The Top Challenges in LIHTC Reporting—and Why It’s Time for a Better Approach

The Low-Income Housing Tax Credit (LIHTC) program has been a cornerstone of affordable housing development for nearly four decades. But while the benefits are clear, so are the administrative burdens—particularly when it comes to compliance and reporting.

 

For developers, syndicators, and investors, managing LIHTC reporting is not just about checking boxes; it’s about protecting tax credits, avoiding penalties, and ensuring the long-term viability of projects. Unfortunately, the process is often complex, time-consuming, and riddled with inefficiencies. 

 

Here are the top reporting challenges that LIHTC teams face today and why solving them is essential.  

Manual, Time-Intensive Workflows

Many LIHTC teams still rely heavily on spreadsheets, PDFs, and email chains to manage reporting. The lack of automation leads to labor-intensive processes, duplicated efforts, and a greater risk of human error. Instead of focusing on strategic asset management, staff find themselves buried in administrative tasks. 

 

Manual processes slow down the work and increase the chances of mistakes—often leading to costly compliance issues and missed deadlines. 

Fragmented Data Across Systems

Key data often lives in multiple, disconnected platforms—property management systems, financial tools, compliance software, and more. Without a centralized source of truth, generating accurate, timely reports becomes a logistical nightmare. The risk of confusion, especially during LIHTC audits or investor reviews, increases when data is scattered across systems. 

 

Fragmented data can also hinder performance tracking and make it challenging to monitor portfolio health efficiently. 

High Risk of Human Error

When data is entered manually or pulled from inconsistent sources, mistakes happen. A single incorrect income entry, rent calculation, or certification date can result in costly compliance issues—sometimes triggering Form 8823 filings with the IRS, which may put tax credits at risk. 

 

Reporting errors can trigger audits, fines, or a loss of investor trust, leading to significant operational and financial repercussions. 

Disorganized Document Management

Tenant Income Certifications (TICs), leases, utility allowance forms, and compliance reports must be carefully documented and stored. However, these documents are scattered across folders, desktops, and filing cabinets in many organizations, making audit preparation stressful and inefficient. 

 

Disorganized documents create confusion, leading to delays and increased risk of non-compliance. The lack of a centralized document storage system makes finding and sharing necessary files tedious, especially during high-pressure moments like audits. 

Inconsistent and Evolving State Requirements

Each State Housing Finance Agency (HFA) has its own reporting formats, schedules, and submission protocols. Staying compliant means keeping track of evolving requirements across multiple jurisdictions, which adds a layer of complexity—especially for teams managing multi-state portfolios.

 

This lack of standardization makes it difficult to ensure consistency and accuracy, leading to additional time spent figuring out state-specific requirements rather than managing the portfolio effectively. 

Reactive, Last-Minute Reporting

Without tools to track deadlines or monitor real-time compliance status, many teams constantly scramble to meet reporting obligations. Last-minute “fire drills” create stress, increase the chance of errors, and divert resources from more strategic activities. 

 

When the focus shifts to urgent reporting tasks, it takes away from time spent on proactively managing properties and addressing long-term goals. 

Limited Collaboration Across Stakeholders

Property managers, asset managers, compliance staff, and investors often operate in silos, using different tools or file versions. The lack of shared platforms or workflow visibility results in miscommunication, duplicated work, and missed follow-ups. 

 

This siloed approach can lead to inefficiencies, delays, and a lack of coordination between teams. When everyone works in isolation, the risk of errors and misaligned priorities increases. 

Lack of Portfolio-Level Oversight

Many teams struggle to monitor performance across their entire portfolio. Without standardized reporting and real-time dashboards, it’s difficult to identify underperforming assets, spot trends, or provide investors with clear, actionable insights. 

 

Without a comprehensive, unified view of portfolio performance, asset managers can miss opportunities to optimize financial outcomes or address compliance issues before they become significant problems. 

 

So, How Can LIHTC Developers, Syndicators, and Investors Employ a New, Better Approach to Reporting? 

The answer lies in employing new technologies to solve these challenges. By centralizing data and automating key workflows, organizations can eliminate data silos, streamline reporting processes, and improve collaboration. 

 

Fusion is the solution. As a purpose-built LIHTC-specific software platform, Fusion streamlines the entire management lifecycle—from acquisition analysis and construction tracking to tax credit compliance auditing, credit allocation, lease-up, and post-construction performance reporting. The user-intuitive platform ensures consistent data input, LIHTC-centric templated reporting, and dashboards that deliver transparency, accuracy, and insights. 

 

Fusion is designed to address the unique challenges of LIHTC reporting and compliance. By centralizing data from across systems and automating key workflows, Fusion eliminates the manual processes and fragmented tools that often lead to errors, delays, and audit risks. Its intuitive interface supports standardized reporting, real-time dashboards, and proactive alerts—giving teams a clear, up-to-date view of compliance status across every asset. 

 

With secure document storage, seamless data ingestion, and collaborative workflows, Fusion empowers developers, syndicators, and investors to streamline operations, reduce overhead, and focus on strategic portfolio management rather than administrative bottlenecks.