What is the low-income housing tax credit?
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).
