By Anand Kannan, Community Preservation Partners
Sept. 3, 2019
In the affordable housing space, low income housing tax credits (LIHTC) are the lifeblood for most developers. Construction managers may not realize it, but these federal financial vehicles fuel their workloads as well.
As a dollar-for-dollar federally guaranteed reimbursement on affordable housing investments – including the construction and purchase of the property – this system has supported 2.4 million homes and 95,000 construction jobs since its creation in 1986. It is generally celebrated by both sides of the political spectrum because it is a sustainable solution to the housing crisis and encourages private sector investments, generating a default rate of less than 0.1 percent.
Recently, LIHTC allocations to states have been expanded as part of the comprehensive overhaul to the federal tax code, but there is a catch: most credits are issued with an expiration date.
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