Low-Income Housing Tax Credit Program

Program Information
  • The Low Income Housing Tax Credit Program (LIHTC) is a program of the Internal Revenue Service (IRS) providing tax credits that may be sold to private investors to generate direct equity.
  • The proceeds from the sales of the tax credits then finance a portion of the housing development costs.
  • In Arizona, the program is administered by the Arizona Department of Housing.

Accessing Tax Credits
Tax credits may be accessed in one of the two following ways: 
  1. The State of Arizona holds an annual competition to distribute its annual allocation of 9% tax credits. This application round is generally held in the spring with award reservations made in the summer.
  2. Four percent tax credits are available on a noncompetitive basis to qualified projects that have received a private activity bond allocation from the state. A separate tax credit application is required at the time of the submittal of a bond application and whether or not tax credits may be provided to the project is determined through an underwriting review.