The Virginia Low-Income Housing Tax Credit (LIHTC) Program is essential to address the state’s affordable housing crisis.
Managed by the Virginia Housing Development Authority (VHDA), the LIHTC program leverages federal and state tax credits to incentivize private investment in developing or rehabilitating low-income housing in Virginia. The program provides financial support for creating and preserving affordable rental housing in the state and ensures long-term housing stability for low and moderate-income households.
The Virginia LIHTC Program fosters housing equity, economic development, and community revitalization from urban centers to rural regions.
How the Virginia LIHTC Program Works
The LIHTC Program works alongside the federal LIHTC to encourage affordable housing development in Virginia. Developers receive tax credits that reduce their tax liability in exchange for building or rehabilitating properties to provide subsidized housing in Virginia.
The goal of the LIHTC Program in Virginia is –
- To promote energy-efficient and sustainable housing developments across the state.
- Augment the federal LIHTC funding and further support developments like income-restricted apartments in Loudoun County and affordable apartments in Richmond.
- To ensure stability for residents and communities.
Tax Credit Options Available in Virginia
Virginia developers can access two main types of tax credits under the LIHTC program – 4% and 9% LIHTC.
9% LIHTC (Competitive)
- Awarded annually through a competitive process.
- Covers up to 70% of development costs for projects without federal subsidies.
- Supports high-impact projects in areas with severe housing shortages, such as low-income housing in Richmond and subsidized housing in Arlington.
4% LIHTC (Non-Competitive)
- Available year-round and paired with tax-exempt bonds.
- Funds up to 40-45% of total development costs.
- It is commonly used for large-scale projects like developing affordable apartments in Virginia and rehabilitating older properties.
State-Level LIHTC
Virginia offers additional state tax credits to supplement federal funding. These credits enable projects like income-restricted apartments in Loudoun County and subsidized housing in Roanoke to secure adequate financing.
By combining these credits, developers can deliver low-income housing Virginia-wide, including urban and rural communities.
Who Benefits from the Virginia LIHTC Program?
The Virginia LIHTC Program directly benefits several key populations, ensuring housing equity across the state:
- Low- and Moderate-Income Families: Access to affordable housing in Richmond, subsidized housing in Virginia, and other high-demand regions.
- Seniors: Dedicated LIHTC-funded projects provide accessible, age-friendly housing in cities like Arlington and Norfolk.
- Individuals with Disabilities: Developments include supportive housing features and services to ensure long-term accessibility.
- Rural Communities: Projects offering affordable apartments in Virginia and promoting economic stability benefit smaller cities and towns, such as Roanoke and Winchester.
These projects foster stable living environments, job access, and improved quality of life for underserved communities statewide.
Application Process for Virginia LIHTC
The Virginia Housing Development Authority (VHDA) manages the LIHTC program through a structured and competitive application process. Here are the key steps to follow –
Pre-Application Preparation
- Developers must submit a detailed proposal, including:
- Project location and design plans.
- Financial feasibility analysis.
- Site control and zoning approvals.
Scoring and Evaluation
- Applications are scored based on Virginia’s Qualified Allocation Plan (QAP), which prioritizes:
- Projects in high-need areas, such as low-income housing in Arlington.
- Developments near public transportation and essential services.
- Energy-efficient and sustainable construction.
Final Approval
Approved projects receive tax credit allocations to begin construction or rehabilitation.
This process ensures that credits are awarded to projects with the highest potential impact on housing affordability in Virginia.
Monitoring and Compliance
VHDA enforces strict LIHTC monitoring and compliance measures to ensure affordable housing projects meet state and federal standards:
- Affordability Enforcement: Properties must remain affordable for at least 30 years, with rent caps based on AMI.
- Tenant Eligibility Verification: Developers submit annual reports to verify tenant income and rent compliance.
- On-Site Inspections: Regular inspections confirm that properties, including subsidized housing in Roanoke and income-restricted apartments in Loudoun County, meet safety and quality standards.
- Penalties for Non-Compliance: Properties failing to meet requirements risk credit recapture or financial penalties.
- Training for Property Managers: VHDA offers resources to ensure proper management and adherence to LIHTC regulations.
These measures protect public investments and ensure long-term benefits for residents of low-income housing in Virginia.
The Impact of Virginia LIHTC on Communities
The Virginia LIHTC Program has significantly impacted communities statewide, transforming the housing landscape and supporting economic development:
- Developed over 123,000 units of low-income housing in Virginia.
- Generated over $8 billion in local and state tax revenue.
- Supported over 200,000 jobs in construction and property management.
- Richmond, Roanoke, and Loudoun County projects have revitalized aging neighborhoods and provided modern, safe housing.
- Investments expand access to affordable Virginia apartments in urban areas and smaller rural towns.
- LIHTC-funded projects offer stable, affordable homes, reduce housing insecurity, and foster healthier communities.
- Many projects incorporate energy-efficient designs, reducing environmental impact and lowering utility costs for residents.
Subscribe to Our Newsletter
Get the Latest in LIHTC Right Here!.
Cities in Virginia Benefits from LIHTC
The LIHTC Program in Virginia has made a measurable difference in cities and towns across the state. The program has a different impact on different cities. A few considerable ones are mentioned below –
- Richmond: Addressing urban housing shortages by implementing new low-income housing programs in Richmond to uplift and develop affordable housing communities.
- Arlington: Expanding affordable housing in Arlington to help low- and moderate-income families in a high-cost market. The aim is to provide them with safe, secure, affordable homes where they can grow and live happily.
- Loudoun County: The LIHTC program has provided income-restricted apartments to support local workers and families.
- Roanoke: Promoted economic stability through subsidized housing in Roanoke projects.
- Norfolk and Virginia Beach: Improved access to affordable rentals near employment hubs and public services throughout Norfolk and across major communities in the state.
Conclusion
The Virginia LIHTC Program is a vital resource for addressing the alarming housing affordability challenges across the state. By funding projects in cities like Richmond, Arlington, and Roanoke, the program ensures access to low-income housing in Virginia while fostering economic growth and community stability.
Through long-term affordability, sustainable development, and targeted investments, the LIHTC Program in Virginia continues to provide safe, high-quality homes for those who need them most.
