A tax credit that builds affordable homes
LIHTC (say it “lie-tech”) was created by Congress in 1986 to encourage the building of quality, affordable housing. Developers receive federal tax credits, which investors buy to help pay for construction.
In exchange, the homes must be rented at affordable prices to households that meet income guidelines, and they must stay that way for a set number of years.
Built with ownership in mind
Each state’s housing finance agency awards the tax credits and oversees the homes. Many nonprofits have used them to build single-family homes for rent, called lease-purchase homes, because the plan from day one was for renters to have a path to buy them. Ohio has been building them since 1987, and our communities now span more than one state.
Why there’s a 15-year wait
To keep the tax credits, a home must remain an affordable rental for a 15-year compliance period. Once that period ends, the home can be sold, and current tenants have the chance to buy the home they’ve been living in.
Key terms
LIHTC
Low-Income Housing Tax Credit, the federal program that funded your home.
Housing finance agency (HFA)
The state agency that runs the program and sets affordability standards, such as OHFA in Ohio or IHCDA in Indiana.
Compliance period
The 15 years a home must stay an affordable rental.
Lease purchase
A rental home with a path for the tenant to buy it later.
Area median income (AMI)
The middle income for your county, used to set income limits.
The life of a LIHTC home
Year 0
Home is built and rented
Tax credits fund construction. Income-qualified families move in at an affordable rent.
Years 1–15
Compliance period
The home stays an affordable rental. This is the time to build credit and get mortgage ready.
Year 16 and after
The home can be yours
The home can be sold to its tenant, or to another income-qualified buyer.
A proven path: Ohio’s example
8,600+
lease-purchase homes built across Ohio
About half
have finished their compliance period and are ready to sell
~60%
of homes sold so far went to the tenant already living there
Source: Ohio Housing Finance Agency, Lease Purchase Home Sales, 2021.
Who owns my home today?
Your home is owned by the nonprofit organization that developed it with housing tax credits. You’ll find each community’s owner on the Available homes page.
Where we fit in
Nonprofit owners bring in our team to manage the conversion from rentals to ownership. We help residents get ready to buy, from building credit and resolving debts to closing on the mortgage. Learn about partnering with us.