section 42 of the Internal Revenue Code as part of the Tax Reform Act of 1986. The program was created to encourage production of affordable multi-family rental housing for low- to moderate-income persons. Without the Credit, cash flow from rent is often inadequate to support housing development. The Credit is a dollar-for-dollar reduction of federal income taxes owed by owners/investors in qualified projects for tenants whose incomes are at or below 60% of the Area Median Income (AMI).