Low-income Housing Tax Credit Program

The Low-Income Housing Tax Credit (LIHTC) Program is a financing tool for private developers and non-profit entities to construct or rehabilitate affordable rental units. Federal and state tax credits are awarded by the HHFDC, and may be used to obtain a dollar for dollar reduction in income tax liability for 10 years for federal tax credits and 5 years for state tax credits awarded after December 13, 2016, or may be syndicated to generate project equity.

The federal LIHTC is a program administered by the Internal Revenue Service. The HHFDC is responsible for the administration of the LIHTC program for the state of Hawaii. A state LIHTC equal to 50% of the federal LIHTC is also available to qualified applicants.

We strongly encourage you to consult with your tax counsel and/or certified public accountant regarding this program prior to submitting an application.

Program Requirements

To qualify for a tax credit, owners must meet these general guidelines in addition to other program requirements (see Section 42 of the Internal Revenue Code for specific eligibility):

Income restriction:

The tax credit is available only for units rented to low-income occupants. This means that a project must have:

  • at least 20% of its units rented to households with incomes of 50% or less of area median income;
  • at least 40% of the units must be rented to households with incomes of 60% or less of area median income.

Rent restriction:

Low-income rents are restricted based on the number of bedrooms in the unit and the area median income as established annually by HUD. If the tenant pays for utilities, the rent must be adjusted by the applicable utility allowance.

Please refer to the State of Hawaii’s current Qualified Allocation Plan for program requirements.

How do I apply for tax credits?

Submit a completed Consolidated Application to the Corporation. Please review the “Instructions” and “Schedule of Important Dates” included in the Consolidated Application.

Other Information