Affordable Housing Renovations

Precision Reconstruction Group is incredibly proud of the renovation and upgrade services we provide for multifamily properties using the Low-Income Housing Tax Credit Program. We know that reconstruction of any type can be stressful, which is why we specialize in LIHTC property renovations and are trained to guide you through this process.

Time and again our team of licensed, bonded, and insured professionals have provided high-quality results on all our LIHTC construction and renovation projects. With our training, expertise, and enthusiasm, we ensure all parties—the property owner, developer, and tenant—are satisfied.

Affordable Housing

What Exactly is the LIHTC Program?

The Low-Income Housing Tax Credit program was enacted as part of the Tax Reform Act of 1986. It was created to indirectly subsidize the acquisition, construction, and renovation of affordable rental housing. Since this program provides tax incentives, it encourages private developers and private investors to provide rents lower than the market rates in order to provide quality housing for low-income households. Ever since the creation of this program, 2 million affordable housing units have been constructed and renovated.

Who is Qualified for the LIHTC Program?

Single-family, multi-family units, duplexes and apartment buildings can all be qualified for the Low-Income Housing Tax Credit. However, there is an income test and rent tests that property owners or developers must meet before they can get the tax credit. According to the Tax Policy Center, they can meet the income test in the following ways:

  • At least 20 percent of project’s units have tenants who have an income of 50 percent or “less of area median income (AMI) adjusted for family size.”
  • At least 40 percent of units have tenants with an income of 60 percent or less of AMI or at least 40 percent of units have tenants with an income of NO MORE THAN 60 percent of AMI.
  • No units have tenants with an income of greater than 80 percent of AMI.

The rent test, according to the TPC, requires that the rent for each unit does not surpass 30 percent of 50 or 60 percent of AMI.

How Does the LIHTC Program Work?

It all starts with the federal government issuing a state government tax credit. From there, affordable housing developers are awarded tax credits by state housing agencies—this usually happens through a competitive process. In order to get financing, developers will usually sell credits to private investors. After that, a housing project must be made available to tenants. It is in this process where construction and renovation are required—here, the pros at the Precision Reconstruction Group can assist you! Call us today at 972-971-7442.