LIHTC tools

LIHTC income averaging calculator

Under income averaging, each low-income unit gets a designation from 20% to 80% of area median in 10-point steps, and the average of the designations must be 60% or less, with at least 40% of the units designated. Enter units by designation to see the live average, what breaks it, and the FY2026 rents each designation allows in your county.

Units by designation

20% AMI units

30% AMI units

40% AMI units

50% AMI units

60% AMI units

70% AMI units

80% AMI units

All residential units Including market-rate units, for the 40% test.

Rents

State

County

Unit size for rents

Utility allowance ($/month) Example: $150.

Average designation

58.50%

Passes the 60% average. Room for 15 one-step increases before it breaks.

Check 80% rents against market rents: where the 80% cap is above market, the unit earns only what the market pays.

Rents by designation in Travis County (2 bedrooms)

Designation	Units	Gross rent cap	Tenant rent	Monthly
30% AMI	15	$907	$757	$11,355
50% AMI	20	$1,512	$1,362	$27,240
60% AMI	35	$1,815	$1,665	$58,275
70% AMI	10	$2,117	$1,967	$19,670
80% AMI	20	$2,420	$2,270	$45,400
Total	100			$161,940

Annual restricted rent potential $1,943,280. FY2026 limits for Travis County.

Get a financing quoteSends the mix and average with your request.

As of October 30, 2026 (HUD FY2026 limits). Sources: IRC 42(g)(1)(C) (Cornell LII); T.D. 10036 (Federal Register, Sept. 30, 2025); HUD FY2026 MTSP limits; Rev. Rul. 2020-4. An estimate, not tax or legal advice.

The formula

Average = sum(designation x units) / low-income units must be <= 60% Share = low-income units / residential units must be >= 40% (25% NYC) Room = 60 x units - sum(designation x units) in 10-point steps

Worked example (the defaults)

100 units: 15 at 30%, 20 at 50%, 35 at 60%, 10 at 70% and 20 at 80%. The designations add to 5,850 points, an average of 58.5%, which leaves 150 points, or 15 one-step increases, of room. In Travis County, Texas, the two-bedroom gross rent caps run from $1,815 at 60% to $2,420 at 80%.

Why the limits line up

HUD publishes each designation's income limit as a multiple of the 50% (very low income) limit: 20% is 0.4 times it, 70% is 1.4 times and 80% is 1.6 times (Rev. Rul. 2020-4). Rents scale the same way, so an 80% unit earns about twice a 40% unit.

Questions people ask

What is LIHTC income averaging?

A third minimum set-aside, added in 2018 (IRC 42(g)(1)(C)). At least 40% of the residential units must be rent-restricted and occupied by households under the income limit the owner designates for each unit, in 10-point steps from 20% to 80% of area median, and the average of the designations can't exceed 60%. The election is irrevocable.

How is the average computed?

Add up each low-income unit's designation and divide by the number of those units. Treasury's final regulations, T.D. 9967 (2022) and T.D. 10036 (2025), govern how units are identified, how designations are recorded and reported, and what an owner can do to correct a failure.

Can I designate 80% units?

Yes, as long as enough deeper units bring the average to 60% or below. An 80% unit's rent cap is 1.6 times the 50% cap, which in some markets is above what the market pays.

What is the 40% minimum?

The share of residential units that must be designated low-income under the average income test: 40%, or 25% in New York City (IRC 142(d)(6)). Most LIHTC deals designate every unit, since credits follow the applicable fraction.

Where do the rents come from?

HUD's FY2026 MTSP limits for the county you pick, at each designation, using the IRS Pub. 5913 method (30% of the limit for 1.5 people per bedroom, over 12). The utility allowance you enter is subtracted to get tenant rent.