You asked for information about the Connecticut Housing Finance Authority's (CHFA) low-income housing tax credit (LIHTC) program, including (1) the types of projects the program prioritizes, (2) the available credits for 2008, and (3) the distribution of credits in the past five years.

The LIHTC program is a federal program administered by the CHFA. The program seeks to offer affordable rental housing to people of limited income by providing tax credits to eligible developers. Developers submit their applications for LIHTCs to CHFA, which rates and ranks them according to criteria in the LIHTC Qualified Allocation Plan (QAP). LIHTCs are financing tools available to developers. Eligible developers must set aside a minimum amount of units for low-income residents for an extended period, usually thirty years. If approved, the tax credits are allocated on an annual basis for ten years.

Developers use the LIHTCs as financing tools to secure investors. Developers sell the credits to private investors who benefit from a reduction in tax liability. The proceeds from the sales generate equity for the development, thus reducing the need for debt financing and enabling developers to charge affordable rents. Tax credits are often needed to finance multifamily proposals because the rental income generated by an affordable housing complex would be insufficient to cover the costs of developing and maintaining the property.

Under the LIHTC program, projects that serve the greatest number of low-income tenants in designated areas (urban or other targeted zones) are given priority. The draft 2008 QAP, under public review until January 31, 2008, proposes changes to the criteria used to rank projects. According to Sheila Stone, tax credit officer at CHFA, the proposals seek to prioritize state and CHFA-owned real estate properties, responsible growth projects, and projects that incorporate supportive housing. Further, the previous preference given to proposals that seek to revitalize severely distressed federal or state housing developments (Hope VI developments) would be eliminated under the proposals.

Preliminary financing proposals for the 2008 LIHTC allocations are due January 25. CHFA is also conducting LIHTC program training sessions in February 2008 for developers and others to learn about program priorities and the application process. For more information, interested developers should contact the CHFA at (860) 721-9501.

In the past five years, the CHFA has allocated approximately $37 million in LIHTCs. Stone estimates that there will be approximately 6.9 million LIHTCs available for allocation in 2008. The following tables show the projects that received LIHTCs in the past five years. Detailed information about projects allocated LIHTCs is available at http://www.chfa.org/TaxCredits/allocation_applicant_listing.htm.

2007

2006

2005

2004

2003

* Indicates a split allocation between 2003/2004.

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