State Affordable Housing Tax Credit
These are some of the oldest state tax credits around.
This credit approach has encouraged private developers to build projects to replace the 50s and 60s “HUD-style” federal housing projects which have become eyesores in many communities over the years.
Typically, state affordable housing tax credits mirror the federal tax credit. The credits are spread over a 10-year time frame.
Eligibility for the credit is predicated on renting anywhere from 40% to 100% of units to families with income below certain thresholds for their community. These rent-restricted units tend to provide attractive and affordable housing alternatives for the elderly.
The presence of state credits adds capital to the budgets for these projects, allowing for higher-quality projects and better amenities. For example, a bigger budget might allow for medical clinics or learning centers.