Blogs| New Hampshire Low-Income Housing Tax Credit (LIHTC) Program
Written by
Nygel Varghese
Published
Nov 13, 2024
Topics
State LIHTC
New Hampshire has a problem. With not enough homes, affordable houses are also becoming rare. Over 35,000 people in the state live in homes where the rent is helped by the government. This number is likely to grow.
By 2030, the state will need 60,000 more low-cost homes. This is a chance for builders and investors interested in LIHTC projects in New Hampshire.
This article explains the New Hampshire LIHTC program. It covers its structure, who qualifies, rules to follow, how to apply and other details.
Affordable housing in New Hampshire is scarce. Rents go up, but cheap homes stay limited. Many families spend a lot of their income on rent. More than 30% of it.
The New Hampshire LIHTC Program is under the New Hampshire Housing Finance Authority (NHHFA). It uses a federal tax credit. This credit lets private builders construct or repair homes for people with low incomes.
NHHFA targets very low-income families. Elderly residents also receive help, as do people with disabilities. Good schools and job opportunities are part of their building plans too.
The LIHTC program in New Hampshire gives out two types of tax credits:
Projects using LIHTC funds must have rent limits and keep rents low for 30 years.
The New Hampshire LIHTC Program brings big economic and social benefits. LIHTC-funded homes also improve quality of life by reducing over-crowding in living spaces and offering stable housing. They create healthy environments.
The New Hampshire LIHTC program gives out both the 9% and the 4% tax credit.
The 9% credits are given out through a competitive bidding process and cover about 70% of the development project’s costs. It is allocated to projects meeting specific requirements of the state set out in the Qualified Allocation Plan (QAP). It’s usually used in new construction projects.
The 4% tax credits are given out on a rolling basis and cover about 30% of the costs of renovating an affordable housing building. To cover the financing, developers pair the 4% LIHTC with other financing sources.
New Hampshire’s QAP serves as the primary guiding document for LIHTC allocation in the state.
It details criteria for project scoring, such as project location, financial feasibility, and development quality.
Projects that address specific state priorities, like those serving individuals with disabilities or placed in areas with high housing demand, receive scoring preferences.
LIHTC projects must submit applications demonstrating project feasibility, financial viability, and alignment with state housing priorities.
Every year, the NHHFA gives new income and rent limits from federal HUD guidelines. These limits guide LIHTC properties to serve low-income people.
Income Limits set the most a tenant can earn based on area income, supporting low-income families. Rent Limits cap rents, keeping housing affordable and within reach for those with low incomes.
Developers and managers must follow these updated rules each year. This keeps housing affordable via the LIHTC program.
Developers are encouraged to work closely with the NHHFA throughout the application process to ensure all requirements are met and to strengthen their project’s competitiveness.
Compliance with LIHTC requirements is crucial throughout the initial 15-year compliance period in New Hampshire.
This includes meeting income and rent restrictions and maintaining habitability standards. The NHHFA performs regular inspections and requires annual reporting from property owners to verify adherence.
New Hampshire’s LIHTC Compliance Monitoring Manual outlines specific compliance obligations for owners.
These include tenant income verification, rent caps, property condition standards, keeping detailed records, and undergoing regular audits by the NHHFA to show ongoing compliance.
After 15 years, the properties begin another 15-year period. This period is called the extended use period. During this time, properties must still keep rents low. The Land Use Restriction Agreement (LURA) demands this.
The NHHFA gives advice and help. Properties should stay affordable. These homes must also meet LIHTC rules.
Other State and Local Funding and Support Programs in New Hampshire
New Hampshire does not have state LIHTC yet. However, it offers many other financing programs for developers to build affordable housing.
These include the HOME Investment Partnerships, Tax Exempt Bonds, Housing Trust Fund (HTF), and the Affordable Housing Fund (AHF). In addition, a community-based grant by the CDFA awards tax credits to build affordable housing.
This program offers extra money for affordable housing projects. It often combines with the 4% LIHTC to help projects be successful. Bonds assist larger projects, especially where high rents don’t attract investments.
Cities like Portsmouth have their own tax programs and support for affordable housing. Portsmouth’s Low-Income Housing Tax Credit Program provides specific help for local projects. This tailored approach works well in places with high costs.
This fund fills financial gaps for LIHTC projects, especially when federal money isn’t enough. It really helps projects stay viable in areas with fewer resources for affordable housing.
The New Hampshire LIHTC Program is a key tool for solving affordable housing issues in the state.
It keeps housing affordable for vulnerable people. Its focus on quality, sustainability, and community fit leads to big gains in social well-being.
As affordable housing needs increase, NHHFA and local groups need to collaborate to use LIHTC effectively, especially where support is lacking. This is critical for New Hampshire to deal with the housing crisis.
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