Affordable Housing Tax Credit
Affordable Housing Tax Credit supports developers and nonprofit housing sponsors through private investment and donations to build and rehabilitate affordable rental and ownership housing in Illinois.
Funder: Illinois Housing Development Authority
Due Dates: September 16, 2026 (2027 9% LIHTC PPA) | February 23, 2027 (2027 9% LIHTC application) | Rolling through 2026 (4% LIHTC) | Year-round (IAHTC)
Funding Amounts: LIHTC: generally 9% or 4% of eligible basis annually, allocated over 10 years | IAHTC: one-time credit of 50% of qualified donations
Summary: Federal and state tax credits support private investment in building and rehabilitating affordable housing in Illinois.
Key Information: Projects must receive Preliminary Project Assessment approval before applying for either tax credit.
Description
The Illinois Housing Development Authority (IHDA) administers two tax-credit programs that encourage developers to build and rehabilitate affordable rental housing: the federal Low-Income Housing Tax Credit (LIHTC) and the state Illinois Affordable Housing Tax Credit (IAHTC). Tax credits directly reduce tax owed, rather than reducing taxable income. LIHTC supports affordable housing development through private equity investment, with applications evaluated under IHDA’s Qualified Allocation Plan (QAP).
IAHTC encourages private donations to qualified nonprofit affordable housing sponsors. Donors receive a state income tax credit and may transfer credits to the project to generate financing through syndication. IAHTC also covers ownership and employer-assisted housing developments. IHDA administers the statewide program, while Chicago’s Department of Housing and Economic Development administers the program within Chicago through its own application process.
