Low Income Housing Tax Credits

The Low Income Housing Tax Credit Program (LIHTC) has proven to be one of the most successful tools in Indiana and across the country for funding the development of affordable rental housing. Tax credits are awarded to developers who sell them to investors, providing a very large portion of the capital investment in each development. With this investment, the property is able to charge below market rate rents to serve those who earn less than 60% of the area median income. These projects remain affordable for a minimum of 30 years, at which point they may convert to market rate, or they may reapply for more LIHTC funding to rehabilitate/remodel.

Indiana LIHTC Portfolio

*Figures as of 2/2026

2025 LIHTC Allocation

Indiana's tax credit program includes three types of credits. All LIHTC programs adhere to the same rules and regulations. The difference between the programs is whether it involves a competitive application process where applicants are scored against other projects or if they are scored non-competitively.

• 9% credits - allocated by IRS on a per capita basis. Awarded based on a competitive application process.
• 4% credits - allocated by IRS; made available when tax-exempt bond financing is used. When combined with the below AWHTC, they are awarded on a competitive application processes. When used stand-alone, they are awarded non-competitively, given the project meets all requirements.
• Affordable and Workforce Housing Tax Credits (AWHTC) - state tax credits created by the Indiana General Assembly. Awarded based on a competitive application process in combination with 4% credits and bonds.

Federal LIHTC

Set-asides help guarantee a spread across geographies and populations served, as well as participation by nonprofit developers. In 2025, IHCDA awarded 9% tax credit set-asides which included rural, small city, qualified nonprofit, permanent supportive housing, community integration, and preservation. This year's general set-aside increased support for preservation of existing affordable housing.

The Internal Revenue Service (IRS) federal credits are claimed each year for ten years. Funding totals above represent the full amount of tax credits that will be taken over the life of the credits.

State AWHTC

IHCDA awarded the forth allotment of AWHTC, which provided $30 million in aggregate tax credits that were equally allocated to five regions across the state. Paired with 4% credits and tax-exempt bonds, these credits help create equity for developers to cover funding gaps and to increase building capacity, especially in areas with strong employment opportunities. The state tax credits are claimed each year for five years.

For in depth information about all AWHTC projects, visit here.

Compliance Monitoring

LIHTC properties are required to submit annual certifications to IHCDA, which then verifies the property is staying in compliance with the program requirements. In addition to annual certifications, full audits and onsite physical inspections are performed at least every three years for each property. This ensures that properties are serving eligible low-income Hoosiers and that the units remain in safe, habitable conditions.

Additional Resources

• Qualified Action Plan (QAP) - outlines the requirements for LIHTC. Generally updated every two years, the QAP aims to balance housing needs and development considerations. Public comments are welcomed at any point.
• All LIHTC Properties - an Excel list of all LIHTC properties.
• AWHTC Map - an interactive map of all AWHTC properties.
• Prospective Tenant information - all LIHTC properties available for rent.
• Developer information