Federal and state Housing Tax Credit programs

The allocation of federal and state credits is highly competitive and continues to be oversubscribed in each allocation round.

Federal allocated credits

Federal Low Income Housing Tax Credits (LIHTC) brings substantial equity investment into Vermont's housing market.

In FY2010, VHFA allocated approximately $900,000 in Housing Credits to two projects, generating $7.2 million in tax credit equity.

Federal Bond Credits

VHFA also administers Federal Bond Credits, which are similar to the Allocated Credits noted above, but which provide a lower level of credits and therefore lower equity investment to the project.

Bond Credits are automatically provided to eligible projects in conjunction with Private Activity Tax Exempt Bond Financing.

State credits

VHFA allocated $115,000 State Affordable Housing Credits in FY2010, generating an estimated $506,000 in equity for nine homeownership units in four projects.

Allocation responsibilities

VHFA's responsibilities for administering the Tax Credit program include:

  • Ongoing review of tax credit rules and regulations for incorporation and maintenance of the State Qualified Allocation Plan
  • Coordination, Receipt, Review and Underwriting of Tax Credit Applications for presentation to the Tax Credit Allocation Committee and the VHFA Board of Commissioners
  • Administration of the initial reservation, and ongoing compliance monitoring of projects with IRS requirements

As with debt financed projects, those financed with Tax Credit Equity require an extensive level of underwriting analysis.