Rental Housing Development Programs
ADFA currently monitors approximately 450 apartment complexes that contain over 20,000 affordable rental units across Arkansas.
About the Program
Created by the Tax Reform Act of 1986, the Low-Income Housing Tax Credit (LIHTC) program gave state and local LIHTC-allocating agencies authority to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. This program provides incentives for non-profit and profit motivated organizations and businessess to develop housing for low-income persons and families.
Arkansas receives an allocation of approximately $6.5 million in Low-Income Housing Tax Credit per year. This does not include tax credit developments utilizing tax-exempt bond financing.
- Tax Credits may be provided to owners of residential rental developments providing low-income housing units. The credits are taken annually for a term of ten years beginning with the tax year in which the development is placed in service or the following year.
- The maximum allowable annual credits are computed so that the annual credits equals approximately 9% of the total development costs, minus the land cost. Developments must be conventionally financed and reserved for low-income residents of newly constructed or substantially rehabilitated developments.
- Tax credits equal to approximately 4% of the total project cost, minus land cost, are available for new construction or substantial rehabilitation developments financed with tax-exempt bond financing and or other federal funds. Acquired developments must be rehabilitated in an amoun exceeding $15,000 per unit, and acquisition of an existing development must meet several requirements to be eligible for tax credits suchas not having changed ownership in the past ten years.
- All developments receiving tax credits must comply with income and rent limitations for a minimum of 30 years.
Compliance and Monitoring
ADFA is designated as Arkansas' Low Income Housing Tax Credit, (LIHTC) compliance monitoring agency. Crucial elements of compliance ensure that the appropriate number of tax credit units have been occupied by eligible households, following income eligibility guidelines and restricting rents over a specified time period. ADFA also monitors to ensure LIHTC properties are decent, safe, sanitary, and in good repair. ADFA is available to provide guidance to owners in maintaining continuous compliance with federal and state LIHTC guidelines throughout the compliance period.
In addition to monitoring the LIHTC Program there are also several housing programs funded by ADFA that require monitoring. ADFA has a Tenant Data Tracking Software Program to assist with the compliance and monitoring for each program. The software and the tenant data that is uploaded is critical for property owners to maintain compliance as well as assisting ADFA in reporting LIHTC tenant data to HUD annually.
Click LINK to access the Tenant Data Reporting Software. For more information about the Tenant Data Reporting Software please contact Jeanne Johnson, Compliance Department at 501-682-5936.
If you should have any questions regarding Housing Compliance and Monitoring please contact Tammy White, Compliance Manager, at 501-682-5928.