How to qualify for a tax credit (LIHTC) apartment
Tax credit apartments are privately owned buildings that agreed to rent some or all of their units at capped rents to households under an income limit, in exchange for federal tax credits. You apply to the property, not to a government office, and you qualify on income.
1. Check the income limit
Each restricted unit is set at a share of the area’s median income, most often 60%, sometimes 50%, and in some buildings anywhere from 20% to 80%. HUD publishes the limits by area and household size every year; find yours on the income limits pages. Your household’s gross annual income, everyone who will live in the unit, has to be at or under the limit for that unit when you move in.
2. Understand the rent
The rent is capped by the unit’s size, not your income. Gross rent, including a utility allowance if you pay utilities, can’t exceed 30% of the income limit for the household size the unit is designed for: one person for a studio and 1.5 people per bedroom (IRC 42(g)(2)). Two households with different incomes pay the same rent for the same unit type. If your income is far below the limit, the rent can still be a stretch, which is where a voucher helps.
3. The student rule
A household made up entirely of full-time students generally can’t qualify. The exceptions in IRC 42(i)(3)(D) include a student receiving assistance under title IV of the Social Security Act, a student who was in foster care, a student in certain job training programs, single parents with their children (when neither is someone else’s tax dependent), and married students filing a joint return.
4. Vouchers can’t be refused
Owners agree not to refuse an applicant because they hold a Housing Choice voucher (IRC 42(h)(6)(B)(iv)). If you have one, say so.
5. Apply
Find properties near you on the tax credit apartments pages, then call each property’s management office. Expect to show proof of income for everyone in the household, assets, and identification, and to sign a certification of your income. Many properties keep waiting lists; ask how long the list is and whether units at your income level turn over.
Tax credit properties must follow the Fair Housing Act. To report discrimination, call HUD at 1-800-669-9777.
Questions people ask
Is a tax credit apartment the same as Section 8?
No. Section 8 vouchers pay part of your rent based on your income. A tax credit apartment has a fixed, capped rent for the unit, and you qualify by having income under the limit. You can use a voucher at a tax credit property, and the owner can't refuse you for having one.
Can my income go up after I move in?
Yes. Income is tested when you move in and recertified each year, unless the building is entirely low-income and exempt (IRC 42(g)(8)(B)). If it rises above the limit later, you can generally stay; past 140% of the limit, the next available unit rule in IRC 42(g)(2)(D) governs how the next vacant unit is rented.