Attorneys at Law

Be Informed.

Be informed.

Can You Qualify for Low Income Housing Tax Credits?

If you are going to develop a property, you should talk with a land use development attorney. Your attorney can help you with all aspects of doing your due diligence before purchasing a plot of land to make sure that you can use the land for your intended purpose. Your attorney can also assist you in understanding zoning rules, building codes, financing issues, development contracts, and other legal technicalities associated with developing property.

One other important area where an attorney can help you involves exploring different ways for you to save money on your development costs through tax credits. In particular, you may be interested in determining whether or not you can qualify for low income housing tax credits. These can provide a substantial savings for developers and investors who are constructing or improving qualifying properties.

Curley & Rothman, LLC has helped many investors and developers to complete successful residential and commercial projects. We understand Pennsylvania laws related to land use and development and we can provide you with informed advice so you can make smart choices from the beginning to the end of the project. Contact us today to speak with a  Conshohocken land use development attorney who can help you.

Qualifying for Low Income Housing Tax Credits

The Department of Housing and Urban Development (HUD) states: "The Low-Income Housing Tax Credit (LIHTC) is the most important resource for creating affordable housing in the United States today." This program benefits not just to people looking for low income housing, but also developers. If you qualify for these credits, it can also be an important source of financial savings that makes a development significantly more affordable for you to construct.

The program is a federal tax program, which was first created in 1986 by the Tax Reform Act. While the tax credits are provided by the federal government, individual states determine which developers can qualify.  The Pennsylvania Housing Financing Agency sets forth some of the guidelines for qualifying for credits including:

  • Having a location within the commonwealth.
  • Making units generally available and ensuring they are occupied in accordance with fair housing laws, accessibility laws, and other state, federal, and local laws.
  • Meeting all health code requirements and state, federal, and local building codes.
  • Meeting all requirements of the Internal Revenue Code.
  • Complying with all federal laws related to rental housing
  • Providing permanent, safe, sanitary structures for year-round residential use.
  • Being located in a geographic area which doesn't already have an over concentration of affordable housing or competing developments.
  • Providing new low income housing units, substantially improving the quality of existing units, or preserving existing units.
  • Addressing a demonstrated need for low income housing
  • Being ready to proceed to closing quickly.

The development must also either allocate 40 percent of residential rental units to people with incomes equal to 60 percent or less of the area gross median income, or must allocate at least 20 percent of residential rental units to people whose incomes are 50 percent or less of the area gross median income. The units allocated to people with income below the area gross median income have to be rent controlled and the units also have to actually be occupied by people who qualify based on having low incomes.

Both investors and developers can qualify for low income housing tax credits provided they are either constructing new low income housing or substantially improving or preserving existing low income housing. The tax credit is a dollar-for-dollar tax credit program which reduces federal income tax obligations for investors or developers with properties that meet LIHTC qualifications.

When you believe you could qualify for this tax credit or if you are looking for an affordable way to develop a property, it is worth spending the time and making the effort to speak with a legal professional who can advise you on how to meet LIHTC tax credits and how to apply for this substantial tax savings.

How a Conshohocken Land Use Development Attorney Can Help

Curley & Rothman, LLC is dedicated to helping investors, developers, builders, and contractors with their construction and development projects throughout the Pennsylvania area.  We assist with all aspects of your project, from reviewing contracts to addressing financing issues to understanding zoning laws and dealing with all technical requirements for the construction of properties.

If you need a Conshohocken land use development attorney who knows the law and who is committed to helping make your project a success, give us a call at 610-834-8819 or contact us today to schedule your consultation and learn more about how we can help you during the pre-purchase, planing, and construction phase.

Real EstateScott Rothman