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Illinois Affordable Housing Tax Credit Program

The Illinois Affordable Housing Tax Credit (IAHTC) encourages private investment to qualified non-profit affordable housing development sponsors with tax credit equal to 50% of the donation on their Illinois tax liabilities.

The IAHTC is a critical source of financing affordable housing developments across Illinois.  The Illinois Housing Development Authority (IHDA) receives 75.5% of the IAHTC annually, while the City of Chicago Department of Community Development (DCD) receives 24.5%.  Each administrative entity has its own application process.

Lihtec Funding, as a service to non-profits that wish to participate in this program, offers an online application process at no charge

Once an applicant has received a reservation for IAHTCs, a donation must be procured within 12 months.  During this time, any financing needed for the development must also be procured.  The credit will be issued once the administering agency receives evidence of the donation and other project information, such as final cost, unit mix, and financing on Illinois Housing Development Authority prescribed forms.  Transfer of the credit is encouraged; however, all transferees must make a donation to the project sponsor upon transfer.

Eligible Donations: Eligible donations include money, securities, or real or personal property provided without consideration to a Sponsor for an Affordable Housing Project.  All donors must submit a donor affidavit stating that they understand they are making a donation that is eligible for the Illinois Affordable Housing Tax Credit program and if they will be keeping or transferring the tax credit certificate.

Eligible Costs: Costs associated with purchasing, rehabilitating, constructing, or providing financing for a development are eligible; technical assistance for the project, or general operating support of the Sponsor in connection with the project are also eligible costs, but will only be available until the set-aside for these costs is expended.

Income Levels Served:  For all but employer-assisted housing developments, 25% of the units in each development must serve persons with incomes of 60% of the area median income or less.  Rents or mortgage payments may not exceed 30% of the household income.