Low Income Housing Tax Credit (LIHTC)

The Low Income Housing Tax Credit (LIHTC) Program funds the construction of new housing developments. For 30 years after construction, LIHTC housing developments must keep a percentage of units affordable. The LIHTC program is administered at the federal level by the Internal Revenue Service (IRS) and at the state level by the Pennsylvania Housing Finance Agency (PHFA).

Income and Rent Limits

• Income Limits. Affordable units in LIHTC developments are assigned a percentage of Area Median Income (AMI) in Philadelphia—usually 20%, 30%, 40%, 50% or 60%—which represents the maximum income the tenant household can have at lease signing to rent the unit. For example, a LIHTC development in Philadelphia with a 2-bedroom unit assigned at 50% AMI can be leased by a tenant with annual household income less than $47,450 in 2022.
• Rent Limits. Unless there is an additional project-based or tenant-based subsidy, maximum tenant rents in LIHTC developments are based on the Area Median Income (AMI) in Philadelphia, not the tenant’s household income. For the example above, the cost of rent and utilities for the 2-bedroom unit assigned at 50% AMI cannot exceed $1186 in 2022. LIHTC developments may increase rents annually as the median income in Philadelphia rises, even if the tenant’s household income stays the same.
• Additional Subsidies. If a tenant lives in a LIHTC development and their rent is based on their household income, then they may have a project-based or tenant-based subsidy in addition to the LIHTC program rent limits. To find out which subsidy may apply to your development or unit, look up your rental property or subsidy program.
• For current rent and income limits in Philadelphia, see PHFA Rent & Income Limits.

Recertifications

• Regular Recertification. LIHTC tenants recertify their household information and income every year. They can submit information and documents by mail or in person at the management office.
• Interim Recertification. LIHTC tenants are not required to report changes to their household or income between recertifications. However, if the tenant receives an additional project-based or tenant-based subsidy, they may be required to report household or income changes.
• For more information about recertifications in LIHTC housing, review the Low Income Housing Tax Credit Renters Guide or PHFA Low Income Housing Tax Credit Manual.

Transfer/Moves

• Requesting transfer. Tenants who want to move from their LIHTC unit or development may submit a request to their property manager. However, tenants can only be transferred to another unit within the same development or another development managed by the same owner. In addition, tenants may only transfer to a unit for which they are income-eligible based on the income and rent limits described above.

Repairs

• Requesting repairs. LIHTC tenants may request repairs by phone or by mailing a letter to the management office or owner.
• Complaint Line. Tenants may submit complaints regarding repairs or other administrative issues by visiting Multifamily Asset Managers or calling (877) 253-7709.
• For more information about a tenant’s legal rights to address repair issues, go to Repairs.

Eviction

• Good Cause Protection. LIHTC owners must renew LIHTC leases at the end of a lease term and can only terminate a lease for non-payment of rent or breach of a condition of the lease.
• For additional information about the eviction process, go to Evictions.

Rules and Regulations

• The PHFA Low Income Housing Tax Credit Manual outlines specific rules for LIHTC property management.
• 26 CFR part 1, section 42 establishes rules and regulations for the LIHTC program.

Updated: February 17, 2023 2:41 PM