IN.gov - Skip Navigation

Note: This message is displayed if (1) your browser is not standards-compliant or (2) you have you disabled CSS. Read our Policies for more information.

Amber Alert
Amber Alert - TEST
Subscribe for e-mail updates

IHCDA > Qualified Allocation Plan > Rental Housing Tax Credits Rental Housing Tax Credits

The Rental Housing Tax Credit (RHTC) is a tax incentive program established under Section 42 of the Internal Revenue Code to provide an incentive to developers to provide affordable rental housing. These federal income tax credits offset the building acquisition, new construction, and/or substantial rehabilitation costs for rental housing developments.

Rental Housing Tax Credits (RHTCs) are allocated to for-profit and not-for-profit developers of affordable rental housing. By reducing a developer's federal tax liability, or selling of tax credits to investors, tax credits can contribute significantly to the financial viability of developing affordable rental units. In exchange for the financing provided through the tax credit, developers agree to keep rents affordable for a period between 15 and 30 years. Units financed with RHTCs must be rented to persons at or below 60% of the area median income. RHTC rental properties are privately owned and managed. IHCDA monitors the properties during the compliance period to ensure that rents and resident’s income do not exceed the program limits and that the properties are well maintained.

Each state has a limit on the amount of tax credits that it can allocate and demand runs about two to three times higher than available resources. Program guidelines and selection criteria by which IHCDA allocates the RHTC can be found in the Qualified Allocation Plan (QAP).

Interested? Please click HERE to review the QAP documents and learn about the process of applying for Rental Housing Tax Credits in Indiana.

Please contact IHCDA Tax Credit Allocation Staff to learn more.

Home

The Home Investment Partnership Program (HOME) is a HUD based grant program that helps fund both non-profits and local governments with a number of housing programs. The HOME grants are extremely diverse and the monies can go to support assistance with down payments, owner-occupied rehabilitation and even rental properties for both transitional and permanent housing. There are stricter limits to the matching of the grant and the non-profit applying to this funding must be CHDO registered.

Interested in learning more about the HOME program? Please contact the Community Development Representative in your area to learn about the appropriate funds available to CHDOs, local governments and the technical aspects of submitting the application. A site visit will be completed to asses the ability to meet the requirements. Please review the document below to locate your representative and their contact information.

The HOME program can also be used as a source of financing in conjunction with tax credits. If you are a developer looking for information regarding these programs, please visit our QAP and read through SCHEDULE E which thoroughly explains the procedure of accessing HOME funds in conjunction with rental housing tax credits (RHTC).

Please contact IHCDA Tax Credit Allocation Staff to learn more.

Multi Family Tax Exempt Bonds

Tax-exempt bond financing provides long term financing for the acquisition, construction and/or substantial rehabilitation of affordable rental housing. These bonds are attractive to developers as the interest paid to investors is exempt from federal income taxes (though it may be a preference item in the Alternative Minimum Tax calculation), which gives the developer a lower interest rate than conventional debt, reducing the developments debt service cost. Bond financed properties are eligible for a 4% federal tax credit.

Developers seeking tax –exempt bond financing must first identify a local entity, such as your city or county, to issue the bonds. IHCDA reviews the applications for bond financing to ensure the properties meet program guidelines. Program guidelines and selection criteria by which IHCDA allocates bonds can be found in the Qualified Allocation Plan (QAP).

Interested? Please click HERE to review the QAP documents and learn about the process of applying for Multifamily Tax Exempt Bonds in Indiana and/or contact your local unit of government (city or county) to get more information as to their requirements for bond issuance.

Please contact IHCDA Tax Credit Allocation Staff to learn more.