Resources
About Low-Income Housing Tax Credit (LIHTC)
The LIHTC Program is our country’s primary tool for creating and preserving affordable rental housing.
- Since 1986, it has financed nearly 3.5 million affordable homes across urban, suburban, and rural communities nationwide.
- In California alone, the program has supported nearly 400,000 affordable homes.
- These apartments provide stable, affordable housing to over eight million low-income households, including veterans, seniors, families, individuals experiencing homelessness, people with disabilities, and low-wage workers—helping communities thrive across the country.
LIHTC encourages private investors to provide equity for the construction and rehabilitation of housing for low-income residents in exchange for federal tax credits—a dollar-for-dollar reduction in tax liability.
- Sponsors of proposed developments apply to state housing agencies for allocations of these credits, with priority given to projects serving the lowest-income tenants and ensuring long-term affordability.
- Once allocated, developers raise equity from private investors through syndicators. This equity subsidizes affordable housing, allowing units to be rented below market rates, while investors receive tax credits distributed annually over ten years.
- Projects financed through LIHTC must meet low-income eligibility requirements for at least 15 years and certify annually that units are rented to qualified tenants, ensuring lasting affordability and impact.
About Syndicators
Syndicators Connect Developers with Investors
- A syndicator connects developers looking to build or rehabilitate affordable housing projects with investors, whether private or corporate, who receive tax credits in return for investing in projects in communities that have the highest need. The syndicator can then oversee the fund’s acquisition and the ongoing management of the project.
- Since syndicators have extensive experience with LIHTCs and can acquire and manage a LIHTC investment that would be beyond the internal capacity of investors. Furthermore, since they understand the affordable housing needs of local and regional markets, they understand the amount of project equity an investor should seek for the tax credits.
- Moreover, a syndicator’s knowledge of local and regional markets can help investors receive positive consideration under the Community Reinvestment Act (CRA), which encourages investment in local communities.
Nonprofit Syndicators Make the Most Challenging Project Possible and Build Industry Capacity
- Nonprofit syndicators like Merritt balance mission impact and investor returns. We are dedicated to working with mission-aligned developers and funders to make the most challenging affordable housing projects possible.
- As the only nonprofit LIHTC syndicator focused solely on servicing California, we are deeply connected to our communities and attuned to the nuances of affordable housing and tax credit system in California. Based on this knowledge, we offer terms that meet project needs today and foster preservation of affordability for tomorrow. Beyond investing in properties, Merritt dedicates ourselves to investing in the people and policies that shape the affordable housing industry across the state.
