Low-Income Housing Tax Credit (LIHTC) Program
Forecasted
Low-Income Housing Tax Credit (LIHTC) Program supports private and nonprofit developers with tax credits for rental housing construction, acquisition, and rehabilitation to provide affordable rents in Hawaii.
Funder: Hawaii Housing Finance and Development Corporation
Due Dates (Anticipated): February 2027 (Consolidated Application) | May 2027 (Permit submission)
Funding Amounts: Federal 9% or 4% tax credits, generally claimed over 10 years; state credit equals 50% of federal LIHTC
Summary: Tax credits support construction and acquisition/rehabilitation of income- and rent-restricted rental housing in Hawaii.
Key Information: Projects must commit to at least 45 years of affordability and waive the qualified-contract option.
Description
Hawaii’s Low-Income Housing Tax Credit program provides private developers and nonprofit entities with tax credits to finance affordable rental housing. Credits generate project equity or reduce income tax liability dollar for dollar, lowering construction and financing costs so developments can offer below-market rents. The IRS administers the federal program under Internal Revenue Code Section 42; the Hawaii Housing Finance and Development Corporation (HHFDC) administers federal and state allocations in Hawaii.
HHFDC’s Qualified Allocation Plan (QAP) establishes project thresholds, selection criteria, and compliance requirements. Competitive allocations seek projects that meet the state’s housing needs, with consideration of resource efficiency, readiness, development costs, tenant services, location, development-team performance, and deeper or longer affordability commitments. Tax-exempt-bond projects undergo feasibility review but are not scored under the LIHTC criteria point system.
