Low-Income Housing Tax Credit

Created in 1986 with the Tax Reform Act (of 1986), this program of tax incentives is now the largest source of new affordable housing created by developers in the United States.

It's managed by the IRS, and dispersed to each State to allocate based on that state's need via a process called the QAP, or Qualified Allocation Plan process. The program offers guidelines on rent restrictions, and in some cases offers subsidies to the developer to help offset that reduced rent.

Developers are allowed to use tax credit on property they buy in roll-out-the-rug shape, properties they build from scratch, and those needing renovation. There is only one national source on this program: the Low-Income Housing Tax Credit database.