Low Income Housing Tax Credit

The LIHTC was created as a part of the Tax Reform Act of 1986, is found in Internal Revenue Code § 42, and was designed to incentivize developers and investors to create and operate affordable housing. Under the program a developer receives federal income tax credits over a 10-year period in exchange for acquiring, rehabilitating, or newly constructing rental housing for low-income households, and then operating the project under LIHTC guidelines for a certain compliance period.

Developers sell LIHTCs to investors who want to reduce their federal taxes. The investor’s payment for the credits is used as equity and reduces the developer’s need to use other financing. This then reduces the developer’s debt-service costs, allowing the development offer rents below-market rates.

According to the U.S. Department of Housing and Urban Development (HUD), as of 2018 the LIHTC program was authorizing the use of $8 billion in tax credits annually, and has resulted in the creation of approximately 3.05 million affordable housing units.

The LIHTC can be used for: new construction, acquisition and rehabilitation, and rehabilitation of a property already owned by a developer.

Although the credit was authorized by federal law, and reduces federal tax liability, the federal government has put the administration of the program in the hands of the states. Each state has created a housing finance authority (HFA) that allocates credits to developers, administers the state’s criteria and bidding process for projects, and monitors developer compliance with program regulations.

The State’s LIHTC authority is awarded to developers through a competitive process.  This process is detailed in the Qualified Allocation Plan (QAP) through the Greater Opportunities for Affordable Living (GOAL) Program.  The GOAL program is run annually, beginning in late Spring with awards generally announced in December.  See the GOAL Program page for more information. 

Who May Apply

  • For-profit organizations
  • Nonprofit organizations
  • Regional Housing Authorities

Tax Credit Allocations and Developments

Reference Materials

  • See the GOAL Download Page for reference materials, including forms, rent and income limits, and historical data.

Contact Information

Andy Petroni
Planner
Planning and Program Development Department
Alaska Housing Finance Corporation
P.O. Box 101020
Anchorage, AK 99510-1020
907-330-8275
907-338-2585 (fax)